Technology Democratisation, Captive Regeneration To Spur IT Industry Growth In 2013

Zinnov, a globalisation and market expansion advisory firm, has released its predictions for the Indian IT industry for 2013, revealing new market opportunities and focus areas for technology firms – both MNCs as well as service providers – in the New Year.

‘Regeneration’ to be the next growth frontier for captive centres in India: Over the last 7 to 8 years, the captive centres of large BFSI, Retail and even some large Engineering R&D captive centres have been delivering a wide range of services. Now it is getting exponentially difficult to derive further efficiencies in the current form and manner, in which the captive centre is set up. The only way to derive further efficiencies is by outsourcing to a partner. Service providers are out on a shopping spree and a viable captive centre is something that will definitely interest them. Also, by taking the outsourcing option and re-badging some of their resources to service providers, the captive centres could channelise their capacity, capability and management focus towards transformational initiatives of their CIO and Head of Operations. Also, given that the economic pressures are expected to continue into 2013; divesting a portion of a mature captive operation that commands a good premium could also be a definite booster to the financial statements.

‘Function over Form’ Drives Affordable Products Engineering: There will be a spike in ER&D and overall solutioning demand for affordable products, especially in Housing, Cars, Medical Devices and Internet Mobile Devices (like tablets, smartphones). With shrinking wallets and increasing budget cuts all around, it is expected that customer choices across both the developed and emerging markets is likely to shift to function over form. Service providers can now channelise frugal engineering, open source capabilities and predictive analytics; to create compelling industry-specific solutions.

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Democratisation of Technology: Technology and innovation in hi-tech verticals like software, and consumer electronics will diffuse rapidly to core verticals like automotive and industrial.

• Mobility and Connectivity are considered source of differentiation among companies across industry verticals. Technologies such as internet, wireless, gesture recognition, etc. were hitherto the forte of hi-tech companies. But, automotive companies are increasingly adopting these to create differentiated products.

• Big Data and Analytics is changing how traditional companies serve their customers and is opening up great possibilities for the future. The traditional core companies like Siemens and GE who are typically well known for their large industrial products are transforming themselves by creating products and services around Big Data and analytics.

Local Problem Immersion Driving R&D Globalisation: With the markets stagnating in developed geographies, companies are focusing their efforts to cater to emerging markets with customised/ targeted offerings. At the same time, there is an increasing cognisance that local problem immersion is necessary to create these offerings. This coupled with the stark shortage of engineers in the company’s native geographies is pushing companies to not only set up new R&D centres in India, but also increase the value contribution from their existing India centres. In just the last 2 years, 100 companies such as Panasonic, Airbus Innovation, Facebook, LinkedIn have opened R&D centers in India.

Commenting on the trends for 2013, Pari Natarajan, CEO, Zinnov, said, “Today the Indian technology industry is at an inflection point where innovation must have transformative rather than incremental impact. The Indian technology ecosystem has matured to a point where multinational organisations across verticals are looking to leverage our knowledge, skillsets and capabilities in new technologies and frugal engineering. In 2013, service providers can capitalise on this interest with customised, affordable product offerings while multinationals will look at developing differentiated, technology-enabled products that address local problems.”