Indian IT companies need to be proactive in problem recognition and providing solutions by adopting a consulting firm approach rather than being reactive, said Infosys co-founder NR Narayana Murthy. That, he argued, will help the companies increase their per capita revenue.
Murthy, who was speaking at a convention of the All India Management Association (AIMA), said that Indian IT firms will continue to grow at 7-10% with operating margin about 15-20%.
Talking about consolidation in the industry, Murthy said that the valuation of the top 6-7 Indian IT majors was in thousands of crores and none of them had the financial resources to acquire each other. As for acquiring smaller companies, he said the only reasons would be to multiply revenue in a weaker area, bring higher margins or an IP, or strengthen presence in geography.
Wipro chairman Rishad Premji, who also addressed the event, said the IT industry struggled in the first quarter because customers cut spending on technology early on in the Covid crisis, but since then the industry had stabilized as customers have come back looking for help in shifting to the digital model. “There is a change in the customers’ mindset and they are becoming more comfortable with the digital medium,” he said.
However, he cautioned that while cloud and software as service would change the industry, there were still many large companies with multiple legacy systems and they would need help in transitioning to the new technologies. He said the Indian IT industry would leverage new technologies, such as AI, to deliver work to its customers.
Premji added that the work from home trend will not lead to foreign customers transferring work from local remote workers to Indian remote workers. “Now, it will be a hybrid model and reskilling people would be a major task for Indian IT companies,” he said. Premji said the digital delivery model had opened up tremendous opportunities for the IT industry, especially in the area of talent sourcing.
“We can crowdsource talent from anywhere in the world and provide the same quality of work from anywhere,“ he said. Premji credited the government for relaxing work regulations and permitting work from home. He hoped that the change would be made permanent beyond the current expiry of December 3.
Source: The Times of India