Indian IT industry body Nasscom recently announced that it would discontinue providing an annual guidance of the industry growth going forward. As the revenue of IT-BPM industry revenue grew to $180 billion dollar in FY18-19, with digital revenue yet again leading the growth drive, Business Today spoke to Debjani Ghosh, President, Nasscom on the latest trends and outlook for FY20. Read the edited excerpts from the interview.
BT: According to your report, 40 new global capability centres (GCC) were set up in 2018, so what has changed in the last couple of years in the functioning and capabilities of the GCCs based in India?
Debjani Ghosh: What we are seeing in the global capability centres (GCCs) is that most of them are focused on cutting edge R&D (research and development) for the company, cut expansion strategies; they are working on things that are extremely important for the balance sheet and for the future of the company. Today if you talk to global leaders, they say, if you want to understand what the company is doing in healthcare, you should not be walking through the corridors in the US anymore. Instead, you should go to Pune and walk through the corridors there, because the work is happening there and the decisions (are) being made there. That's the big change that we are seeing. And it's not just the 40 companies, but nearly around 1100 odd GCC, we're seeing that across most of them. In fact, a lot of companies have their largest R&D hubs right now in India.
BT: Nasscom has embarked on a directional shift with its announcement of discontinuing the tradition of annual industry growth guidance. What are the factors that led to this decision and in the future what metrics will be used to evaluate the industry growth?
Ghosh: So there are two things that are changing in the industry significantly. First, it's no more just IT services and BPM. The industry is becoming extremely diverse and NASSCOM is looking at that industry in totality, rather than just looking at it services and BPM, we are looking across the industry. And then there's tremendous benefit in doing that because the total impact of the industry is huge. Second, if you look at the growth, even within the traditional centres like IT services and BPM, it is a very different kind of growth and a different kind of industry. The fundamental business process within these companies is changing, and that's changing because of the pace of adoption of technology. The multiple numbers of new technologies that are going to come into play, orchestration and that pace is changing the entire rules of doing business. So the business processes and the fundamental core business of companies is changing. It's an industry and transformation. So for us to use the old guidance methodology, to predict what's going to happen, just didn't make sense. So that's the reason we said we have to stop this. In this era of transformation so many things are changing within the industry, it's best for us to start understanding the trends better.
BT: The industry growth that you shared, also finds an interesting mention of the e-commerce sector separately, with so many growth engines, has Nasscom's job of evaluating the industry become more complex?
Ghosh: Nasscom's job is tremendously complex. Frankly, it's not just industry, it's technology. The pace at which technology is playing, how many different technologies are playing with each other and that's causing the disruption within the industry. The new pockets (are) being formed. And honestly, there'll be many more different segments that will come out. I think we have to keep pace with the disruption that's happening and therefore, we have to be very flexible. And I think in this world as a business, as an association like NASSCOM, you have to give yourself the right to change your mind, when you realise something is not working. And we've given ourselves that right to change our mind about guidance, because it's just not working anymore. And I mean it's not the right thing to do.
BT: In this era of transformation for both companies and well as Nasscom, could you tell us how the industry body is helping companies in this process?
Ghosh: When you look across all the different segments today, including start-ups, the one common thread, which every single segment is going through is some level of transformation. Today, the biggest challenge for any company is they don't want someone or something out there to come and disrupt your business. So you have to keep pace, and you have to figure out therefore how I can stay ahead in the game. Today, everyone is trying to figure out that right transformation and that is a fantastic common thread and that is also the focus for Nasscom. If there's one thing we are going to do, is to help different segment to increase the pace of their transformation because it's all about speed. It's how fast you transform yourself over your competition, which will determine your competitive advantage, its speed ahead of everything else. When we look at transformation, thankfully, every segment has the same building blocks, first talent, which is a huge focus for Nasscom. Second, innovation. Everybody's looking for the right innovator, ecosystem; how to build a higher culture of innovation, how to scale innovation. And then the third one is to ensure that there is enough market, growth opportunity.
BT: Nasscom's report also talks about the evolving trends around digital, with 'digital' as metric yet to be standardised, how forthcoming are companies to share details?
Ghosh: We have had excellent discussions with a large number of our members, and they've shared a lot. And that's why we presented the evolving metrics. Now, the thing is, because this is new, this is very, very new, and everybody is learning by doing, there are a lot of different metrics that are getting used around. I think the job eventually is to figure out, but it's too early right now, because it's all in a stage of evolution. I think at some point, the job is to figure out what will be the right digital standard, not just for India, but for the world.
BT: Finally as the noise around H1B visa continues, what according to you would be the impact on Indian companies, if and when the proposed changes come into effect?
Ghosh: It means very little for Indian companies. Because the fact is of the 65,000 H1B visas that are given, less than 13 per cent has been taken by Indian companies. The intake of visas continues to decline year over year. Most of the H1B visa takers are companies that are usually sitting in the US. Yes, most Indian H1 visa goes to Indians and that is because, we have a talent surplus. We are one of the few countries that have stem talent and that stem talent is required by the world for their innovation. So the question that I guess countries have to ask is if they do change, and honestly, we haven't changed, but if they do change, then a lot of the multinational companies will have to figure out how do they get that talent because countries like US still have a huge talent gap.