'CIOs Should Be Vigilant To Stay Afloat In Recession'

In an insightful conversation with Biztech2.0, Ashank Desai, founder, Mastek, gives a pan-industry view of the impact of recession and lists some CIO best practices to deal with the current situation.

Please talk about IT in the current scenario.

The current scenario is definitely very challenging. The whole world is changing everyday and therefore some of the situations we find ourselves in are very dynamic. We still feel that the Indian IT industry will grow at 18-19 percent or somewhere close to that, which is less than last year, when it grew around 27-28 percent. The situation is not very gloomy, but nevertheless it has put pressure on IT companies in terms of cost and other parameters. Through 2009, I think we’ll really have to watch ourselves and prepare the industry to be more resilient, adaptive, and quick on foot to make changes that are required to fight any kind of financial demand or meltdown.

The industry went through a similar meltdown in 2001 and does have an experience of working in tough times. I’m hopeful that we’ll pass through this and come out and look at the larger picture.

What has been the most significant impact of the recession on the Indian IT industry?

The impact revolves around growth, which has seen a reduction, which also translates into lesser recruitment. The impact of recession is also reflected in profits, which in turn puts pressure on the costs. There is a general tightening of the belt, and things that are irrelevant, superfluous and non value adding now find no place in enterprise strategies.

Could you please highlight CIO best practices in the current scenario?

CIOs have aggressively been outsourcing even in India. They will now have additional internal pressure to reduce budgets. However, IT needs to be deployed; and 70-80 percent of this budget is already fixed. They have a limited budget to do things and thus CIOs need to be proactively cost effective by seeing whether there is an outside company that is willing to do some work for them or by looking at alternative, low-cost technology solutions. CIOs will have to be very vigilant and get the best from the budget that they have and outsourcing could be one of the solutions.

They should use the experience of IT companies, who are looking at the domestic market now. My advice to CIOs is to focus and look at large Indian IT companies, who are doing a lot of work globally, and CIOs can benefit out of their experience.

What according to you will be the major technology trends for this year?

Some of the technologies are just milestones. There will be quite a lot of talk about SaaS, cloud computing, large scale Internet data processing facilities, mobile technology moving towards high bandwidth and censor technology. Those technologies that found roots earlier will now start creating impact and some of them, which have not yet started out will make appearances this year.

There will be a lot of issues surrounding security because of the situation in the country and worldwide. There will be a lot of security-related software coming into the market, some intelligent solutions that will look at data security as well as physical and Internet security.

Which trends do you think are influencing technology and business services?

Technology services have many components and it is a big subject per se. At a very high level, it is about becoming knowledge intensive and mission critical. Being mission critical means doing something beneficial for your customer such as offering them network applications. In the end, it is about running an entire IT department sitting in India. The mission critical part does not have to pertain only to solutions. These are the two dimensions of IT services and new solutions will emerge out of these.
What do you see as the competition for the Indian market?

There are companies in South and South East Asia that are major competitors for India. But it must be taken into account that India already has a 50 percent or more than 50 percent lead in IT and a little less that 50 percent lead in the BPO sector. We have a commanding lead in what we are doing. We have a brand, know how, knowledge, capabilities and beyond all that we have talent in large numbers, plus our human resources have a good grip over English.
What according to you should be the vision and action for the future?

We feel that we are almost a 50 billion worth industry now and I think we can grow at least five to six times more through various ways. Today, we are concentrating on business-to-business kind of work whether it is IT, BPOs or business services. We need to move up the value chain in the business-to-business segment.

In IT, it is about solutions and mission critical work. In business processes, it is about delivering gold processes sitting in India. In the end we might be able to run entire firms sitting in India because all business processes are executed here.

We also need to look at business-to-individual transactions, which include providing targeted services to any individual. The other way is to look at the individual providing services to businesses. The market is big and we need to expand our horizon and see how IT can enable service delivery anytime, anywhere.