15 Dec 2008 Bangalore:The chief of India’s biggest software services exporter couldn’t have summed up the environment any simpler: “Overall, things are in bad shape right now.” CEO and managing director of the $5.7 billion Tata Consultancy Services, S. Ramadorai, wouldn’t hazard a guess on when the tech slump is likely to ebb; not would he offer comments on price renegotiations widely believed to be plaguing the Indian IT industry; or for that matter, say whether a downgraded projection of 15 per cent industry growth in fiscal year 2009 suddenly appears optimistic.
Any numbers being talked about are guesses — that’s the most he would say.
“Honestly, no body knows when the tech slump would recede. I don’t want to make any guess because we are living in times that are uncertain. Nobody knows anything. So we have to watch and play it by the day,” Ramadorai says.
The chief executive feels we are living in unpredictable times and “such an event (the collapse of the financial institutions in the US and the matching slowdown) has not happened in anybody’s living memory”.
“The US is in a recession. Europe and UK are in a similar situation. China has slowed down — their exports are suffering. India’s growth has dropped. I think it is impossible to predict what is happening. Consumer demand is very low. All the actions governments are collectively taking are still not yielding the expected demand requirements. Until consumer sentiments change, things will not be easier. We have to just hang in and focus on what we are doing,” he says.
Nevertheless, he does expect “positives” to emerge out of the current slump. From the employer perspective, employee retention rates are now much better with a less fluid job market.
“People are looking at upgrading their professional well being. They may go for masters and PHD programmes. They may attend a lot more of training and will look to create longterm intellectual capabilities,” Ramadorai believes.
Customers, he says, will look at cost optimisation — as an industry, Indians can relate to it very effectively and creatively.
“Finally, organisations have to look at internal ways of doing things. You may re-invent business models for the future and look at it in an optimistic manner rather than get worried about whether I am going to be in business or not,” he says.
The current environment is widely expected to stimulate two more imperatives: Indian IT services firms may focus more on the domestic market while exploring mergers and acquisitions considering favourable valuations. However, Ramadorai believes it is too early to say that consolidation will become a rule — “People want to retain cash and are not willing to spend much. TCS will focus a lot on organic growth. We are not shopping around for anything,” he clarifies.
TCS recently acquired Citigroup Global Services Limited, the India-based captive business processing outsourcing arm of Citi for an all cash consideration of $505 million. The integration is proceeding according to plan, the CEO says.
Source:
http://www.dc-epaper.com/dc/dch/2008/12/15/index.shtml?ArtId=016_008&Search=Y
Any numbers being talked about are guesses — that’s the most he would say.
“Honestly, no body knows when the tech slump would recede. I don’t want to make any guess because we are living in times that are uncertain. Nobody knows anything. So we have to watch and play it by the day,” Ramadorai says.
The chief executive feels we are living in unpredictable times and “such an event (the collapse of the financial institutions in the US and the matching slowdown) has not happened in anybody’s living memory”.
“The US is in a recession. Europe and UK are in a similar situation. China has slowed down — their exports are suffering. India’s growth has dropped. I think it is impossible to predict what is happening. Consumer demand is very low. All the actions governments are collectively taking are still not yielding the expected demand requirements. Until consumer sentiments change, things will not be easier. We have to just hang in and focus on what we are doing,” he says.
Nevertheless, he does expect “positives” to emerge out of the current slump. From the employer perspective, employee retention rates are now much better with a less fluid job market.
“People are looking at upgrading their professional well being. They may go for masters and PHD programmes. They may attend a lot more of training and will look to create longterm intellectual capabilities,” Ramadorai believes.
Customers, he says, will look at cost optimisation — as an industry, Indians can relate to it very effectively and creatively.
“Finally, organisations have to look at internal ways of doing things. You may re-invent business models for the future and look at it in an optimistic manner rather than get worried about whether I am going to be in business or not,” he says.
The current environment is widely expected to stimulate two more imperatives: Indian IT services firms may focus more on the domestic market while exploring mergers and acquisitions considering favourable valuations. However, Ramadorai believes it is too early to say that consolidation will become a rule — “People want to retain cash and are not willing to spend much. TCS will focus a lot on organic growth. We are not shopping around for anything,” he clarifies.
TCS recently acquired Citigroup Global Services Limited, the India-based captive business processing outsourcing arm of Citi for an all cash consideration of $505 million. The integration is proceeding according to plan, the CEO says.
Source:
http://www.dc-epaper.com/dc/dch/2008/12/15/index.shtml?ArtId=016_008&Search=Y
