Infy, Wipro, TCS need to create IP assets

The current (third) decade of IT services is based on process improvement and creation of intellectual property (IP). Taking the cue, the top three Indian IT vendors "� Infosys, Wipro and TCS "� are clearly differentiating them in terms of business strategies, according to a recent Forrester research.

While, cost arbitrage took centrestage in the first decade of Indian IT services, the market, which was earlier just confined to the US and Europe, is widening up to other geographies like Australia, Japan, Singapore and many others. That about 18-20 per cent of the revenue of TCS, the largest IT exporter in India, is coming from outside of the US and UK is ample proof of that.

"Infosys, TCS, and Wipro are at a strategy cross road now. From a stage of undifferentiated, low-cost sales proposition three years ago, these firms have traversed to a point of inflection and have built their own strategies "� in a manner very different from others," says Sudin Apte, country head (India), Forrester Research.

Forrester had interviewed the CEOs and members of senior management teams of the top three IT firms to know how they are preparing themselves on their way towards achieving $10 billion topline. Infosys, for example, is leveraging its global leadership to show a much wider face by either bringing in foreigners as its board members and even by building a pool of global talents.

Currently, over 150 graduates and techies from premier European business schools are part of its consulting team. Besides, it has also recruited about 200 odd MBAs from across the globe in its global teams.

Wipro is pioneering a concept called 'Toyota lean management process' to improve its productivity and tell the India cost story. Besides, the company has started wooing science graduates or graduates from diverse backgrounds which earlier were a big 'No' in the IT industry as a part of its differentiated strategies.

"They (the IT firms) have recruited over 700 science graduates in the past. This is one mechanism to cut costs since the cost structure goes down and even attrition is very low. And secondly, they feel they don't need engineers for every type of work," says Apte.

TCS' model is more based on its technology edge with focus 'first build and prove it "� brick-by-brick.'

"As a company having the largest base of account, TCS believes in building technology solution blocks and testing them before going to market," says Apte.

The focus is also on building centres of excellence to strengthening the global delivery model. The company is one of the to have a sizeable chunk of its workforce working overseas.

Apte opines that while Wipro is continuing core differentiation based on new ways to cut costs, the company needs to evaluate other options for non-linear growth such as an IP-based solution framework and not dilute its focus in its strength areas of R&D services and infrastructure management.

Similarly, TCS which is banking upon its technology-centric offering, needs to add more marketing flair stating clear articulation of its value proposition and benefits.

And to succeed in this competition, "we recommend that Infosys should build a strategy around its core competency of process superiority, efficiency, and the offer of better IT and business value for US companies", says Apte.