Indian Global IT suppliers on domestic IT challenge

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Indian Global IT suppliers on domestic IT challenge

Karl Flinders

India has some of the world's largest IT service providers with customer lists that resemble a Who's Who of global multinationals, but on their home turf they have to take a different approach to supporting customers.

Senior executives at two of India's global IT service providers talk about the IT opportunities Indian businesses are taking on as well as the challenges they face. CN Raghupathy, head of Indian operations at IT giant Infosys, and Salil Godika, who is co-founder of newcomer Happiest Minds Technologies, both talked about the need for

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Indian businesses to leapfrog their Western counterparts in IT adoption.

Social, mobile and cloud growing

Raghupathy said this decade will define the future of emerging economies like India: "By 2020 the non OECD [Organisation for Economic Co-operation and Development] countries will take over the OECD countries in terms of GDP. In 2030 non-OECD countries will account for two-thirds of global GDP."

This growth is putting pressure on Indian businesses to prepare to take advantage of the sales opportunities that follow.

Raghupathy said that businesses in countries like India do not have the long experience of using computers that the companies in the West have. He said because of this, Indian organizations go directly to the latest technologies in many cases.

"Indian organizations are leapfrogging the Western businesses in the use of IT because they are coming to it late," he said.

This means the adoption of technologies such as social, mobility and cloud takes up most the time of Indian CIOs. These technologies are getting into the mainstream quicker in India because increasing consumer demand is driving investment, whereas cost cutting and customer retention are reasons businesses in the West are spending on IT as demand stagnates.

Indian IT services adding domestic focus

Godika at Happiest Minds said this leapfrogging is reminiscent of India's move to the mobile phone. "Indian people went straight to mobile and not landlines. The same thing is happening with technology."

He said Happiest Minds, a small supplier with 750 staff, has about one-third of its customer base in India, with most of the remainder in the U.S. and U.K. The company's focus is on the social, cloud, mobile and analytics emerging technologies.

"Businesses are just jumping on the latest technologies, particularly those that are focused on the customer, such as mobile and social media," Godika said.

Due to accelerating demand being spurred by economic growth IT services firms that are based in India, but typically focused on overseas customers, are refocusing efforts on the domestic market.

"It used to be the case that Indian companies were ignored. But everyone has India on the radar now,"Godika said. For example Nasscom research found that sales within India for its IT services members will grow at between 13% and 15% to reach Rs 1.18 to Rs 1.20 lakh crore. This compares to an expected growth rate of between 12% and 14% for exports, mainly to Europe and the U.S. Exports will be worth up to $87 billion.

Issues with implementing new technology

But there are challenges facing IT leaders in India. Godika said from what Happiest Minds has experienced in the Indian market, there is a common theme in that "customers do not have time to roll out a system over a 12-month period. Business is driving so fast they do not have time." As a result they are adopting technologies such as the cloud, which can be quickly put into use.

Infosys' Raghupathy said that the systems integrators in India will play an important role to ensure Indian organizations can prepare for the future, by helping them build in-house IT teams to support the business.

He said a lack of skills and experience could hold business IT back unless system integrators pass on their global experiences. "There is a substantial difference between the U.K. and India." He said businesses in the U.K. and other developed nations have the experience of years of using computers and as such can break down business and IT problems and identify individual solutions. "In India the process short circuits," he said. "Businesses in India cannot define the problem and end up buying a total solution from a service provider."

He said system integrators should operate the systems for a few years and then when the customer has built up experience hand it back. "We have a contract to run the income tax systems for the Indian government. When the five-year term is up we will hand the entire system back to the government unless it wants to continue."

The shortage of experience is typical in the SME sector, where businesses face huge challenges finding skilled staff. Indian IT professionals are often attracted to work in the huge IT services sector or get involved in some of the large public sector projects taking place, such as the ID card scheme.