ChannelWorld.in, Strategic insights for solution providers

Cavale: No, that is not really true. We look at business transformational projects irrespective of whether they are with the government or the private sector. What we tend to avoid are projects that do not have a degree of impact in transformation, or which do not have the ability of building Intellectual Property (IP) around it. To explain, we tied up with a major telecom service provider to do what we call as mobile banking. In terms of revenues, it was not a very big number, but in terms of bringing mobile commerce to the common man, it had significant impact, and we consider that transformational. If a project or engagement is just run of the mill, I am not saying we will not respond, but it will be very exciting for us.

Cavale: I would venture to play a 3–5 year game; India is a market where you have aim long-term. If you look at the GDP of the world, which is essentially the OECD and the non-OECD countries, this is going to be a very significant decade. Right now, the GDP distribution is about 65-35, but by around 2020, the GDP contribution ratio is likely to become around 50-50.

As the Dickensian phrase goes, it will be the best of times; it will be the worst of times. Factor A: There is going to be a recession, which will accelerate the trend of the purchase power moving to the non-OECD countries. Factor B: People are look at different means of doing business. From an IT perspective, what is happening is people are asking, “Why should I own a power plant to have power?” So, if you take a look at the kind of deals we are signing on, be it the Income Tax department deal, e-TDS and mobile commerce, these deals will be pay-by-the-drink. Our revenues will depend on our ability to sustain and make improvements. Going forward in India, we will look at fine-tuning what we have started in terms of Build-Own-Operate projects, look at new areas of growth and also look at places where the next 3–5 years will be.

Cavale:There are five areas of growth – smart grids, digital oil fields, mobile commerce, e-governance and inclusivity/sustainability. Some time back, we thought we might have to relook our strategy in some of the areas. We were watching the reforms in retail. Since no big change has happened as far as FDI goes, we prefer to retain these five areas with a macro economy perspective.

Cavale:I wouldn’t call it product development. We always work with clients on solution development. For example, banking as such has yet not come down to the lowest denominator, in terms of reach, despite the nationalization efforts. So, today, if mobile commerce has to take off, then we may have to tie up strategically with telcos; they will be the carrier to go to the market. Similarly, with smart grids – this may be in the form of generation, transmission or distribution – Infosys would have a good play, but it would not be sufficient and we would have to tie up with electric equipment manufacturers and distribution companies to create the whole solution. So, increasingly, we are going to get into a space where we will have to partner, and this includes even with competition. We call it co-opetition.

Cavale: Yes, clients now tend to prefer that consultants do not come piecemeal. There is a huge distinction between the Indian and the Western markets. The latter has had 7–8 decades of established IT culture; organizations have full-fledged IT departments and a CTO; work goes out to people like us and comes back in components; and then the solution integrated by the internal IT departments depending on their requirement. In India, the IT growth has been exponential, so the IT is more likely to be managed by the CEO himself. So, there is a demand for an end-to-end solution without the client having to put his head into each and every component. So, there will be more co-operation, and the companies who master this will win the game. We will be working with those who have similar styles of functioning and values, and can bring complementary skills to the table.

Cavale: From an India business perspective, they won’t be necessary. Co-operation works out better. You would see partnerships, rather than acquisitions as such.

Cavale: We expect our domestic business to continue to grow and maintain a healthy CAGR. We intend pushing the pedal on growth in terms of transformational IP-oriented projects. In smart grids, we are working with state governments to engage in power projects that would help cut down losses in power consumption right down to the consumer level. So also with our other growth areas, including the ones in social inclusivity, where we are yet to reach the peak of our growth and realize our full potential.

Cavale: As a democracy, things become slow since some vested interests may not be quick to respond to the kind of transparency that digitization of administrative processes might bring. The IT Public Services Bill will be a unique piece of legislation if passed by the Lok Sabha.

Cavale: It is time to develop differentiators and IP, and to deliver well. We are in the early stages of the journey, and I believe we have a lot of ground to cover.