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The guessing game

Three industry majors peer into the future

The NASSCOM'97 business conference ends here in a grand finale at the Hotel Westend today. Three days of intense deliberations have been summed up by three industry majors in the final session on the 'Need to sub-contract and directions for the next five years for the software industry'.

T O D A Y

• The guessing game • Production pains • Banking on tech • Gushing Ghosh

Infosys Technologies Limited Chairman and Managing Director N R Narayana Murthy, Tata IBM Limited Managing Director Ravi Marwaha and Mastek Limited Managing Director Ashank Desai did some scientific prophesying as the hall, packed to the seams, listened in rapt attention.

"In five to ten years, all of us in the IT industry will create a globalised corporation that will include all nationalities and races and will compete in a meritocratic environment," declares Murthy.

He foresees "A pan-global organisation which will produce where it is cost-effective and sell without any tariff barriers… We will also make a paradigm shift from providing commodity services to premium services. And those who are smart will garner 30 per cent of this market and those who aren't so smart will get 10 per cent."

Murthy puts the cumulative growth rate for the Indian software industry close to $15-16 billion in 9 years. "That figure comes after seeing the growth rate of the industry as computed on March 31, 1997, to be at $1.2 billion which would be close to $5-6 billion on March 31, 2002."

"Of course, we have pressing imperatives to reach this level of global competency. With salaries going up by 25-30 per cent, we have to quickly move up the value chain, develop a clear methodology, have a sales collateral, provide intense training, reduce the cycle time for production, increase productivity, start development centres in all parts of the world, employ high-quality employees, also in the G-7 countries, in short, create brand equity to ensure a positioning of a premium player rather than a commodity player," he exhorts.

Murthy is confident that "We will move away from the paradigm that 'we are Indians and we come cheap' to be as good as world players and provide high-quality services. The other essential shifts in the environment will be from cost-based to value-based services, US-centric to international markets, internal to external, technical to business, analysis to synthesis, commodity to premium service, general-value to focuses, people-based to intellectual property rights-based, growth in percentage to growth in market share and from man-hour-based services to a solutions-based paradigm."

Murthy has one final evaluation to make: "I don't see our country having surplus foreign exchange in the future, we have to still earn it if we believe in the meaning of being self-reliant. I would work to generate world currency, use core competency, earn foreign exchange, globalise, use local talent… and I firmly believe this will happen in India by 2002."

Desai is a reluctant prophet. He does not like to make predictions. He would rather look at the future by laying the cards on the table and analyse growth with a little help from friends.

"The World Economic Forum Survey placed India 43 on a list of 53 in terms of core competitiveness, government policies, technology, labour, institutions, management, finance, openness of economy… We've got three Internet connections for every 100,000 persons, two ISPs for every 100,000, two PCs per 100, and 0.2 phones for every 100,000. Given these indicators, unless we tremendously grow to at least 1 PC per 100 to 9 PCs per 100, we won't be global players," he warned.

"We cannot generate applications without infrastructure. How much is the government willing to help? Except for Chandrababu Naidu, how many CMs think of technology? Not many," he pointed out.

Despite these obvious paradigms, Desai predicts the industry will grow to $3-4 billion by 2002. "Big companies will benefit, smaller ones will find niche segments to cater to, but the middle ones will need to focus strategy and very carefully locate their businesses."

Marwaha agrees with both. He recalls how when management guru C K Prahlad was asked if India would be a competitor in the global market, he had said: "If that's what you're asking then, no, I'll sit down. But if you ask how India can become a global player or demolish its competition, I can talk for six hours..."

Marwaha believes we are on the brink of a major economic revolution and yet besides the IT industry and the jewellery exporters, no one else in India even thinks of competing in a global market. "I foresee a huge connected world where everything from cars and fridges and people are linked with each other, you can transact in real time, across geographical boundaries in an instant. Now, if you are ready for it, you catch the bus, if not you'll vanish."

Amazon.com's is a minor success story, he claims. "The same concept can be applied to every sphere of our lives. We have to bring information technology into our fold and an even bigger opportunity lies in leapfrogging this technology, in creating our very own applications." How will this happen?

"By setting up operations outside India, having a multi-lingual support, and most importantly, bringing about a change in attitude. I'm amazed that we're no longer thinking of 'if' but 'when', Now the sheer feedback will cause a phenomenal growth.

"We also need to hone our skills; skills to develop new technologies. And we need great ideas. 2002 will be a very tough world, but we have the ingredients to be winners," he concluded.

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