I am writing this blog as many of Indian IT companies finalizes its strategy for the FY ahead. Of course, many reports will tell you from one extreme with dooms day view of how economy is tough/ market is dull to other extreme with rosy picture that Digital transformation will open new doors of opportunity for you. Both extremes are only partly right, and hence totally wrong to consider as basis for strategy.
As we spoke to 400+ clients in last two months and discussed with/attended annual planning/strategy sessions with many of your global as well as Indian peers, I felt that many firms are reluctant to accept structural changes. This industry is going through and are shying away from taking drastic steps required to survive long term seismic shifts – even if these changes mean disruption and temporary business challenges:
- Be Ready for one more year of muted growth & know well that Digital hype won’t deliver much
- While select verticals in US shows recovery, verticals like Energy, Telecom shadow overall numbers.
- Europe will continue to be a problem. In addition to economy, geo-political and terrorism spoil European spend.
- Hype of Digital and IOT will yield only smaller projects.
What it means?
- Prepare for industry growth of 6% – 8%.
- Margin pressures continue to mount.
- Focus lot more on analytics.
- Re-jig Dely Org to suit millions of small projects
- Scale of technology acquisition reducing.
- On one side deal sizes are dropping and on other hand all projects driven by new technology and functionality plug-ins are of smaller size.
- New Dev Ops tools and platforms needs less people to do same task compared to five years ago.
What it Mean?
- ODC and large/broad pyramid centric models are over.
- Embrace Manufacturing best practices to run efficient project factory, not mere software engineering and accolades like CMMi.
- Need to re-skill about 60% of resources and reduce hiring coders and testers
- In rising world of Automation as well as Analytics, Clients need more help in deploying technologies interpreting insights.
- Having detailed /minute domain capability and experience and operating skills will be in demand.
What it means:
- Organizations of Coders and testers need to augment with Users and installers (configuration/deploying etc).
- Recruit non-engineers, end users from client side, and data scientists/experts more.
- Get to account level – research, strategy, solutions and message
- Current micro-vertical based strategy will not succeed. Horizontal services (like Digital, SMAC, and IOT) will fall even shorter than that. Actually these are not tech practices.
- No two companies – even in same industry and geo – are facing same issues. Your one size fits all message won’t work.
What it means?
- Start micro-strategy. Identify top accounts that will give over 60% revenue and work at account level (not by sales leaders, but at company level).
- Your message need to be account specific and research based.
- Update current outdated Strategy, Marketing and Sales Support
- Every second Nasscom member has same story…. And still they believe they have differentiation.
- Currently, these functions are mere plan facilitators, campaign managers, event planners, hosts for visiting clients /analysts, and collateral content creators.
What it Mean?
- These functions need to provide account level actionable insights, talking points and help to create client conversation.
- Strategy need to identify solution hot buttons that field and account teams can use to improve pipeline quality and deal strike rate.