NASSCOM Newsline spoke exclusively to speakers, analysts and country delegations and invited them to sharetheir views on what they expect from this year’s edition of the NASSCOM India Leadership Forum; what are the trends driving the global IT-BPO industry, and what are the new business opportunities they believe will emerge for India and other nations going forward.

NASSCOM’s India Leadership Forum 2009 will open to a full house in February 2009, creating a platform for many exciting and insightful discussions that have a direct impact on the Indian IT-BPO industry. The world is currently at a very interesting stage with global economic environment in a never before state.

Some of the best, most well-known names and faces from the business and technology world will be deliberating on how the Indian IT-BPO industry can remain competitive and capitalise on the new opportunities available to them. Analysts will talk about how ‘outsourcing’ will achieve even greater momentum. Efforts will be on at the India Leadership Forum to build consensus among participants and create a common strategy and thinking for the IT-BPO industry.

NASSCOM’s India Leadership Forum 2009 will also feature key influencers talking about the economy, growth formulas to succeed, and Vision 2020 for India. Insights provided by these influencers will help the IT-BPO industry gain fresh and crucial perspectives to enable future growth.

Speaker view

MR Rangaswami Sandhill

Global companies are focused on driving efficiencies in their IT capabilities. Companies will continue to consolidate data centres, virtualise their environments and develop innovative telecommuting and telepresence initiatives. This will be under the larger umbrella of greening their IT departments. Green IT could be the buzz coming out of the NASSCOM India Leadership Forum this year

MR Rangaswami Sandhill

“The Indian IT industry is at a crossroad. It can continue business ‘as is’ or look at evolving itself. It can use the downturn move up the customer value chain and seek out new opportunities. I believe if it can make the cultural and business model shift, there are enormous opportunities on the horizon.

Global companies are focused on driving efficiencies in their IT capabilities. Companies will continue to consolidate data centres, virtualise their environments and develop innovative telecommuting and telepresence initiatives. This will be under the larger umbrella of greening their IT departments. Green IT could be the buzz coming out of the NASSCOM India Leadership Forum this year.”

Samantha Covell, BT“I think that organisations across the world will be looking to reduce costs and increase efficiencies in what they do. The continued support and optimisation of work undertaken for existing clients will provide the case studies and references to underpin the sales into the new verticals. Outsourcing will continue to be an important trend. Going forward, organisations will look to consolidate their legacy systems They will require real-time data and the ability to flex their systems on an instant basis. Convergence will also be important, and we will continue to see handheld devices take on greater functionality. Organisations will be less reliant on in-house data housing and will look towards cloud technology to reduce costs. Issues around security of data and resilience of systems will increase.

Customers will expect clear and well-articulated governance policies that they will want to be able to audit. I expect that there will also be greater scrutiny on cash management across the whole business cycle. The onus will be on the IT-BPO industry to prove not only their technical, security and commercial credentials but also their trustworthiness. This is not a tangible thing to prove and I believe that it will require greater degrees of openness than previously experienced.”

International delegation view

BITKOM, Germany

“Not surprisingly, India has become one of the major hubs of the globally present German ICT industry when it comes to optimising the value chain. This is not only about lowering cost but creating added value, gaining flexibility and having access to a talented, young population with its experience in IT.

We are convinced that the NASSCOM India Leadership Forum is not only about listening to interesting speakers and liaising with potential new business partners. We expect this to be a rich source of information concerning the BPO sector but also the vast Indian market as such. We are keen to learn more about future services that can be offered by Indian companies as well as the needs of potentially new Indian customers that our companies want to address. Last but not the least, for us, it’s all about networking — even in a globally linked economy, personal contacts are indispensable!”

Robert Seges, Team Head Services, Polish Information and Foreign Investment Agency (PAIiIZ)

“I’m expecting to learn about current trends related to the market, especially given the international economic conditions. I am keen to hear about the impact of the financial crisis on the industry. Some say it may come as a big opportunity for countries traditionally specialising in outsourcing services. Can Central and Eastern Europe play a significant role here too? What is the perception of CEE among the most influential CEOs? At the conference, I also expect to gain an understanding of the key advantages of the Indian market in terms of attracting a huge number of international projects.

