Indian IT Enterprises & emphasis on Infy

Jam today or Jam tomorrow

Today’s brew is for Indian IT Companies, with special emphasis on Infy to improvise.
Brew Date: 11th June 2015
Type: Served Hot – Redefine and Transform brew.

This Brew is different from the rest in series of analyzing individual organizations, where in this brew; the analysis is more on Indian IT industry. Cos of homogeneity of the business models and offerings of entire IT industry, it makes sense to have them served in a single brew. The Brew has as well covered Infosys (one of the leading Indian IT org) in a small bit, cos of its attempt to create a differentiation (and along the lines recommending them a few steps), however The Brew attempts to foresee the shared fate that might draw upon the Indian diaspora, urging them to be more mindful of the path to choose, to reach a destination vis a vis the existing No path, No destination philosophy.

To understand the business model of Infosys, check out the following links:

The Brew will analyze Infosys (holds true for Indian IT industry on the whole as well) on the following points:

a)    Business Analysis:

1)   Innovation Cycle and Technology Cycle

The current wave of consumerism is backed typically by 2 strong forces, Innovation and Technology. Not to be used interchangeably, they are distinct aspects of driving the change. The catch here is both these factors, at the moment are thriving and feeding off each other, which in a way creates a chaotic, disruptive and uncertain environment for all the players who are covered in the gambit of innovation and tech.

The point that The Brew wants to drive is that this Consumeristic revolution has been created by the Consumer and changed Consumer demands, and amplified with the new advent of Open Source innovation model, Effectively, meaning apart from very few organizations, most of the enterprises are bystanders to it.

Precisely, the power to drive technology and innovation has been democratized and diffused (until now it was majorly in the hands of enterprises, which is why the rate of change was controlled and targeted) and hence comprehending, contemplating and being at par with the Rate of change of each of these factors will certainly be a challenge.

2)   Neither of Innovation or Technology, is a Competence of Indian IT Companies:
To agree with the above fact will be a gross understatement, but the veracity of it has been tested time and again. And it’s not difficult to infer the same for global IT companies given that they occupied a small piece of driving innovation in information technology, designing, innovating and delivering offerings to drive IT, forming smaller subsets of larger areas of innovation and technology.  Even the Global players were caught off-guard, but the positive for them is their adaptability and responsiveness to these spheres.

The Concern however lies for the Indian segment where Technology and Innovation are Greek and Latin, Infact we are yet to discover the spoken word, and invention of language is still a distant future. The Indian side is more of an Enabler of Predictive IT needs to the established players with static business models (being a simple inference but apt as well, if the business model has not changed, then both, Technology, which betters the Offerings and IT, which betters and enhances the delivery and experience of offerings, have as well not changed) which by their inertia and obsolescence may risk entering the oblivion club.

Servicing these Establishments, though is a definite risk, but depending on them for the growth of Indian IT is certainly a no – brainer, considering the changed equation. (For that matter, Infy’s predicament comes to sight, where, of USD 20 Billion of its 2020 projections, 16 will come from traditional model of enabling IT to these players)

Being said that, the situation does not seem that grim, considering that the disruption has actually availed a level playing field to all the players. The tech advantage most of the established players had in the mature business horizons has been nullified, and gates open to all.

3)   Disruptions at both the end – Core and Non – Core – Domains and Horizontals, and in both, the Orgs lack – Tech and Startups
This is where it get interesting after all the extrapolations and inferences from above, the front runners of drivers and enablers of this revolution are the Startups, who not only to underplay these waves but as well seems to ride the tide well. This gets us to infer that at least 2 things, The Startups have established a head start in the advent of Tech and Innovation (making them more aligned to Consumer needs and Solutions), and they will effectively go for all the Core and established areas of the existing players to disrupt and drive this advantage.

Effectively, with the status quo and the legacy costs to transform, the race to compete is not between organizations and startups, its more amongst the startups who can afford fresh beginnings while exploiting the systemic advantage of Tech – Innov.

