Markets around the world are so much interconnected that, it is really hard for any body to escape the storm. Talking to some friends in Indian finance industry, i understand that the industry is preparing for the worst and hoping for the best. The tension is all gone. Every body is in "come what may" attitude. There is an unusual calm in the Indian IT industry. Though the senior managements some times come out and speak alleviating words, They also very well know and very cautiously waiting for the storm to come. Govt. is trying all possible ways to reduce the ill-affects of the coming storm. This is really the feeling, a feeling of sinking, but not yet sunk. Feeling of failure, but not yet failed. Expecting the worse with watchful eyes....of man that's triggering my poetic subconscious!
Reducing the bank rates or repo rates are definitely not helping the situation, but is increasing the sense of insecurity, gives the feeling of the storm coming nearer and echo can be heard more louder! I hear from my business development friends about the difficulties in getting new businesses. Every one has the one answer "recession and nobody is giving business!" Especially those in the IT outsourcing industry. US has been traditionally the biggest market for outsourcing industry in India and thats why the industry is thinking of ways to interpret Obama's words, which might give them some hope of continued revenues. But they have to face the fact, that their sales folks are ultimately going to blame the recession for not achieving targets! How much can the senior management push! How many heads can roll? End of the day every body works for shareholders and thats is the truth and that is the bigger picture! and is the foundation of the whole business system.
As the whole world tries to alleviate the effects of this storm, I strongly feel, the focus should not be on the short term targets, but on the long term. What we need is the innovations in business models and not in the product pricing. Especially the Indian IT industry should be focusing on building relationships and helping the customers weather the storm. Everybody is sure, that the revenues are going to get hit. Then why should we focus on targets and shareholder value for short term. Share holders definitely wont be interested in killing the ducks which is seen to lay gold eggs. This year you may survive, what about next. and what about next to next. We should accept the fact that this is not just alow point in the economy curve, but a reset. Whether you get revenue are not, this is the time to focus highly on holding your customers. Sales folks is known to keep the contacts floating, but corporate wide movement to keep the focus on engaging customers, should be the priority of the time. Whether it be internal IP development or cost cutting initiatives, go out the help the customer. Help them to position your IPs strategically. yes I mean that Your IPs. Help them enter New markets proactively. This is a great opportunity to build stronger ties with these companies and the industry. This is not the time to move up your value chain creating competitors out of customers, this is the time to bring more value to the value chain and there by building relationships through out the value chain, which will definitely help in your company vision. This is not the time to expedite your company goals, but to defer your thoughts on that. I would caution and say this is not the opportunity to splash your reserve to enter a new territory. Save every penny, innovate around business models to bring most value to you customer in his time of need. T&M and Fixed bids are not the only options. Try to think beyond those. "Defer", "IP Lending" etc are some of the keywords, you can think of...Better luck!
