The move of the New Jersey State to stop  its vendors by law importing BPO services from foreign companies should set the Indian IT companies thinking about their future business strategies.

If a developed economy like US is concerned about the employment loss and resorts to regulatory methods to protect its economy, should the Indian Government not be more  concerned? Is it not necessary to think what the Indian Government and the IT industry can do to secure the long term interests of the Indian IT industry?.

In the light of these developments, it is time to debate some of the strategies that Indian regulators and Indian IT Companies should adopt to protect the growth of IT industry in India.

Leaving the regulatory aspects to a future article, we can focus on some of the initiatives that the Indian IT Companies should contemplate to ensure their continued success in the coming days.

As a first step in this direction,  it is necessary for Indian IT Companies to start devoting more attention on their marketing strategies. At present all IT Companies tend to focus on "Projects on Contract Basis". Many of these contracts are for low skill, high volume jobs similar to Y2K projects.

Many IT Companies feel more pride in setting up development centers abroad which only replicate what their Indian offsite centers can do more effectively, than setting up "Product Marketing Cells" either in India or abroad.

Data Processing jobs and Migration work fill the financial balance sheets of companies in the short run but have very little long term benefit for the Company. Such jobs neither  create any reusable information assets nor even skills. They may only  build up the IPR of their principal clients.  

There is therefore an urgent need for Indian IT companies to switch attention to "Branded Product Development". It is only when Indian Companies build products on which they have the IPR and build a brand around it that the future of the Indian IT industry will be secured.

It is true that "Brand Building" and  development of IPR backed products requiring "Research" and "Original Thinking" has a cost. It is possible that small  companies with limited resources may find it difficult to pursue the policy of "Products" as against the easy option of "Projects". But larger companies who have already established some reputation in the market place have no reason to fight shy of the responsibility of building own  brands.

However, transforming a Company's marketing strategy from "Project Orientation" to "Product Orientation"  is not an easy task. It requires both an employee reorientation as well as some "Organizational Changes".  These have HR implications as well to the HR sensitive industry which IT industry is.

While a detailed analysis of this "Transformation Strategy" is out of the scope of this article, certain salient features of the strategy can be highlighted for immediate attention.

1. Accountability for Identifying  Product opportunities.

In order to systemize the process of developing "New Product Ideas", the  IT Company needs to assign duties of "Market Analysis"  to a specific department. Some Companies seem to create a  post of a "Business Analyst" for the purpose for different SBUs. This could be a good starting point but a better option would be a "Cross SBU Marketing Team" which can look at the synergies that can be used between different business segments.

A senior marketing person who looks not only at the market opportunities from the perspective of "Product Planning" but also from the point of view of balancing the Client portfolio with "Country Risk", " Industry Risk" etc and also tries to even out the project implementation bottle necks arising out of bad planning would add a lot of value to the organization.

2. Accountability for Identifying IPR Opportunities:

In order to spot opportunities of IPR arising out of the normal business processes and special research projects, a senior person with necessary understanding of the patent process should be available to keep a watch on the developments within the Company.  Some times there will be opportunities to offer certain project functionalities in the form of "Reusable Components" on which the IT Company can claim IPR rather than passing it on to the project client by default.

There will however be certain sensitive issues involved in this process which have to be handled properly  if the IPR strategy should not be mis understood by the "Project Clients".

It would be interesting to know the extent to which Indian IT Companies are using the above strategies.  Any comments are welcome. 

Naavi

March 15,2003

Related Article:

India Inc. fights to contain the global BPO backlash
 

 

---

---

Send Your Views if any to Naavi

.