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R Chandrashekhar has taken over as the fourth president of Nasscom at a crucial juncture. Not only does he have to drive the $108-billion IT services industry to touch $300 billion by 2020, he has his hands full with challenges ranging from changing immigration rules to adopting new business models by embracing social, mobility, analytics and cloud (SMAC). In an email interview with Shivani Shinde Nadhe and Itika Sharma Punit, he talks about the road ahead. Edited excerpts:
What will be the key focus areas of Nasscom under your leadership?
Opportunities are vast at this particular juncture and exciting times lie ahead for the industry. Some of the priorities for the industry going forward will be verticalisation, operational excellence and expanding the global delivery model. We will focus on enabling radical transformation of key sectors in India through use of information and communications technology (ICT) to reduce costs, increase access, enhance efficiency, enable innovation in the sector. Going forward, the industry will increasingly collaborate, connect, co-create – specifically tailored model for each specialised domain in the IT-BPM (information technology-business process management) sector.
From time to time, we have heard that Nasscom is all the top 10 IT services firms. We have seen the products firms starting their own platforms called iSpirt. How would Nasscom keep itself relevant?
Nasscom has been catering to all stakeholders alike - from big IT services companies to small players, Indian service providers to MNCs (multi-national companies) and GICs (global in-house centres). Our ‘10,000 start-ups’ programme is extremely successful and is specifically focused on the small product companies.
For long, the IT industry has been focused on exports, while MNC players like IBM have done market changing deals in domestic market...
The market in India is maturing and was the fastest growing market in the year. Nasscom will look to partner with the government in enhancing technology adoption in the country. The industry is increasingly prioritising domains based on potential size, possible impact, readiness of leadership and role of government. Changing models will bring compelling business innovations with greater breadth and specialisation across key verticals - BFSI (banking and financial services industry), telecom, healthcare, education and social entrepreneurship. Today, increasingly-competitive Indian organisations are undertaking various e-governance initiatives like Passport Seva, the SWAN and IRCTC that have enhanced focus by the government and helped provide IT to new customer segments.
Several large Indian IT companies are facing regulatory and compliance-related issued in the US. Do you think there is a need for an introspection across the industry?
I think we need to make sure that the burden of compliance and the regulatory framework is not such that it is dampening the spirit of start-ups and innovation. We don't want an environment in which an entrepreneur is spending 80 per cent of his time in getting clearances and only 20 per cent on innovation. Both in terms of policy and in terms of the regulatory framework, I think there are areas that need to be worked out and we will give feedback to the government on the same. I think there are a lot of things that have been done by the government. There have been a lot of changes that we have taken for granted, and we are instead focusing on what has not been done.
We have been working with various coalitions and think-tanks to represent the industry’s viewpoint on the issue. Nasscom has had intense engagement with the policy makers and governments on both sides to ensure that all the concerns are well represented. The Indian IT-BPM industry has added significantly to the US competitiveness, contributing to social security, local taxes, creating local employment, and contributing to the community. Nasscom’s efforts have resulted in a more positive alignment to views with a growing realisation in the US that what is bad for Indian IT would also be harming them.
There is a broad belief that with the demand pick-up, the IT sector is likely to see higher growth in 2014, as against a year ago. Do you agree?
Year 2014 has brought optimism for the industry with drastic improvement in the economic climate and expected rise in technology spending, despite global uncertainty. The industry will continue to grow at 12-14 per cent and will transform from technology providers to strategic business partners, and offer a considerably wider spectrum of services over the years. The Indian IT-BPM sector will continue to grow and impact India through job creation, foreign exchange, exports and position India as global IT-BPM destination.
Also with the industry maturing is it right to assume that growth levels will be at low teen levels?
Outlook for the Indian IT sector for FY14 looks good and NASSCOM will maintain revenue guidance at 12-14% for FY14 without revising it higher. Resurgence of demand and increasing usage of technology for transformation is helping the industry regain growth. Resolution of industry issues like taxation, SEZs, past tax issues, service tax refunds, APAs, safe harbour, will create a good base for the future. With the Industry investing in innovation and working towards consumerization of IT with technologies like social media, mobility, analytics, cloud (SMAC) we can see good growth in the future.
Is the industry well prepared to ride the next wave of innovation (SMAC)?
Key trends like consumerisation of IT, SMAC, changing lines of business, new under-penetrated markets will alter the future customer-vendor relationship. SMAC has reoriented the business model of traditional IT-BPM firms, by shifting focus from cutting costs and managing IT infrastructure. NASSCOM will continue to act as a catalyst by bringing the ecosystem together and helping emerging companies leverage the power of SMAC technologies to the optimum. In India and globally, small businesses are thriving in the digital market place built around SMAC technologies as SMAC empowers innovative thinking in business and enables them to adapt to a digital environment that benefits from value expectations of customers. The market for these technologies is expected to increase to over $1 trillion by 2020.
What would be three big challenges for Nasscom?
The uncertainty of the global environment and protectionist measures in certain economies, making India business friendly and a preferred destination for the sector and constant need to innovate are some of challenges that the industry needs to continuously work upon.
