A recent article in The Times of India by Mr Mohandas Pai (Chairman of Aarin Capital Partners & Manipal Universal Learning & former director and head of Human Resources at Infosys Ltd) about shrinking profitability of Indian IT companies and an option of going up in the value chain triggers an alarming bell for the industry. Among Indian IT companies, Infosys enjoys highest per employee net profitability i.e. US $ 11400 per employee and stands at second position (IBM enjoys highest per employee net profitability i.e. US $ 36586). But the current situation definitely invites proactive call-for-action if the desire is to incessantly enjoy the similar growth & profitability.
In India, IT industry is considered as one of the most aspirational industry amongst youngsters for career option. However, companies in USA, UK and Europe those who are outsourcing Technology implementation jobs to India, ponders it as a hub of talented manpower at low cost. I’m not refuting the fact that Indian IT companies journeyed a long way in the last two decades to emerge as technology partners from low cost IT vendor. But the perception has still not changed in the source countries. Global IT & Consulting companies like Accenture have already established full-fledged development centres in India and are in the league to execute technology implementation jobs from here. This surely upsurges the problem for Indian IT companies to revisit their business strategy, because Accenture’s strong positioning of business consultant gives them an edge vis-à-vis Indian IT companies. They have the bandwidth, expertise and proven legacy of taking up high level consulting & technology projects and now with Indian offshore office it brings low cost implementation capability and strengths as well.
So what it means when Mr Pai says “Going up in the value chain”?
What I derive from this statement is that Indian IT companies should elevate their brand perception to get into the territory of ‘CEOs’ i.e. become "Strategic partner for business growth". They should continue maintaining the relationship with the CIOs, but the brand perception and recommendation should flow from top-to-bottom and not vice-versa. It is obvious that elevation towards the customers’ business solution will provide an edge to Indian IT companies. In fact it’ll be a value addition for better image and better earning. The technology implementation jobs will continue to follow once Indian IT companies are comfortable in CEOs territory. It’ll also enable clients to be highly dependable on these companies and look at them as single stop solution and sole advisory partner for business growth through business consulting and technology implementation.
If this is the objective then the task for Indian IT companies become little challenging. They need to work hard to bring in-depth understanding of client’s industry, business growth drivers, challenges and anticipate the future trends which would help the customers to think and act ahead of time. Indian IT companies need to invest in highly talented and diverse human capital, build the global team from diverse culture & multiple ethnicities which can bring large years of industry’s strategic & operational experience and can collaborate with the technology expertise to develop industry specific and customised solutions for the clients’ business growth. They need to share and implement best practices across the globe to create global image with local implementation capabilities.
What role Branding has to play here? Brand custodians will have a challenging job to position the brand on a “Thought Leadership” platform. They have to create a marketing story on the global experience and industry expertise. They need to align the brand with the culture and professional context of every country, wherever the brand has presence. They need to develop strategic communication plan that is coherent, contemporary, culturally aligned along with industry specific insights and business cues. Accenture has mastered the communication in this sector. Their brand positioning “High Performance. Delivered” is manifested not only in the communication (Refer Image) but at each & every touch point of the brand.
Indian IT companies must wake-up to the situation, if not already. They have grown excellently in the demand led market, now it’s the time to create a strong business delivery expertise and brand excellence “To cruise in the Higher Orbit”
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