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Marketing IT amid Global Crisis - An strategic perspective

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Marketing IT amid Global Crisis - An strategic perspective

  1. 1. Ravi Shankar @ Marketing IT amid Global Crisis An strategic perspective.
  2. 2. Talk of the hour……... Business Overview Market Scenario Global Outlook Internal IT Market Scenario Conclusion & Focus SIBIN it Group’s other Current status Future strategy Business Interest @
  3. 3. Global Financial Situation – An outlook
  4. 4. Global Macro Economic Situation 0.9
  5. 5. Some key facts about US economy <ul><li>Sharpest Fall in 7 yrs </li></ul><ul><li>With Financial turmoil this could mean potentially lengthy US recession </li></ul><ul><li>Consumer Spending which fuels 2/3 rd of US economy, fell at a 3.1 %, </li></ul><ul><li>First cut in quarterly spending since the closing quarter of 1991. </li></ul><ul><li>Spending on non durable goods e.g. food paper products – dropped at </li></ul><ul><li>the sharpest rate since 1950. </li></ul><ul><li>The GDP number does not reveal the weakness because of the impact </li></ul><ul><li>of international trade, which shows how weak the economy is. </li></ul><ul><li>Continued job losses coupled with declined in value of stocks. </li></ul><ul><li>Sub prime crisis with other investments have put consumers under sever </li></ul><ul><li>stress. </li></ul><ul><li>Disposable personal income dropped at an 8.7 % rate in the 3 rd quarter, </li></ul><ul><li>steepest since 1947. </li></ul>
  6. 6. Indian Macro Economic Situation Growth Vision The GDP Forecasts FY 2009 FY 2010 RBI 7.5 % NA NCAER 7.6 % NA Morgan Stanley 6.4 % NA Goldman Sachs 7.5 % 7.0 % Citigroup 7.2 % Best Case 7.4 % Worst Case 5.8 % Base Case 6.6 %
  7. 7. <ul><li>Erosion of margin due to high interest cost. </li></ul><ul><li>Tepid growth in gross capital formation, it can plummet to 2 % from 13.7 % in the year ended March 2008. </li></ul><ul><li>Sub-7 GDP growth in 2009-10 would arise from intensification of financial stress and global recessionary condition. </li></ul><ul><li>Intensified financial stress and risk aversion has resulted in tight liquidity condition </li></ul>Key Facts about Indian economy
  8. 8. <ul><li>Intensified financial stress and risk aversion has resulted in tight liquidity condition </li></ul><ul><li>Recessionary conditions in US and European market will result in moderation in growth from more than 24 % in the recent past to 19 % in 2009-10. </li></ul><ul><li>Export grew at its slowest pace in last 18 months as a weakening global economy damped demand for the nation’s products. </li></ul>Key Facts about Indian economy
  9. 9. <ul><li>$1 trillion economy </li></ul><ul><li>One the economies driven by domestic consumption and investment rather than completely on exports. </li></ul><ul><li>Crude and other commodities raced towards their peak in the first half of 2008 which indirectly resulted in stock prices tumbling as input become costlier. </li></ul>Is Indian economy still robust???
  10. 10. <ul><li>Rise in saving and investment by 10 % in last 5 yrs, which has been sustained through productivity improvement s and rising inflow of FDI. </li></ul><ul><li>From being and agrarian economy, growth currently is a result of the economic cycle upturn, urban/ services-led consumption, outsourcing and the trickle down effect. </li></ul><ul><li>Structural India story still in place (Pull factor for FDI) </li></ul>Is Indian economy still robust???
  11. 11. <ul><li>Indian exports about 85 % of its oil requirement and hence the drop in prices augurs well for the trade and current account deficits. </li></ul>Is Indian economy still robust???
  12. 12. Global IT Spending and Investment Forecast 175,700 153,500 113,725
  13. 13. <ul><li>Just under half - 43 %, - of western companies are cutting back their IT spending </li></ul><ul><li>Nearly 30 % are scrutinizing IT projects for better returns </li></ul><ul><li>IT spending for 2008 in China, Russia and India is surging forward at 18 % growth far ahead of the 5.2 % increase globally </li></ul>Global IT Spending and Investment Forecast
  14. 14. Global IT Spending Patterns <ul><li>Overall levels of spending in the West in 2008 are predicted to remain far higher than emerging market overall. </li></ul>
  15. 15. SOFTWARE EXPORTS – GLOBAL REACH F.Y. 2006-07 F.Y. 2007-08
  16. 16. SOFTWARE EXPORTS – SEGMENT WISE
