Over the last 2 months, I have had a number of queries from analysts, media and our employees asking about the impact of the downturn on the future strategies of IT companies & how companies big and small have responded to the slow down. So, I felt this would be an appropriate topic for my inaugural blog.
The Indian IT sector has successfully weathered the storm and overcome troubled times; its grittiness can be seen in the numbers: software exports for the year ending March 2010 are estimated at US$49.7b, having grown 5.5%.
This shows the resilience of the Indian IT sector and how it has coped with the crisis by rethinking and rebuilding without compromising the long term business model. The long term impact of the economic slowdown may have been relatively bigger on small and medium IT services companies compared to their larger counterparts, but size differences aside, it is how well the business is run that determines the health of a company. In this recession, larger businesses resorted to cost and process optimization; it was a time for them to identify and invest in their big bets for the future. Wipro has done the same and we shall see the benefits of these bets. For smaller companies, it was an opportunity to identify and strengthen their niches.
Looking ahead, traditional IT services can get commoditized or automated. The IT Product is giving way to ‘Service Ubiquity’. Wipro is rising above the challenge by having a balanced emphasis on global and emerging markets, focusing on new growth, customizing offerings, productizing our proven solutions and reinventing some rules of business and engagements. We are putting more skin in the game and offering outcome-based business models. For example, for one of our customers in the telecom service provider space, part of our payment is linked to the profitability per subscriber. During the slow down, Wipro made great strides in industry-specific solutions that enabled cost cutting and reduction in capital expenditure. We, in fact, follow what we preach and gained tremendous benefit ourselves by launching a private cloud for internal use. We have seen a dramatic reduction in procurement time & costs as well as realized high energy savings.
Downturns will continue to be a part of the game, but I see them as opportunities in disguise; how companies react to these downturns will differentiate them in the long run.