Leverage the domestic IT opportunity
A new report by Information technology industry consultant garner points out that Indian firms will up IT spending by as much as 13 percent this year. The Indian domestic market is already estimated to worth $9.7 billion. This is an important pointer for IT firms to look at India as a serious revenue generating opportunity. In times when they are troubled by the rising dollar, a squeeze on the price arbitrage model that is the backbone of Indian It exports and a talent crunch that is seriously undermining their ability to execute large projects, the domestic market could come to the rescue. The only problem is that IT firms are not looking seriously at opportunities out of Kochi or Surat instead they continue to look at markets as diverse as Romania and Japan.
This could be a costly error of judgment because multinational firms like IBM and accenture are doing the reverse. They have already cornered an impressive 55 % of the Indian market for IT products and services including big-ticket deals like Bharti’s $1.3 billion outsourcing contract to IBM.
The domestic market is also likely to get an impetuous from e government initiatives launched by center and state governments. According to an estimate by Skoh consultancy a research and consulting firm, in the e governance initiatives by the central and state governments in India are estimated to be worth over 5000 crore by 2008. These are often straight forwards contracts that require, less complexity and product ownership then the international contracts and are therefore far more profitable for the IT firms that undertake these.
Indian forms will do well not to ignore the domestic opportunity. It will need a new strategic orientation to ensure that this market is exploited properly. Indian firms will need to groom a different set of talent that would look at selling within the country. If they do not reorient their marketing strategy that combines global reach with local markets they may see the rug pulled from under their feet by MNC firms in their home turf. That would certainly be an ironic outcome along with a costly mistake.
A new report by Information technology industry consultant garner points out that Indian firms will up IT spending by as much as 13 percent this year. The Indian domestic market is already estimated to worth $9.7 billion. This is an important pointer for IT firms to look at India as a serious revenue generating opportunity. In times when they are troubled by the rising dollar, a squeeze on the price arbitrage model that is the backbone of Indian It exports and a talent crunch that is seriously undermining their ability to execute large projects, the domestic market could come to the rescue. The only problem is that IT firms are not looking seriously at opportunities out of Kochi or Surat instead they continue to look at markets as diverse as Romania and Japan.
This could be a costly error of judgment because multinational firms like IBM and accenture are doing the reverse. They have already cornered an impressive 55 % of the Indian market for IT products and services including big-ticket deals like Bharti’s $1.3 billion outsourcing contract to IBM.
The domestic market is also likely to get an impetuous from e government initiatives launched by center and state governments. According to an estimate by Skoh consultancy a research and consulting firm, in the e governance initiatives by the central and state governments in India are estimated to be worth over 5000 crore by 2008. These are often straight forwards contracts that require, less complexity and product ownership then the international contracts and are therefore far more profitable for the IT firms that undertake these.
Indian forms will do well not to ignore the domestic opportunity. It will need a new strategic orientation to ensure that this market is exploited properly. Indian firms will need to groom a different set of talent that would look at selling within the country. If they do not reorient their marketing strategy that combines global reach with local markets they may see the rug pulled from under their feet by MNC firms in their home turf. That would certainly be an ironic outcome along with a costly mistake.
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