It will be interesting to know whether outsourcing will prove to be a reasonable strategy in hard times. At the conference, our aim will also be to make Indian companies aware that the CEE region is the one with close and well-established links with

EU countries and the US as well. We will encourage Indian companies to grow their presence in Poland.”

Ulrich Bäumer, Partner, Osborne Clarke (German Delegation)

We are convinced that the NASSCOM India Leadership Forum is not only about listening to interesting speakers and liaising with potential new business partners. We expect this to be a rich source of information concerning the BPO sector but also the vast Indian market as such. We are keen to learn more about future services that can be offered by Indian companies as well as the needs of potentially new Indian customers that our companies want to address

BITKOM, Germany

“Germany is one of the most important countries in Central Europe for Indian outbound investments and for Indian companies. Europe is also one of the key areas for Indian investments. I expect that the event will focus on these markets, and also on the key issues facing the technology industry in 2009.

The objective of German technology companies is to better serve their international customers. India is seen as a part of the global delivery model and Indian and European companies can benefit from co-operating with each other. The sharing of know-how, customers, distribution networks, global delivery centres — all of this can be used effectively to better serve the customer base.

The financial crisis and its long-term repercussions will play a major part in the event. I hope that the sessions will highlight the role of technology in overcoming this crisis.”

Ralph Moreau, First Secretary for Science and Technology (Flanders), at the Embassy of Belgium in New Delhi

“Over the past years, we have been keen participants in the NASSCOM conference. Companies from Flanders, Belgium, are very much aware of the opportunities that India has to offer. We already have a large number of Indian companies that are using Flanders, Belgium as a hub to access the European market. Our objective of participating in this year’s event is to once again highlight the opportunities that exist in Europe for Indian companies. This can range from strategic partnerships, joint R&D projects, market access, etc.

The NASSCOM India Leadership Forum is one of the prime events of the year, which brings together all the people in the industry. For us, it is an occasion to catch up with existing contacts, and to meet new business leads. Our increased presence at the forum this year, highlights our belief in working with India and NASSCOM during these uncertain times. Our aim is also to build bridges between our economies. We have a lot to learn from each other. Flanders can be the gateway to Europe, for Indian companies ready to step up their global presence.”

Amin Khaireldin, Strategic Advisor and Board Member of ITIDA, Egypt

“The forum has long been India’s premier global meeting for the IT-BPO industry and it provides an opportunity to meet with some of the industry’s leading figures. This year will see Egypt as a platinum sponsor of the event and host of a country session. It will also be participating in the talent session, showcasing the ICT industry’s capability, strong government support and discussing the benefits of Egypt as a global outsourcing location.

The NASSCOM India Leadership Forum will help foster a better understanding about how Brazilian and Indian companies can engage and build a mutually beneficial strategic relationship and leverage new business opportunities.

Robert Janssen, Viaforum, Brazil

This event will provide an opportunity for Egypt to build upon the relationships it has with NASSCOM and leading Indian outsourcing companies and to position itself as a global service delivery location and a gateway especially to the Middle East and Continental European markets, which remain largely untapped. The NASSCOM India Leadership Forum will also provide an opportunity to meet with existing partners and to build relationships with potential partners and investors.

In the recent years, Egypt has spurred trade partnerships, particularly in the ICT sector. Currently, Indian direct investment in Egypt totals to USD 800 million in more than 200 Egyptian companies. This has led Egypt to emerge as one of the leading economies in Africa and the Middle East.

Through our participation at this year’s forum, ITIDA is hoping to expand on its existing agreements with NASSCOM and several of India’s leading IT-BPO companies and increase the level of collaboration between the two countries. India has long been the IT-BPO industry’s leading location and Egypt is fast becoming one of the world’s most attractive destinations for global outsourcing. It is also striving to support Indian companies that are themselves looking to outsource IT-BPO services. Egypt is not only well placed to be the next choice of geographic expansion for Indian outsourcing companies, its strategic location also provides an ideal gateway especially to the Middle East and Continental European markets, which remain largely untapped.”

