Managing In Difficult Times Jan09 By Krishnakumar N Mindtree

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The eighth meeting of the NASSCOM Noida CEO Forum. The general mood these days is of distinct uncertainty. How long? When etc. Will it be over in Q1, Q2 or simply which of the Q’s? After all, how long can you run business by simply “crystal gazing”. We decided to reach out to our members by engaging Mr Krishnakumar Natarajan, CEO, MindTree Ltd, to come and share with us his experience in “Managing a downturn”. “Managing a downturn”. Is it a strategic issue? Yes. Marketing? Surely. Finance? Has to be. Operations? why not? and most definitely HR.

To shape our business for future, we must embark upon a strategy, which focuses upon simultaneous activity in protecting volumes, reducing costs and increasing prices. Fundamental proposition, you may think, but when you conceive this idea in the context of a sagging economy, not just locally but even more so globally, does the realization hit you. The way we do business needs to change radically, where mere survival seems a challenge at times.

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Managing In Difficult Times Jan09 By Krishnakumar N Mindtree

  1. 1. M1 M2 Managing/Leading in Difficult times Jan 2009 CONFIDENTIAL: For limited circulation only ©© 2009 MindTree Limited 2008 MindTree Consulting
  2. 2. Slide 1 M1 MindTree, 1/5/2009 M2 MindTree, 1/5/2009
  3. 3. CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  4. 4. Outsourced services Market-A perspective lIndian IT services Market performance ( 1998-2008) l 8% of incremental GDP growth. l18% of incremental exports/16% of total exports. l $40.5B exports expected to grow 15-18% this year. l Headroom available for continued growth. lNew Services ( IMTS/KPO etc) lNew Business Models. l We are addressing a market which will be $1.2 trillion by 2020. lExciting opportunities for growth and success for well managed companies. CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  5. 5. Plan or not Plan CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  6. 6. Current Financial crisis lImpacting broad set of businesses leading to a tight credit crisis. lConfidence of investors low. lRecession trends visible in various markets. lOur assessment is that the process of rebuilding will be 12-18 months. lSigns of recovery later half of 2009. lWhat are you hearing in your markets/with customers? lWhat is it that we are hearing from customers on IT budgets? l Flat lCut 5-10% lIncrease 5-10% lIncrease > 10% CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  7. 7. Strategy Implications lFocus on strategic & scalable markets & customers (dropping some) lNeed to relook at practices/Industry groups/products with sub scale operations. lRelook at customer profile. lIndustry growth likely to be <10% and you must grow atleast 25% ahead of Industry. lInvestment into emerging businesses lContinue investments into emerging markets. lNeed to build a business model to deliver current services at Asian cost levels. CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  8. 8. Strategy Implications and Key Levers Customer focus- Deepen engagements Current Cost Financial removal- Focus on Operational receivables Crisis excellence Delivery excellence- Value addition CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  9. 9. Areas for Focus l Expand into APAC (include India) as a key market. l Asia expected to be 20% of World GDP. l India market $120-130B by 2020. l Address new market segments. l Energy &Utilities/ Govt./Healthcare in IT services. l Healthcare/Defence in Prod Engg services. l Evaluate opportunities in SMB segment. l Business model and Value proposition critical. l Spending in IT expected to increase 7% CAGR . $250B market. l Investment in Frameworks & reusable components. l Communicate-Communicate- Balance realism and optimism l Innovate- New problems… New solutions l Reevaluate people/compensation structures CONFIDENTIAL: For limited circulation only © 2009 MindTree Limited
  10. 10. Imagination Action Joy Krishnakumar Natarajan CONFIDENTIAL: For limited circulation only ©© 2009 MindTree Limited 2008 MindTree Consulting

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