Chopped budgets a real cut?

Chopped budgets, a real cut?

Cost cutting is a word hanging everywhere, be it inside a vendor or in a CIO's wallet. Here are some fresh views

Pratima Harigunani

Monday, April 27, 2009

PUNE, INDIA: So yes, slowdown has snowballed into cost cuts all around. But it's important to interpret the cuts smartly, with an eye into the future.

For instance, an OPD major like GlobalLogic sees the cuts as a sign of bigger appetite ahead. When business steps out of the current lull, there will be need of technology and IT at a transformational level.

"CIOs will ask for something that can help them leapfrog and not just a step up. ISVs, hence, are getting silently ready to plan for a leapfrog scenario while everyone thinks it's time for cut on R&D and product development," opines Shashank Samant, president of GlobalLogic.

Kishor Wikhe, senior vice president, head - Pune Operations and Enterprise Business Technology Unit, Symphony Services too has a different take on the impact of cost-cutting on innovation, R&D areas for product companies.

"Everyone is being tactical and focusing on cost optimization rather than investments. When it comes to product companies, if they do not innovate and work on new features and emerging competitive landscape, they would be out. That’s why at Symphony, we have inculcated an innovation culture scenario and the focus is on the best IP value to the client."

As he also highlights, most ISVs and product companies are focusing on that aspect. GlobalLogic, an OPD specialist with a release score card of 2,000 software products, including more than 300 major products in the last 12 months, claims that while it has witnessed tremendous growth over the years across geographies, this time despite the recession, it continues to witness the momentum in their business.

"With the tight R&D spends of today, optimization is a greater need and so is for innovative product ideas. At Symphony we have grabbed this wave since some years back. We have a score of 33 patents so far, 5000 product ideas and 120 white papers. Our focus is beyond that. It’s about implementing those product ideas and adding more revenue to our clients. Most IPs have revenue upside."

As to the view on the other side of the fence, doctors make the worst patients as very interestingly Arun Nathani, CMD, Cybage, puts in as he talks on cost efficiency.

“Recession is both a white and black force. It’s a good time to see how IT companies have been managing the cost and efficiency part, which is what they, ironically sell to their customers. Doctors make the worst patients. This applies so well for IT companies,” he observes.

“There are so many companies that have spent so much time positioning themselves well outside, that they forgot the real story inside. At Cybage, we have always tried to do balance both the sides. It’s not just about how the world looks at you that matters.

“It’s more important to make sure that one’s internal focus justifies the claims we make outside, be it to our clients, our rivals or to media. Internal focus and maintaining efficiency is not as glamorous as the outside stuff, especially when everything is going well. It’s a tedious thing, but all the same, it is very very important, be it a good time or a bad time," adds Nathani.

Nathani opines that the biggest problem with IT companies is the lack of attention on the internal focus. “If you are here to optimize stuff for the world, for the clients, first do it for yourself. IT is supposed to increase productivity, but how much of that is applied inwards? There’s more to being a good IT player than catching the customer’s mindshare and playing the branding game.”

At Cybage, as he cites, productivity is not something that has received a sudden focus now. “It’s been a routine thing for us always.”

©CIOL Bureau