Robert Janssen, Viaforum, Brazil

“The Brazilian Government believes in strong strategic alliances and recognises India’s major role in the IT space, especially the outsourcing sector. It is therefore keen to work with the Indian Government and NASSCOM, to create new ideas and new ways, to build a mutually beneficial relationship, where new aggregated value can be created jointly to benefit customers.

The NASSCOM India Leadership Forum will help foster a better understanding about how Brazilian and Indian companies can engage and build a mutually beneficial strategic relationship and leverage new business opportunities.”

Analyst view

Peter Redshaw, Research Vice President, Gartner: Industry Advisory Services

One modification that will be necessary in light of Satyam’s difficulties is that vendors will have to be more transparent with sharing financial data and corporate structures. We’re already starting to see some Indian IT-BPO companies share more financial data.

Dana Stifler, AMR Research

“Western financial services firms need to cut costs and boost efficiency (and quickly!) so more outsourcing and offshoring is a natural response. But at Gartner, we do see some significant inhibitors including the fact that banks that have been semi-nationalised will find it hard to justify to their new stakeholders (taxpayers and governments) why they are sending jobs abroad after being bailed out at home; regulators and auditors will want greater transparency and reduced operational risk for banking operations; banks themselves will become more risk averse and worry that offshoring will not be as secure, robust or sustainable in future as it used to be. They will need to pick their operating model and sourcing strategy for the new economy (whether that is bringing stuff in-house or going fully offshore) and then move to execute it. The impact on vendors will be complex and diverse but one example is that ‘Lift and Drop’ styles of outsourcing will be replaced by managed services that incorporate utility-type pricing mechanisms and standardised platforms.

Some of the trends that Gartner will be looking out for include:

• A ‘flight to quality’ as banks become more conservative about which IT partners they are prepared to do business with, even if that comes at a small premium in price
• An increased propensity to bundle more forms of outsourcing in one ‘managed services’ deal that supports a whole end-to-end process – including all the IT infrastructure, applications and BPO for a particular function
• An acceleration in the desire and ability to consolidate and standardise the IT platforms used within a bank as cost overrules function.

Smaller players meanwhile will need to convince banks that they are financially viable, well-governed and transparent, have the scale to cope with the enlarged size of many banking groups and are geographically diversified enough to mitigate concerns about delivery risk (i.e. they can continue to deliver services from more than one country).”

Dana Stifler, AMR Research

“The current economic environment means more opportunity for companies that are financially viable and transparent and have a strong wholesale outsourcing capability, that is, they can handle multi-year AO, ITO, BPO engagements. Companies that rely more on staff augmentation, time-and-materials, and/or project-based revenues are more vulnerable to client cut-backs.

Outsourcing was already a preferred business practice for many going into this downturn. Two different kinds of companies drove the market: those under financial duress that needed some quick-hit balance sheet relief and those that used outsourcing as a mindset and strategic lever. The current economic environment forces the hand of the hundreds of companies that fall somewhere in between these two camps. Though we’re currently in something of a freeze-zone on pulling the trigger on very large deals, our data shows continued take-up of outsourcing and use of third-party services, with companies in Europe and the US defaulting toward service provider relationships rather than internal hires.

One modification that will be necessary in light of Satyam’s difficulties is that vendors will have to be more transparent with sharing financial data and corporate structures. We’re already starting to see some Indian IT-BPO companies share more financial data.

We’re especially keen to see what kind of take-up there will be on bundled deals, e.g. infrastructure + applications, applications + BPO (see IBM’s recent deal with Sara Lee). Especially for midmarket buyers of services, this may be the only way they can get the bang for their buck that they’re looking for in this market. We’re also anticipating more take-up of SaaS. Even companies that have standardised on SAP and Oracle are looking seriously at how they can benefit from this model. The smaller and medium sized players in the Indian industry need to rethink their growth strategies and need to be centred on ‘Focus’. Whether we’re talking about homing in on an industry, a business function, or a specific technology area, focus and specialisation will be key. Being a general ADM provider will probably still pay the bills, but it will be difficult to take it to the next level as a general technology services firm.”

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