Tech firms pin hopes on the Digital India mission

Mumbai: Executives in the technology industry are not discouraged by the recent forecast by lobby group Nasscom, which predicted the industry will grow by 12-14% in 2015-16.

At Nasscom’s India Leadership Forum, hopes are high on the government’s Digital India mission. They also say more needs to be done to provide the right skills to students so they can hit the ground running once they join the technology work force. Mint spoke to three chief executives at the Nasscom forum. Edited excerpts:

Aruna Jayanthi, chief executive officer, Capgemini India Pvt. Ltd

On slowing growth in IT services:

I think the 12-14% industry outlook given by Nasscom is quite realistic. I totally support that. There are strong reasons to back why that looks realistic. As far as we are concerned, from an India perspective, I think we will also do that, but my hope is to beat that estimate.

On Capgemini taking advantage of the Digital India mission:

We are engaged with government in a few projects, but it is too early to say. We have to actually see the projects. We would be cautious, but yes, of course, we would be interested in looking at it, but how much of it we will do, that is something which we need to question.

On India’s engineers being ready to handle new and emerging technologies:

I think the institutes have to look at reshaping and re-thinking about new things, there needs to be some change. But traditionally, Indian IT industry has always supplemented the people who come out of educational institutes with anywhere from six weeks to three to four month of training. It has been a model. I mean, it would be great if we could take people and put them to work with just two weeks of orientation. But the reality is, I don’t see that happening. It is really hard because they are fully ready and corporate orientation is still a bit lacking.

On non-linear model of growing:

The industry has been talking about non-linear model for quite a while. I think that will accelerate now. If truly the promise of automation, autonomics works, we will get multi-fold improvement in productivity, which automatically means less people. Then the industry can’t ignore the fact that headcount growth is not the measure of its true revenue growth. But the industry should be able to keep that margin. For instance, you are selling at something. Your cost of delivery goes down significantly because of automation. Then you should be able to hold on to that price levels, which means that you are really getting the benefits of non-linearity. If you can’t, then really, again, you are back to the linear. But there are many other ways to build a non-linear one like platform-based services.

R. Chandrasekaran, chairman, Nasscom, and executive vice chairman, Cognizant India

On slowing IT industry growth:

As per our earnings announcement last week, we have guided for 19% growth for January-December 2015, which is our fiscal year. This will take us to a growth of about $12.2 billion, which we think is very healthy growth by any standards. We are very happy about how 2014 turned out. We won significant large deals, which we will be ramping up, going forward, and that makes us very confident about 2015 as well. From an industry perspective, Nasscom released the numbers for the fiscal year that ends in 2015, according to which we are likely to grow at the lower end of the guidance. However, the guidance for financial year 2016, of 12-14%, points to a very healthy growth.

On Cognizant taking advantage of the Digital India initiative:

As an industry, we are very bullish about what Digital India means for the industry. The whole government is looking at driving transformation​ through technology.

Digital India is all about leveraging technology for better living, which opens up a lot of opportunities for firms. Thus, we are v​ery excited given the level of commitment from th​e​government about developing applications that will reach citizens across the country. ​I feel this is a very opportune time when everything is coming together—the technology is there to drive changes, the government wants to leverage technology and, on the supply side, India has a unique advantage of a large talent pool, who will be re-skilled by all the stakeholders to get digitally adept to seize these opportunities​.

Keshav Murugesh, chief executive, WNS Global Services, and chairman, Nasscom business process management (BPM) council

On slowing IT services industry:

I am very positive about Nasscom’s guidance of 12-14%, and within that, the internal BPM council industry forecast is 10-12%. From a WNS perspective, I am extremely positive about our growth prospects as we are growing our profits better than our revenue. Our actual growth guidance for FY16 will be provided in April.

On WNS taking advantage of the government’s push on Digital India:

The BPM industry delivers $28 billion revenue overall, of which $23 billion is exports. This means only $5 billion is domestic revenue. The best part about the Digital India initiative, therefore, is that in order to dramatically improve citizen services, there is a huge need to introduce BPM services in every aspect of life. This means there will be a lot more employment creation, new revenue streams and the entire industry will benefit from this push.

On India’s engineers being ready to handle emerging technologies:

The BPM industry is constantly hiring, but in the future, we must be focused on more thinkers than doers. For freshers, the BPM council with the help of Nasscom skill council has partnered with training companies, and universities, with each company embracing a few colleges to create a programme that includes additional qualification packs of additional 120 hours that we are asking colleges to be added to existing curriculum to add more business-ready workforce and help in re-skilling for the BPM industry.