My day started with a flurry of sms saying that the CEOs of Wipro, Suresh Vaswani and Girish Paranjpe had resigned, and that T K Kurien was the new CEO of the IT business. As a former Wiproite I was, of course, interested. But having had time to think, I realize that this is just one of the many big changes we are likely to see this year.
Focused strategy: In the past, IT industry has been large supply-driven. There was a lot of demand and those who were able to keep the delivery engine going were the winners. This system generally emphasized ability to hire and deliver over sales, marketing and company strategy. However, in an industry with increased competition, that is likely to change and winners are those who have a razor-sharp focus rather than pursuing all business. HCL and Cognizant have pursued a tight strategic focus - HCL on service lines and Cognizant on industry verticals - and this has paid off for them.
2011: Watch for more firms to tighten their strategies and get more focused. Bottom-up, consensus-driven business plans will give way to top-down decisive strategies
Consultative Approach: Cognizant entering the top 3 and Patni-iGATE combo providing another $1 billion firm will provide more viable options for clients. This is likely to lead to pricing pressure on the incumbent providers. The only two routes to avoid this are (a) non-linear, more automated delivery and (b) consultative solutions
2011: Watch for investments in non-linear platforms and greater focus on consulting.
Sales & Marketing: As we move from a supply-driven phase to one that is more demand driven in an era of consolidation, brand differentiation and brand premium matter much more. In addition, as the market gets tougher, there will be greater emphasis on managing the offerings portfolio and understanding technology trends - a great opportunity for marketing to play a more strategic role.
2011: Expect the enlightened few to start investing in a strong brand. The front-runners will break away for the tag of “Indian IT” and be seen as global players like IBM and Accenture
Outlook:
2011 is going to be an exciting year for the Indian IT industry. It is probably going to be a good year for clients as they will see more choice and hunger than in the recent past. For employees with high market value there will be a lot of emphasis on retention, while at the same time margin pressures will imply lower pay-hikes for those with commodity skills. Firms like Wipro foster an entrepreneurial spirit within the organization, and in boom years like 2011, you can expect more of the employees to embrace it and leave to start their own ventures. As I said in my last post, it feels like 1999 again!
And as for the former CEOs, they are both great individuals and I wish them all the best. My past interactions with T K Kurien lead me to believe that he will bring a lot of zing into his new role.
About the Author: Jessie Paul is the Managing Director of Paul Writer a marketing advisory firm founded in January 2010. She was formerly the CMO of Wipro's IT business and has played key roles in marketing at Infosys and iGATE Global.
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