Once again, I have been circulating around the NASSCOM show, and have met a wide variety of spokespeople from the public and private sector, and from suppliers and client-side companies alike.
As I mentioned in my blog from yesterday, the overall mood seems optimistic, albeit a cautious optimism. Having met Sudip Banjeree, the CEO of L&T Infotech, a global IT services and solutions provider, I now understand more. He told me that prior to the recession, the industry was somewhat relaxed as profits were readily available and the services front was building revenue. However, as a result of the recession, the industry is far tighter. There is, and will continue to be, a greater emphasis on long term benefits (both internally and in terms of their delivery to clients), reduced discretionary expenses and a focus on adapting capabilities. The second shift that Banjeree has seen is in the distribution of business – there used to be, before the recession, a strong emphasis on the US, UK and Western and Eastern Europe. The future growth that Banjeree predicts will have to be directed at other markets as companies search for lucrative and cost-effective opportunities.
Sachin Tikekar, Chief of People Operations at KPIT Cummins, a global IT consulting organisation, added that the recession will cause business models to change substantially. This will not necessarily include product-built solutions from service companies per se, but templatised solutions that allow service providers to cut time to market while at the same time providing value to customers.
I was also lucky enough to grab a few moments with John Suffolk, the CIO of the UK Government. He told me that India was still a “hotbed of innovation” and that the conference was especially important to the UK given the sheer number of Indian suppliers involved directly with UK companies and the need to encourage this to continue.
Commenting on the imminent election, Suffolk added that IT is absolutely a core method to drive efficiencies in any organisation and the UK public sector is no different. It was also reassuring to hear that while the UK is in the top two or three European countries for IT availability and sophistication, there are still ambitious plans afoot to improve despite the economic situation, primarily via innovation and driving efficiency.
Talking of innovation, Tikekar mentioned that there is almost an expectation of this in the sourcing community, both from the maintenance perspective, and proactive expectations. However, innovation, according to Tikekar, should not be pursued if it involves too much risk. For instance, cloud computing may be a prime way to show innovative approaches, but a premature jump into it without the necessary infrastructure changes could be disastrous.
All in all, a very interesting day, and with presentations that proclaimed predictions of double digit growth in 2011, an increase in the number of mergers and acquisitions and an emphasis this decade on infrastructure and systems integration as opposed to BPO and software maintenance, it doesn’t look like the sourcing industry will be getting any less interesting any time soon.
