Face To Face with Ramalinga Raju

Q: How would you define NASSCOM's vision today? How is it different from the time the industry set off on its growth path?
A: When NASSCOM first set out on its journey, its agenda was to provide a platform for the emerging and nascent IT software and services sector. It had to play the role of a nurturing mentor and kick-start the growth of a completely new market. Today, however, the software and services segment has achieved maturity and gained global stature and leadership. The ITES-BPO industry is also growing at a rapid clip. In a sense, the nurturing role is over and NASSCOM is now looking at extending its area of focus to include the entire eco-system that supports innovation and the growth of the Indian ICT industry. Clearly, creating a conducive environment goes beyond traditional areas of strength such as vision, mission, innovation and operational excellence. It is increasingly about thought leadership, that shapes the mind of society and it is about the valuable aspect of funding, that helps incubate new, fresh and path-breaking ideas that have the potential to change the world.

Q: Where do you see the maximum growth happening within the IT-ITES sectors in the years ahead?
A: While India will continue to see significant and solid growth in its traditional area of strength-the IT services segment-the ITES-BPO sector will also witness rapid growth. The ITES-BPO market is experiencing high levels of activity-both onshore as well as offshore. Last year we saw players move up the value-chain to offer higher-end research and analytics, engineering and product development services to their customers. Companies continue to ramp-up their operations, with the industry adding new jobs on a daily basis.

Q: What do you believe will be the key catalyst for the growth of the Indian IT-ITES industries going forward?
A: The way I see it, the next phase of evolution of the Indian IT-ITES industries will be led by innovation, which will pervade almost all aspects of these segments. Companies will focus on innovation to create significant differentiators in the global markets. The Indian IT-ITES sectors will build an eco-system for innovation in order to sustain its leadership in these domains as well as stave off competition from emerging, alternate offshore outsourcing destinations.
The latest NASSCOM-McKinsey Study 2005 indicates that India has the potential to accelerate export growth and achieve an additional US$ 15-20 billion in revenues by 2010, provided its places its chips on innovation. Innovation, in fact, has to happen in the area of products, verticalization strategies, learning, industry-academia collaborations and funding.
The good news is that the Indian IT-ITES sectors are already set on the path of innovation. A growing number of organizations have embarked on journey of innovation and are looking afresh at their product development strategies, their Customer Responsiveness initiatives, their marketing and brand building, their HR thrust and their key business processes. The trend will continue to gain momentum, helping the Indian IT-ITES industries move up the innovation value chain!

Q: How vital are issues such as Information Security in the emerging environment?
A: Information security is a burning issue for the Indian IT-ITES sectors, one that will determine its continued success in the global markets. Information Security, a key fallout of the cyber era, is taking center stage and will impact the way companies and even countries conduct online business with one another.
The importance of Information Security in the Internet-centric global environment cannot be underestimated. For Indian IT-ITES organizations, that are part of a 24*7 global supply chain, the next barrier, the next biggest challenge is that of Information Security. Clearly, as Indian companies are handling more and more high-end work and dealing with sensitive data, it is becoming essential to proactively adopt best practices in security and integrate the concept into the normal business workings of every company.
The absence of Information Security strategies at both the Government and industry-levels would greatly impact ICT trade between India and the rest of the world. The reality is that in this world of global IT, where data is being passed around the world, the fear of public disclosure of sensitive information is very high. Increased incidences of information security breaches can threaten the very fabric of this business model. Indian IT-ITES companies need to watch out for this.

Q: What about the domestic market?
A: The domestic IT market too is coming into its own and witnessing a high degree of M&A activity, involving some of the key players in the market. Increasing IT usage and adoption within the country is enhancing competitiveness of the Indian economy and the user community. Indian businesses, that are using IT, as an enabler, are becoming increasingly competitive in the global arena.
Indian IT service providers are also stepping up their focus on the domestic market. Outsourcing is gradually emerging on the horizon, with the user segment in the country outsourcing parts or the entire IT infrastructure to specialized vendors. While there is increased IT adoption by user organizations in the country, both at an operational and advanced level, the ongoing phase of investment by the industry will need a gestation period to exhibit its full potential and achieve the maximum Return on Investment. The Government is also expected to become a major user of IT through its various e-governance programs. A favorable policy and taxation regime will provide a fillip to IT usage in India, resulting in benefits of efficiency, productivity and employment accruing to the economy.