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The question we need to answer is ‘will this represent the end of the traditional outsourcing model and where will the industry go from here’. The industry is re-architecting its value proposition for customers to drive a transformational agenda for its customers. This includes:
IP creation: The industry is transitioning from enterprise services to a world best described as ‘enterprising solutions’. These are not standard lift and shift solutions - customers expect the industry to tell them what is best, suggest changes, improve and replace existing workflows. The industry is leading the drive to de2sign solutions incorporating SMAC (social, mobile, cloud, analytics) to offer innovative offerings.
Reinvented business models: The industry is altering its business and delivery models in tune with dynamic customer needs. Organisations are verticalising internal structures, offering clients the choice of offshore, onshore and near shore delivery, moving towards fixed price, outcomes based pricing models as well as managed services
Expanding the market: Whether it is healthcare, utilities, education or legal, the industry is tapping business opportunities being created in these verticals. At the same time, it is foraying into markets like Africa, Asia, China, Latin America, amongst others. Europe despite the economic crisis, demonstrated higher acceptance of global sourcing. Markets such as Germany or France, which have traditionally been slower are showing signs of opening up to the idea of outsourcing as a way to keep their costs under control and gain greater flexibility in light of the increasingly volatile markets in the euro zone and beyond
The relationship chain: Customer centricity is the key driver for the industry and as the focus shifts beyond cost, the industry has expanded and built client relationships across business, finance and IT. These relationships are helping the industry understand the customer priorities and deliver solutions beyond cost.
Opportunities in the Indian domestic market are fast becoming the hotbed for the industry. Data indicates that India was the fastest growing IT market in the world, fourth largest enterprise software market in APAC and is slated to be the world's fastest enterprise software market through 2016. Product companies are increasingly leveraging the cloud to offer enterprise solutions to customers.
Another megatrend that is reshaping the industry is the proliferation of the connected consumer. By 2015, McKinsey projects India will overtake the U.S. to have the second highest number of Internet users after China. Globally, about two billion people currently use the Internet. This adoption of the Internet will create content and commerce businesses that have the opportunity to create an additional GDP contribution of $100 billion by 2015, from about $30 billion in 2011.
Technology entrepreneurship is also witnessing a mega fold increase in the country, Availability of angel and seed capital funding, business incubators and accelerators, mentor networks are enabling entrepreneurs to create cutting edge solutions in technology white spaces that leverage the power of the connected and interdependent global networks. Data indicates that in 2011, almost 450+ funded technology entrepreneurs were created in India and Bangalore was ranked amongst the top 20 start-up ecosystems in the world.
Together with positives such as improved security and attention to skills development, the Indian IT-BPM industry is reshaping itself to maintain its growth trajectory. Its outlook remains bright and the sector will remain a game changer in this decade.
Som Mittal
President, NASSCOM