From Indian Scenario, the relevance is Startups will disrupt the Core models of the enterprises that get serviced by Indian IT, and as well, the Core models of Indian enterprises are as well at risk, given that the majority of the players have lost an advantage and the scores have been resetted to love all (J).

4)   Who blinks first? IT Folks or Companies:
Given that core businesses of enterprises are certainly at risk, its certain that Enterprises will look to build an advantage in tech + innovation fields, so should IT companies. The IT folks have for most of the time been a follower of system level innovation and transformation. Being said that, here is a chance to establish an advantage to serve the aspiration of being a Global player with a progressive forward mindset.
The IT companies, just like Non – IT folks will as well have to replicate the Startup trend of going deep and forward in the realms of Innovation and Technology, to afford a level playing competitive field. That’s perhaps the only way for all the players to get an earlier status quo and being relevant in the consumer value chain.

5)   Structural & Systemic Issues – Rate of Change of Environment > Rate of Internal Change > Rate of change of Business:

To add to the disruptions and uncertainty, the Indian players are caught between keeping a balance in internal and as well external factor. The External being the Rate of Change (Highest at the Consumer End, with low responsiveness from Industry and Internal Change models), and Internal being, ensuring the continuity of delivery of services on a static business model in light of factors of Manpower, rising costs and competitiveness.

6)   For Infy and other IT Cos. -
From the recent buildups, here are some thoughts from The Brew to improvise and enhance their business models:
a) For IT companies: It’s a ripe time to create and establish a fresh advantage, which will keep churning, and driving change in the times to come. The Cost of Trying Innovations has been reduced by a great extent, and so is the Cost of Failure (as well, it can always be cross utilized to other practices, processes or offerings)

7)   The IT Companies till now has not been the driver of innovation in consumer trends, and this seems to be the chance to link the business models directly to consumers leveraging IT by Creating Platforms, Consumer Solutions Enabled by IT, and to delink the Innovation model from Business Models allowing them to place big bets on Innovation, with the factors to create an advantage being available and accessible to all.

b) For Infosys: From the recent announcements from the Infy board, a couple of things come to light:
a) The Innovation model of Infy being dysfunctional from its Business Model and from the Consumer Model. From the Innovation fund setup by Infy (details on, its clear and apt that Company wants to play on the concept of borrowed innovation, implying its dysfunctional internal innovation model, with no intention of fixing it organically and relying on the startups to fuel its innovation model. The Brew recommends 2 things to Infy, to not create an advantage in its business model but as well sustaining it. Triggering and Institutionalizing the Process of Innovation (at all levels, Technology, IT, practices, processes and solutions) internally, all across, on the framework of key drivers of technology, along with delinking its Innovation fund from its business model to enable a Non – Linear explorations in tech innovations to enable the possibilities of further growth.

Infy will have to map their innovation model to the driver of Consumer needs to make some meaningful fruition and value addition to itself and industry

b) The inertia of the current business model reflected in the projections of Usd 20 billion in 2020 financials, where the traditional model will contribute for 16 bn, innovation and new acquisitions will account for 2 bn each.

Extending Point a, there will have to be a conscious shift in the balance of their current business mix, with high focus on adapting and building the platform and framework for new emerging technologies, if it wants to disrupt the IT space, reclaiming its erstwhile status of the bellwether of not Indian IT but of overall IT industry.

If Infy pursues on the current trajectory of its business mix (and in line with its 2020 intentions), it will end up losing potential of harnessing 2 essential advantages: Primarily, losing the creation of IT advantage which can trigger an self disruption, and that’s the only certain way, by which Infy can climb up the value chain and not only be relevant, but also be a driver of the trends and secondly, enabling a differentiation with its competitors, not only in value positioning but as well in its business model. Precisely, Infy will have to create an enterprise for future for itself to be more relevant to both, Clients and to End Consumers.

Not to sound political, but a nation which is witnessing an IT revolution of all means, its time that its not only driven by the countrymen, but as well enabled, created and scripted by our folks.