I am summarizing feedback I received from last week's Nasscom Leadership Conference in Mumbai which I had planned to attend but could not. The feedback is from several buyer executives (who prefer to not be named); Malcolm Frank, SVP of Marketing and Strategy at Cognizant; Harish Jagtiani, President of Intermark, which represents Ovum, Dow Jones and other research/media firms in India and from published notes from Ed Caso, Senior Analyst covering IT Services at Wachovia Bank and Bruce Richardson, Chief Research Officer at AMR Research.
a) Offshore world "not coming to an end"
Was Ed's assessment - he found the mood much more positive
than he expected given
the state of the US economy and the dollar weakness impact on rates. Harish reports most Indian vendors are increasing
their marketing staff and "large deal teams" to chase bigger
opportunities. There is life beyond the US market. There were
several British buyer organizations at the conference. Malcolm reports the German finance sector in particular is bright. The Indian market, long
ignored by most of the offshore providers, is starting to be attractive
in particular in pharma, auto and finance. China and rest of Asia are
growing markets. The Middle East, flush with the rise in oil prices, is
a significant opportunity. Egypt's trade reps were visible at the conference
and several Indian firms are looking at partnerships to use their
Arabic skills in that market.
b) "Hangover from the party"
Much more sober mood after the go-go years earlier in decade ,
said Malcolm who is a regular at the conference. Bruce summarized "while we were happy to escape from New England
winter, we couldn't help feeling that maybe we brought some of the
Arctic air with us..."
c) Big Western firms - "the elephant in the room"
While IBM and Accenture report their largest labor pools are now in India, they and other western firms like EDS (with a major presence in India with its MphasiS acquisition) and Cap Gemini (with its Kanbay acquisition) were not as well represented at the conference. One possible explanation - Nasscom continues to be an "old boy" network and the early founders of Indian firms still get the best speaking slots. But as Malcolm points out the "progress Accenture and IBM have made in just last couple of years, has everyone's attention".
d) Supply side concerns persist
Buyer input - Indian firms still are not taking the staff turnover and wage inflation issues seriously enough. The strategy of hiring from secondary and tertiary cities is not making much of impact - at least not in high quality resources. As I have written before, the strategy of hiring mostly out of engineering schools and training them takes too long to produce truly productive resources, especially with vertical or process knowledge. More buyers want diversification beyond India. They would prefer to go through an existing Indian or Western firm, rather than find a new offshore player in China or E. Europe. Another complained the customer account management layer in Indian firms continues to be poor and another talent area which needs focus.
e) Lots of Innovation talk, but not much to show yet
Buzzword at the conference, but little real progress. One speaker at the conference exhorted the industry to start thinking of products, not just services - like the new Tata Nano. A buyer wanted more presence around emerging technologies. The majority of Indian firms do better as markets mature around more defined software segments from ERP to SOA. Another buyer said very few non-Indians are moving to India on tours of duty. Till that happens, India will struggle to truly create "innovative" offerings. Harish points out that Som Mittal is taking over as Nasscom President - the first senior IT executive to run that job. He ran HP's development centers in India and may bring a broader infrastructure and non-software focus to the industry.
Thanks to all my "analysts" who contributed to this post. As I mentioned last week, if Indian firms can deliver from a distance, we can similarly analyze them from a distance, sans jet lag -)
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