IT players must aim to thrive, not just survive'

An interesting news item suggesting that IT players must aim to thrive, not just survive. Regards.

- Dilip.

Source: The Hindu, Feb 17, 2006.

IT players must aim to thrive, not just survive'

Anand Parthasarathy

Hybrid of product and service company mooted at Nasscom summit

MUMBAI: Just in case the upbeat numbers in National Association of Software and Service Companies' (Nasscom) strategy review for 2006 lulled the Indian information technology industry into a sense of complacency, Day Two of the Leadership Summit began with a sharp wake-up call from Michael A. Cusumano, Distinguished Professor at the Massachusetts Institute of Technology's Sloan School of Management.

Players in the services and maintenance sector here, who have hitherto had the field pretty much to themselves, would soon face challenges from U.S., Europe and Japan-based product companies who were seeing their market shrink — and were reinventing themselves to bite into the services pie, Prof. Cusumano warned. The sensible way forward for Indian business process outsourcing (BPO) and IT-enabled services (ITeS) players, he suggested, was to go `hybrid': to attempt a canny mix of pure services and innovative product offerings within the same space.

"The problem is, for an outsider, all Indian players seem to look alike. The challenge is to differentiate yourself," he added, "that way, one can thrive, not just survive".

Prof. Cusumano is the author of an authoritative study on the subject: "The Business of Software" which traces the inevitable shrinking of profitability for yesterday's iconic product companies from IBM and PeopleSoft to SAP and Siebel — and their canny sideways shuffle to enlarge their service offerings.

In his keynote, Wipro Chairman, Azim Premji, said innovation needed to be 'institutionalised' if Indian IT players were to remain market leaders. He saw " constant complacency" in the higher echelons of many companies and suggested that new ideas would provide the "escape velocity" to overcome the "gravitational force" of such laid back attitudes.

NIIT's `Third Wave'

In a seeming response to the challenge posed by Prof Cusumano, NIIT Technologies announced on Thursday, that it was beefing up its offerings in managed services and promoting this as a separate niche. The company was already providing remote managed services through state-of-the-art $2 million facility in Thailand, the first in the ASEAN region to be assessed for the stringent BS 15000 standard in IT services and management.

Now it was creating similar capability in Mumbai and Delhi, at a cost of $2.5 million, CEO, Arvind Thakur, said. The company saw this as its Third Wave after application development and business process outsourcing.