Monday, October 18, 2010


While in the past, cost may have been the most important consideration, these days competing in the IT industry locally and globally is becoming more complex

The IT company that adopts this receptive attitude towards these types of changes and that can effectively integrate them in the company’s branding folio will have a greater success rate in both the Indian and global markets. In 2009 for instance, major Indian players TCS and Wipro reported that several clients had approached them for renegotiations of existing, long-term (5 to 7 years) contracts, citing financial difficulties brought about by the crisis as primary reasons for requested pricing discounts and shortened contract duration. Had these service providers refused the appeals of the clients, multi-million dollar deals may have failed altogether due to the inability of their clients to continue payments. Beyond the financial aspects, a resulting hit on corporate image would have also been experienced. Infosys gives due credit to its corporate flexibility as a foundation for its success in the IT space. According to one of its global managers, Infosys owes much its success to its willingness to make working compromises with clients. The company would rather lower its profit margin and accommodate the demands of a client than lose the client’s confidence altogether. This approach has apparently worked for Infosys – it maintains a positive track record for repeat business at 97%.

The custom-fit approach is also driving IT companies to further develop domain expertise. Products and services are developed with the objective of providing solutions to specific needs of industry verticals. Current industry dynamics require Indian IT companies to bank on their distinct value propositions as their unique selling point. These dynamics prove that the industry is evolving.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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