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International Business Machines Corp (IBM) has been fairly successful in the Indian domestic market, which contributes about $1.5 billion to its revenues, according to industry analysts (IBM does not give its India revenue figure). At a time when the Indian economy isn’t faring well and business sentiment is low, ‘Big Blue’ says it is not seeing any significant change in the market. Vanitha Narayanan, managing director for India and South Asia, in an interview with Bibhu Ranjan Mishra, says Indian businesses continue to invest in technologies, though the ways and pace of investments may have changed to an extent. Edited excerpts:
Large Indian enterprises are no longer spending as actively as they did in the early 2000s. The telecom and financial services sectors, huge spenders on technology in India, have hardly carried out any large technology implementation of late. Isn’t this a challenge for IBM, which works with most leading companies in India?
Every challenge is an opportunity. It all depends on how we package our value proposition in terms of solving clients’ problems and help them maintain growth momentum, even in uncertain times. The growth may come from a variety of ways. To remain efficient and cost-effective, they have been constantly looking at leveraging technology. Today, clients are mostly focused on becoming cost-effective for one particular function. The next level of value from them would be applying the lesson learnt from that function across the organisation — that’s where I believe our opportunities lie.
What would be your strategy to address the changing needs of Indian customers?
The interesting thing about the Indian market is it is not just one market, but many markets. So, the moment you say you have want to address this market in one particular way, you would miss the opportunity. That’s where we have a huge advantage, as we bring in our global best practices, tools & technologies, solutions and cross-sectoral knowledge to solve the problems of clients. It is really about combining what we have in our portfolio and being able to structure it.
Sectors such as banking, financial services and insurance, telecom and manufacturing have already made huge investments in technology and automation. This has led to fear the next wave of tech spending in India may happen in bits and pieces and clients may take such decisions at their discretion.
Yes and no. Consider the case of a client in the financial services business. The client may have already spent on core banking or branch automation. Now, the same client is figuring how to be relevant to clients. Because businesses today operate in a hyper-competitive market, innovation is always at the top of their minds.
How much has the current slowdown in the Indian economy hit your business?
Opportunities for growth in India are still very positive. India continues to be a growth story for us, though the growth varies from segment to segment. The clients are looking at how to differentiate themselves, which means whatever ways they are looking at have to have a very good business case within their company. Nobody wants to be so conservative that they miss the opportunities.
They may be investing differently or the pace of investment may not happen at a hyper pace, but they don’t want to stop investment. This means the growth may not be so direct. I don’t see this phase as a real challenge.
In terms of capacity expansion and hiring, most large technology companies are going slowly. Considering you are one of the large employers in India, what is your strategy?
The thing is at any point in time, the capabilities and capacity expansion are aligned to market conditions. It is a hyper competitive global model; no one operates in a vacuum. You have to constantly better the processes, etc. We continue to add new capabilities to our portfolio. For us, scaling is not the primary focus; skilling is.
