Anand Krishna’s musings

For the last few months, the Indian IT services industry has fretted and worried about the slowdown in the US economy and its impact on business. It has reacted on expected lines:

• predicting a slower growth in top and bottom lines
• going easy on hiring
• limiting salary hikes
• reducing bench strength and increasing utilization
• cutting down on discretionary spends

These are well and good; but what is needed is to use this time to change the rules of the game. Different (and differentiated) business strategies are needed. Companies should explore new models to break the linear relationship between revenues and number of bilable employees. “Build once, use many times” could be one possible approach, wherein a cmpany develops an application “platform” that can be sued for multiple clients. Naturally, adequate security measures will need to be in place, and more importantly, disparate clients must be convinced to standardize processes and not worry about ownership of IT assets so long as business service levels are met.

This may be a good time to target Africa both as a potential market as well as a location for a development center.

Rather than cut back on marketing, this is a good time to pick up desirable media slots at a relatively lower price and lock them down for the next two years or so. That way, 6 or 9 months from now, when the miasma in the marketplace is going, companies will be ready to hit the ground really hard.

This may also be a good time to look inwards and rationalize teams.

Rather than indulge in infructuous navel-gazing, this is the time for Indian IT services companies to differentiate themselves . At a time when clients are woried about costs, Indian companies should start taking the lead in demonstrating value that goes beyond being “body shops”.