Thursday December 25, 02:44 AM

Source: Indian Express Finance

The show will go on

By Ganesh Natarajan
Noted economist Keynes had suggested many decades ago that in times of economic slowdown, the recession of sentiment could be more damaging to the psyche and fortunes of a nation than the actual threat of any recession itself. At a time when the Indian economy is still chugging along, albeit at a reduced pace, inflation is reducing to the magic numbers of a bygone era and the Indian IT industry still retains the confidence to grow at a decent clip when it reports its annual numbers in mid-2009, the soothsayers of doom and gloom continue to clutch at every negative signal to renew their noises about an impending disaster. The recent announcement and retraction made by one IT major after the concerns expressed by shareholders were heard by the promoters and management should have remained just that an intention proclaimed by one firm with a subsequent change of mind and direction. However, the furore that refused to subside in the press would have the layman believe that the sentiment and indeed the comments on the immediate IT-demand environment were more reliable forecasts of impending disaster than all the chieftains of the Indian IT and BPO industry had been able to make in the last many months. Nothing could be further from the truth the demand environment is indeed getting tougher and all companies in this industry have done well to tighten their belts and take steps to protect their profits as growth slows in the next two or three quarters but the industry has enough going for it to ensure that happy times continue. Professor CK Prahlad rightly argued in a recent conference that a crisis is too good an opportunity to miss while the demand environment remains sluggish, an opportunity to revisit our basic value proposition and launch a slew of new products and services is very much there. As Anduela Kola, a young Albanian turned American citizen who runs Zensar s East Coast Enterprise Telesales told me in an email: We now have to tell our customers and prospects how to save money, not where to spend money. In every aspect of the industry, whether it is providing low cost document management and learning solutions, new software as a service solutions, merchandise planning and allocation services in BPO or impact sourcing technology solutions that give a return on investment in three to four months, strategic and tactical ingenuity is already at work in every significant firm to keep the revenue engines firing. And its not just the biggies with caution being the watchword in all hiring decisions, collaboration with larger players in areas of niche competence could present a never before opportunity for emerging companies to build a client base and demonstrate their skills to partners and customers alike. There is no doubt that we are entering a challenging phase. Battered clients will ask for rate reductions and more for less in every sense of the term. Opportunistic competitors both within and outside the country will try to eat our lunch by dangling carrots that might entice unsuspecting value seeking clients away from stable partners. But these are challenges we have faced before. The best approach is always to raise the bar by providing better value. As purchasing departments increase the pressure on costs, superior solutions in a range of areas security, hosted solutions and even in recession proof industries like media and entertainment could retain the fizz in the industry even as more traditional services take the back seat for some time. The government could do its bit to support the industry in difficult times by extending the STPI scheme to make it feasible for emerging companies to compete with SEZ based larger incumbents and by providing additional stimulus for domestic demand and investments in e-government solutions all over the country. Nasscom s own annual leadership summit in Mumbai in February will reaffirm the confidence that the industry holds for the future and indeed the faith that our global clients have in our ability to innovate and keep the flag flying high. The author is chairman of Nasscom and vice-chairman and MD of Zensar Technologies