Business Daily from THE HINDU group of publications
Saturday, Dec 09, 2006
Info-Tech - Business Models
Road ahead Infosys focus on creating IP-based solutions Wipro looking at new ways to cut costs Tech-centric offerings the way forward for TCS
Bangalore , Dec 8
Aiming to make it big in the global IT services arena, three top Indian vendors are scripting divergent growth strategies radically different from the earlier widely used cost arbitrage.
"TCS, Infosys and Wipro are at a strategy crossroads now," said Mr Sudin Apte, Senior Analyst and Country Head (India), Forrester Research.
"From a stage of undifferentiated, low-cost sales proposition three years ago, these firms have traversed to a point of inflection and have built their own strategies - in a manner very different from others."
Mr Apte was part of the Forrester team that recently interviewed CEOs and top management of these top firms to assess growth strategies.
"Infosys, continuing to leverage the cost model, is aiming to play big game of global scale head on with the likes of Accenture and IBM on their own turf and rules," Mr Apte said.
Infosys is creating intellectual property (IP)-based solutions and frameworks, which should help tread the non-linear growth path wherein the revenues are not directly linked to the number of hires.
The company currently derives 8-10 per cent of its revenues from IP-based solution offerings, he said.
Further, the company plans to scale its global talent pool by hiring locally in various markets and leverage global leadership to break into newer accounts, he added.
Wipro is continuing with its core differentiation based on new ways to cut costs through productivity boosters and deploying low-cost labour.
The company, which believes in running software development in factory style, is of the opinion that deskilling of services would broaden the potential recruitment pool, thereby lowering costs.
Wipro in recent years has absorbed some 7,000 science graduates.
On the other hand, TCS, with its vast talent pool, enhanced global delivery footprint and a relatively larger client base, is building on its track record to demonstrate capabilities mainly through technology-centric offerings, which Mr Apte said was a sort of safe middle way compared to Infosys and Wipro.
TCS is looking beyond the US and UK markets for growth and beyond India for skills to emerge as a global player.
"Ironically, each of the three vendors has hit on some, but not all, of the elements of what it will take to be successful in the long run," he said.
"Wipro needs to evaluate other options for non-linear growth such as IP-based solution framework and not dilute its focus in its strength areas of R&D services and infrastructure management."
He added: "TCS needs to add more marketing flair stating clear articulation of its value proposition and benefits. We recommend that Infosys build a strategy around its core competency of process superiority, efficiency, and the offer of better IT and business value for US companies."
According to Mr Apte, the clear differentiation and articulation based on the new strategies would make the top three Indian vendors even more compelling in competitive situations.
"It puts more pressure on tier II players to focus and differentiate in order to solicit new business as well as survive the vendor consolidation," he said.
"Divergent positioning and distinct approaches makes it easier for customers to identify best-suited firm based on the type of work. For example, business-centric buyers can approach Infosys, technology and cost-focused firms can shortlist Wipro, while technology-focused firms with global rollout requirements can explore TCS."
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line