The top tier voices its different fears
Joint CEO, Wipro
Is this Indian IT services’ biggest challenge?
Yes, by a long way. What is the feedback from clients? They are talking about cost pressures and the need to rationalise their IT budgets. Many are willing to talk about fixed price and transaction-based deals.
How is hiring going to be impacted in the year ahead?
We will fulfil our commitments to engineering college students and also make lateral hires.
What are the strategies to battle the expected decline in growth and profitability?
We can try to improve our profitability through better utilisation of resources, automation of certain processes and the use of shared services centres across customers.
CEO, HCL Tech
Is this Indian IT services’ biggest challenge?
The real challenge will come from 2010-11 onwards.
What is the feedback from clients?
Clients want us to cut costs.... One of our largest customers has slowed down dramatically. But some sense of optimism is returning.
How is hiring going to be impacted this year?
We have moved to “Just-In-Time” hiring, because we feel that training and bench costs was one of the most inefficient areas in Indian IT. That’s why we reduced the numbers of freshers.... We have not laid off staff because we know we will need the people later, when things turn.
What are the strategies to battle the expected decline in growth and profitability?
In 2007, we took the call to focus less on discrete services where there are multiple vendors and look more at integrated services offering. The Axon acquisition was part of that philosophy and it is paying off. We see a lot of growth in small million-dollar deals.
President & Managing Director, Cognizant
Is this Indian IT services’ biggest challenge?
These are indeed among the most challenging times.
What is the feedback from clients?
Clients are re-thinking business priorities and re-prioritizing their technology and related spending. In response to the economic cycle, companies are increasingly resorting to global sourcing to rationalise costs. We continue to see an environment of belt-tightening and/or reductions around IT budgets.
How is hiring going to be impacted in the year ahead?
We do not provide guidance on hiring. In the fourth quarter of 2008 (October-December), Cognizant added a net of 2,200 professionals.
What are the strategies to battle the expected decline in growth and profitability?
We will use the current environment as an opportunity to strengthen our business. Overall, the market for our services is very active. Our most impressive growth has come from cost containment services such as Application Maintenance, IT Infrastructure Services and Business and Knowledge Process Outsourcing.
COO & Executive Director, TCS
Is this Indian IT services’ biggest challenge?
This is a time of unprecedented uncertainty. We hope this ends in 2009.
What is the feedback from clients?
Forty per cent of our top 100 clients have reported a fall in revenues and more than 55 per cent have reported a fall in profits. They have a serious cost management plan in mind.
How is hiring going to be impacted in the year ahead?
There is a freeze on all recruitment. Lateral hires will for be specific skillsets and domain knowledge. TCS plans to recruit 250 freshers for its global development centre in Cincinnati in the US.
What are the strategies to battle the expected decline in growth and profitability?
We have initiated a cost management programme. TCS is trying to optimise the implementation of projects from the employee perspective. We are bringing more efficiency in projects and value addition to our customers through our IP assets. Our employee costs came down by Rs 121 crore last quarter.
CEO & MD, Infosys
Is this Indian IT services’ biggest challenge?
This is perhaps the first time the industry will see zero or even negative growth.
What is the feedback from clients?
Our clients are focussed on cutting costs and conserving capital. They want lower prices, smaller volumes and will also begin consolidating their vendors.
How is hiring going to be impacted in the year ahead?
We will fulfil our commitments to fresh graduates and also hire around 2,000 people laterally. We don’t expect to hire in the same number as two years ago or even last year.
What are the strategies to battle the expected decline in growth and profitability?
We have multiple levers to cut employee costs. We have also begun to use technology platforms to increase our productivity per employee. Finally, we are slowly but surely making the transition to transaction-based pricing models.