  17. 17. Overall corporations spend by Industry Verticals Chemicals: 2000: 3.09% 2001: 3.51% 2002: 2.68% Construction & engineering: 2000: 1.55% 2001: 2.03% 2002: 1.43% Consumer products: 2000: 3.52% 2001: 4.33% 2002: 3.64% Electronics: 2000: 3.14% 2001: 3.20% 2002: 2.95% Energy: 2000: 2.56% 2001: 4.71% 2002: 2.2% Financial: 2000: 6.76% 2001: 6.09% 2002: 6.64% Food/beverage processing: 2000: 2.31% 2001: 2.56% 2002: 2.13% Health care: 2000: 4.33% 2001: 4.81% 2002: 4.42% Hospitality & travel: 2000: 1.71% 2001: 1.72% 2002: 1.55%
  18. 18. Overall corporations spend by Industry Verticals Information technology: 2000: 4.13% 2001: 4.68% 2002: 5.13% Insurance: 2000: 3.78% 2001: 4.11% 2002: 3.49% Media: 2000: 3.66% 2001: 3.95% 2002: 4.13% Metals/natural resources: 2000: 1.84% 2001: 2.30% 2002: 2.01% Professional services: 2000: 5.11% 2001: 6.39% 2002: 5.12% Retail: 2000: 1.64% 2001: 1.80% 2002: 1.63% Telecommunications: 2000: 5.79% 2001: 5.88% 2002: 6.40% Transportation: 2000: 3.79% 2001: 3.93% 2002: 4.17% Utilities: 2000: 3.61% 2001: 3.90% 2002: 2.43%
  19. 19. FY07 Vertical market exposure for industry exports
  20. 20. Domestic IT Services Revenues by Key Vertical Markets (2004)
  21. 21. Growth of IT Spending in India
  22. 22. Five Year Revenue Forecasts for Key Service Lines in the Domestic Market (INR Million)
  23. 23. Is Indian economy still robust??? IT spending Till 2010 Asia Pacific’s 10-16% India’s 17.6-24% China 10-13% Global IT spending 3.3-6.5%
  24. 24. <ul><li>North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010. </li></ul><ul><li>Companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don’t have scalable IT systems. </li></ul>Is Indian economy still robust???
  25. 25. <ul><li>The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan. </li></ul><ul><li>These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015. </li></ul>Is Indian economy still robust???
  26. 26. What the credit crunch means for IT <ul><li>Hardware and software vendors will feel the squeeze </li></ul><ul><li>Hastening the move to SaaS and open source </li></ul><ul><li>Outsourcers tied to an industry in crisis </li></ul><ul><li>In the long term, outsourcing booms </li></ul><ul><li>Every cloud has a silver lining </li></ul><ul><li>Faster shift of jobs from West to East </li></ul><ul><li>Contract workers will suffer </li></ul><ul><li>Financial services divisions will take a hit </li></ul><ul><li>Global IT spend will be resilient to the economic slowdown </li></ul><ul><li>More home workers </li></ul>
  27. 27. <ul><li>Trying to get best pricing and terms for their IT purchases </li></ul><ul><li>They will ensures they get the best value from their IT purchases. </li></ul><ul><li>- Buy only functionality that works, and that they actually need </li></ul><ul><li>- Avoid hidden costs and risks </li></ul><ul><li>Identifying major cost-saving opportunities </li></ul><ul><li>- Whether their spending is higher, relative to best-in-class peers.   </li></ul><ul><li>They would implement cost-savings technologies </li></ul><ul><li>In implementing priority technology. </li></ul><ul><li>Application Rationalization </li></ul><ul><li>. </li></ul>What are the next strategy of companies on tech spending
  28. 28. <ul><li>Implement cost-saving process improvement </li></ul><ul><li>- In achieving hard-dollar savings from process improvement </li></ul><ul><li>- Project prioritization or portfolio management </li></ul><ul><li>- Offshoring or outsourcing </li></ul><ul><li>- Asset management </li></ul><ul><li>- Workforce optimization </li></ul>What are the next strategy of companies on tech spending
  29. 29. Next level of game for SIBIN it
  30. 30. My strategies
  31. 31. How ??? Pressures     Actions Capabilities   Enablers   Need to demonstrate and improve Return on Marketing Investment (ROMI)  Track customer behavior Measure customer value KPIs  Real-time analytics  Define and develop customer profitability and lifetime value models  Have processes and systems in place that utilize customer information to support Sales & Marketing operations  Customer Data Integration (CDI) and data management  Define and track marketing programs  Develop a cross functional Customer Intelligence Center of Excellence  Statistical modeling and analysis  Customer routing and lead prioritization based on channel, cost and capacity 
  32. 32. Closing the Circle of Lead Management

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