'Indian IT will hit $300 bn by 2020, with economic recovery'

BANGALORE, INDIA: After taking up the mantle from N. Chandrasekaran, managing director and chief executive officer of TCS, as the new chairman of industry body NASSCOM on April 8, Mindtree's managing director and chief executive officer, Krishnakumar Natarajan is more busy than ever.

Apart from his CEO duties for his organization, he has the additional onus now to shepherd the whole industry through his new role at the body that represents the $100 billion Indian IT-BPO industry.

In an exclusive e-mail interaction with CIOL, KK, as he is fondly addressed, answers our queries on the future roadmap for NASSCOM (National Association of Software and Services Companies).

CIOL: With the global economic outlook continuing to be dull, what is in store for the industry, especially for Indian mid-tier IT companies, in the new financial year (FY2013-14)?

KK: Based on increased technology budgets of companies, NASSCOM has estimated that the current $108 billion industry will maintain growth of 12-14 per cent for the fiscal year 2013-14. This growth will be driven by technology megatrends of SMAC (Social, Mobility, Analytics and Cloud); opportunities across emerging verticals and geographies, new business models and IP-led growth. Customers are increasingly focused on transformation, time to market and cost efficiencies, and are partnering with companies in India to deliver solutions. As customers look for expertise, mid-tier companies that are multi-niche specialists will gain from the demand momentum

Issues in the global economic environment, volatility of the currency, policy issues in the country are some of the factors that do create uncertainty in the current context.

CIOL: Recently, the expert committee, led by Narayana Murthy, suggested NASSCOM to realign its priorities to have a futuristic vision as well as set a target of $300 billion aggregate revenues for the industry by 2020. How feasible would that be for the industry to achieve that kind of growth?

KK: The global reputation of Indian IT companies has improved significantly, with it being regarded as a force to be reckoned with. The Indian economy is evolving at a rapid pace and keeping this in mind, it is our aspiration is to build a $300 billion IT industry by 2020. With the world economy on the road to recovery, newer opportunities are presenting themselves, which will be the deciding factor for all companies. New market segments like healthcare, mobile & Internet and emerging markets like Japan, Africa and Scandinavia hold the key for future growth.

As an industry, we are realigning our focus to expand the scope of opportunities, looking at broader markets and the evolving nature of technology. It is important that we as an industry look at these new avenues for growth and tap new geographies to achieve our common goal. Opportunities like software products, Internet and mobile, and disruptive technologies like SMAC will drive the next phase of incremental growth and NASSCOM is well positioned to leverage these opportunities.

Over the years, the Indian BPO industry has also evolved from efficiency to effectiveness, while focusing on re-engineering themselves in order to deliver transformational impact to customers. Witnessing the industry's exceptional performance, NASSCOM is driving the rebranding of the BPO industry as the Business Processing Management (BPM) industry.

NASSCOM believes firmly that the Indian BPM industry's current maturity level has gone up the value chain, managing entire businesses processes of clients and not just outsourcing them. The re-branding of the industry will give it the identity of being a full-service value provider rather than an industry that plays only in the lower-end of the services spectrum.

At the same time, the Indian industry needs to leverage the low-end skills available in other emerging destinations, while itself moving up the value chain. The BPM model will continue to evolve and drive the sector, which has since its inception in the early 1995, been tuned to a dynamic global business landscape.

Another important factor to consider is the need to encourage more start-ups in India, as they hold the key for a sustainable and inclusive growth model. To achieve this, NASSCOM, in association with our industry partners, has started the 10,000 Start-ups program, which aims at creating 10,000 IT start-ups in India in the next 10 years.

Start-ups today are amongst the most critical pillars of the Indian IT industry representing a huge opportunity for India to retain its competitive advantage. Over the past few years, start-ups have contributed to the industry by building niche products and services and tapping non-core markets. To sustain the overall economic growth, it is imperative to have more entrepreneurs in the country, who will transform the landscape and would play a vital role in opening new opportunities for the industry. The NASSCOM 10,000 IT Start-ups program will enable thousands of entrepreneurs to start up and grow their businesses and in the process, propel India's economy.

CIOL: Which key areas do you plan to focus on in your new capacity?

KK: It is of utmost importance that we leverage the new opportunities in the industry to deliver to services and products to sustain the growth momentum. Hence, the key focus areas for us will be:

• Expanding our outreach to new geographies
• Expanding focus on industry segments based on size and potential and position India as an innovative solution provider and preferred destination
• Helping develop capabilities in next generation technologies and platforms in partnership with the industry
• Building new markets and customer segments & thrust on skill development and domain
• Creating collaborative program to evangelize, engage and support incubation to build entrepreneurial ecosystem in India
• Build an ecosystem to develop successful Global Software product and Internet businesses

CIOL: What supplementary activities NASSCOM would take up to guide the industry to greater heights?

KK: The Indian IT-BPM industry has witnessed a consistent rise through the years. It has exhibited rapid evolution in terms of expanding vertical and geographic markets, attracted new customer segments, transformed from technology providers to strategic business partners, and offering a considerably wider spectrum of services over the years.

What is emerging as a crucial differentiator going forward is the Indian industry's ability to deliver enterprising solutions - IP-driven, multi-platform and productized services. Nasscom will catalyze action on this.

Also, at NASSCOM, we truly believe that 'small is the next big' for the industry and we will continue to focus even more on nurturing the Indian start-up ecosystem.

We have several initiatives that are aimed at evangelizing start-ups and SMBs in India. NASSCOM's Emerge is aimed at supporting SMEs and enables them to interact and work together to enhance their skills and industry know-how. Additionally, the companies can seek the help of industry experts.

The NASSCOM Emerge 50 Awards program annually identifies, showcases and supports top-50 high-potential emerging companies that are redefining the benchmarks of excellence for the IT industry.

Our 10,000 startups initiative has received a very encouraging response from the start-up community. Start-ups from across India can now apply to the programme through the website and aspire to benefit from a joint engagement with some of the best incubators and accelerators in India. With a strong focus on innovation, NASSCOM remains committed to build a vibrant tech start-up ecosystem in India to sustain this momentum.

The Indian IT-BPM industry has witnessed a consistent rise through the years. It has exhibited rapid evolution in terms of expanding vertical and geographic markets, attracted new customer segments, transformed from technology providers to strategic business partners, and offering a considerably wider spectrum of services over the years.

NASSCOM will continue to support the industry to expand beyond core markets and explore opportunities in emerging geographies and verticals, while strengthening its position in traditional markets and verticals.