Now, they’ll have to push the envelope

BANGALORE: There’s a kind of a deja vu. Similar excitement, anxiety and touch of pride had washed over these three companies when they crossed the $500-million mark a couple of years back.
But, like a sumo wrestler simmering under a stupendous effort, a myriad challenges can leave the strained muscles of this trio quivering.
Says the CEO of India’s only billion-dollar company, TCS, S.Ramadorai, “Today the key challenge for Indian companies will be to move from an application development and maintenance mindset and offer more value-added services such as consulting, infrastructure management. You should be able to go to a Fortune 100 company and prove that you can enhance business and management performance, rather than merely look at the way you re-engineer IT process.�
The biggest challenge will be to maintain the leadership position. Suresh Senapaty, CFO of Wipro Technologies, says: “This means being alert to changing customer demands. When you aim at being a global company, you not only have to track competitive trends but also adapt to them, constantly add new customers and deliver on time. Most important, we need to build strong board-level relationships, deep domain knowledge and great consulting skill sets.�
Next comes the size of the workforce. As you grow in size, management becomes a gargantuan issue. TCS and Wipro Technologies have over 24,000 employees each and Infosys about 19,000 as of today.
Infosys slipped a bit from the stardust-covered pedestal with more than 850 senior-level management staff quitting in the past six months. Sources have it that during a recent internal meeting, Nandan Nilekani, CEO, addressed employees and said he took complete responsibility for all the dissatisfaction that the employees were saddled with and that necessary corrections would be made. This was against a backdrop of a survey that had indicated that the employee satisfaction level had dipped.
When, revenues are at a fast clip, the head count shoots up too. And managing a huge organisation becomes tough.
“We are focusing on this — talking to our employees, taking a re-look at our policies, our approach to see what we can do in terms of policy, compensation and empowerment,� Nilekani added.
The other challenge in joining the big league lies in sustaining growth. So, companies go in for more fixed-price projects (where you could lose money but could be more profitable) rather than man month rate (where risks are minimal and profitability is also low). Wipro is also looking at other revenue streams like licensing its intellectual properties (IPs), while Infosys sells its banking software as products.
“When we were looking at outsourcing, some of our development work to an Indian software services firm, we were concerned about the processes that were being used. Sometimes, Indian firms tend to lose out on larger bids, because they do not document all the processes in software development,� adds Ajit Edlabadkar, country manager, Wind River Systems, which has outsourced some of its work to Wipro.
The other factor is that of branding. Product companies pump in about 35 per cent of the revenue in selling, while 20-25 per cent is in R&D but Indian software companies spend only a fraction of this amount. “You need to position your company and create a brand to become a success in the global market,� notes Noshir Kaka, partner, McKinsey & Co, a leading consulting firm.