Exploration of up-skilling trends (most popular themes for middle / senior management teams) in Indian IT Industyr: Contextualized by SWOT analysis and examination of Industry megatrends

1. Indian IT Industry: Quick facts
• Impressive 27% CAGR over last 5 years
• Key contributor to India’s Re-Branding, it accounts for 7% of
India’s GDP, and 35% of Export
• Attractive Sectors: Government, healthcare, education,
telecom, Financial services
• Domestic IT market witnessing huge growth
• Less than 3% of people in India own a computer today (1/5th
that of China). Huge potential
• Government key spender through its ambitious eGovernance
Projects (INR 23,000 Cr. Worth projects envisaged under
Five-year Plan launched in 2006)

2. Indian IT Industry SWOT
STRENGTH: WEAKNESS:
* Skilled manpower availability / * Known as low-cost destination
Elaborate training infrastructure * High Attrition, Rising salary
* Mature GDM, Quality Processes levels and other cost bases
* Cash-rich; Can invest in * Linear business model and
innovative business models concomitant scale-diseconomy
OPPORTUNITIES: THREATS:
* Exploding domestic market * Economic uncertainty /
* High government spending and Currency fluctuations
export-promotion Sops * Other emerging competitors
* Biz-Model innovation for SMBs * Protectionist sentiments

3. IT Industry Landscape
Global IT Industry Size: US$ 1614 Bn
Indian IT Industry Revenue: US$ 71.7 Bn (Growing at CAGR 27%)
*2009 Data

4. IT Products Industry
Market Size (2007) Market Size (2011E) CAGR
US$ 250 Bn US$ 339 Bn 7.9%
Trends:
– Stiff competition, Rapid technology changes
– Changing customer needs forcing frequent product introductions
– Cloud computing to gain momentum
– Security issues becoming increasingly important
Concern:
– Growth rate expected to be subdued going forward
– Customer-centric Innovation
– Piracy major concern (Global loss ~US$ 48 Bn)

5. IT Services Industry
Market Size (2008) Market Size (2012E) CAGR
US$ 360 Bn US$ 441 Bn 2.8%
Services lines:
– Projects based
– Outsourcing
– Support / Training
Trends:
– Outsourcing to grow, but enhanced pressure on billing rates and Top
line growth
– Big players to try moving towards
• Higher value-add services
• Greater workforce utilization, and
• Lowering SG&A expenses

6. IT Hardware Industry
Market Size (2008) Market Size (2012E) CAGR
US$ 594 Bn US$ 683 Bn 3.6%
Growth rate in Asia is three times the growth rate in North America
Trends:
– Cost optimization across value-chain (Design,
Manufacturing, Warranty, Operations etc)
– Increased focus on R&D
– Supply chain optimization required for reducing inventory

7. Domestic Market
Growth 1.0 (2003 – 2008)
• Off-shoring Revolution
• Unprecedented growth of Indian Economy as well as in Domestic ICT
demand; Revenue growth of 300%
• Domestic demand mainly led by large Corporate / Public sector
Growth 2.0 (2010 Onwards)
• Growth to be led by End-users, SMBs
• ‘Consolidation’ and ‘Leveraging’ of IT and telecom infrastructure built in
Growth Phase 1.0, to realize greater business efficiencies and launch
innovative product/solution offering
• Increased adoption and acceptance of ‘game changing’ technologies
• Governments’ economic stimulus is unlocking market potential

8. Industry Megatrends
• Strategic M&As / Alliances for Platform creation
• Alliance-driven Sales model
• Greater Partnership with client for End-to-end offering
– Larger share of wallet and connecting with stakeholders so as to
create barrier to entry
• Sharper customer segmentation, Sub-Verticalization and
Domain-Specific Branding
• Multiplicity of Business Models and Growth Agendas
• Cost optimization across Value-Chain

9. Era of Strategic Alliances

10. Outsourcing Relationship - Roadmap
Source: Harvard case-study

11. IT / ITeS Industry: Challenges
• Growth: Organic / Inorganic, linear vs. non-linear
• Coping with speed of change and continually innovate / reinvent itself
• Develop innovation capability. Also ability to sell Innovation
• Successful differentiation (Branding)/ staying ahead on the curve
(Business model Innovation)
• Identifying strategic targets for Acquisition / Alliances. Quantifying
Synergy
• Alliance management. Moving up the value-chain with clients
• Ability to sell high value-add services (e.g. Business Process
Integration)
• Transitioning top-talent from Technocrats to Business Managers
• Sales team need to understand data and communicate Business
Value of IT
• Attrition

12. Strategic options to cope with these Challenges
• Understand Competitive Strategy; Invest in Execution Capability
• Industry is in Growth stage hence Identify Niches, Innovate in Business
Model and invest in Branding
• Scenario Planning: Understand forces shaping Business Landscape
• Change Management - to successfully transition Organization
• Appreciation of Marketing, and Customer-Centric Innovation
• Co-opetition: Cooperate in Value-Chain, Compete in Core-competence
• Develop capability of Cross-cultural Integration, Strategic Alliance
Management and Strategic Account Management

13. Strategic options …
• Move beyond Delivery Capability: Understand Client’s Business
– Because your customer may not understand Technology
• Create various platforms to bring together key Decision Makers and
enable them to experiment with IT
• Proactively build enhanced awareness to transformation potential of
IT adoption
• Evolve multi-tiered Capability Enhancement Strategy
– Tackle knowledge-attrition of your Senior Managers
– Create Leadership Pipeline; Support transition through Leadership
stages
• Strategic Human Resource Management
– HR as Strategic Partner. Alignment with Business Strategy
– Robust Supply Chain, Continuous re-skilling, Attrition Management

14. Up-skilling trends in IT Industry
• Building innovation culture
– Foster Innovation and Creativity, Revolutionize service offering
– Successfully differentiate from overcrowding competition
– Identify approaches to non-linear revenue growth
– Building a learning organization (Knowledge-centric organization)
• Planning under uncertainty
– Appreciate the changing Business Dynamics
– Discern inflection points. How current business models might be
rendered obsolete
– Establish organizational ability for adapting to possible futures
• People management for higher performance
– Energizing the workforce
– Leading high-performance teams
– Leading in a matrix organization – Influencing without authority
– Managing the new generation talent - tools to motivate people

15. Up-skilling trends… (2)
• Developing Strategic Thought Process
– Strategic Planning Process
– Strategy Execution
– Competitive Strategy, Globalization Strategy, Corporate Strategy
• Customer Centricity
– From being operations/product focused to being customer focused and
developing the sales and marketing competencies
– Silo-busting that promotes Customer Focus
• Leadership Development
– Transitioning through Leadership Stages (Ram Charan’s Model)
– Change management: Overcome overt and covert resistance to change
– Self Leadership: Breaking the inward looking mould
– Looking at the big picture, developing a vision and motivating people to
achieve that vision

16. Up-skilling trends… (3)
• Product companies
– Customer centric innovation
– Leveraging informal networks for Innovation
• Corporate teams
– Finance for Non-Finance Executives
– Value creation through M&A
– Post-merger integration
• Sales and Marketing
– Accelerating Sales Performance
– Relationship management : Engaging the client like a strategic partner
– Marketing Strategy, Services Marketing, B2B Marketing
• HR Teams
– Aligning HR with Business Strategy
– Strategic Talent Management
– Cross-cultural integration

17. THANKS
Please share your comments: mrinalsri@gmail.com