IT top 5 walk different roads to boom
Though they top the software industry, these hot-growth firms are uniquely different, reports Prerna K Mishra.india Updated: Dec 22, 2006 12:49 IST
There is a twist in the Indian information technology industry's boom story. While many think that its leaders follow an identical path of using software and industry expertise to offer low-cost services, the strategy of five of the top hot-growth firms with India-centric operations - Tata Consultancy Services (TCS), Infosys, Wipro, Cognizant and HCL Technologies - differ in style.
Infosys and Cognizant are hiring away for organic growth, Wipro and TCS have been buying out small overseas companies for inorganic growth while Delhi-based HCL Technologies has chosen a tangential route to tap unexplored, virgin markets under its "Blue Ocean" strategy.
In a style statement distinct from others, the top brass of Infosys are found in high-profile events like the World Economic Forum's annual summit at Davos to network with Fortune 500 leaders that offer juicy, long-term deals.
“The formerly undifferentiated low-cost top three players are all at a strategy crossroad,” says industry researcher Forrester's Country Head and Senior Analyst Sudin Apte.
While Infosys has recognized the need to build consulting expertise in its client markets, TCS is focussed at its centres of excellence built around special skills and a global footprint.
Wipro continues to focus on processes and costs, while HCLT decided to experiment with uncharted segments, internal transformation of client companies and output-based pricing.
“Eighteen months ago when we kick-started the Blue Ocean strategy, we were trailing the industry growth average. But, we decided to play it our own way.
"Now, the transformation strategy has started bearing fruit as for four quarters in a row, we have been more often than not, exceeding industry’s quarter-on-quarter growth average," said HCLT President Vineet Nayar.
While TCS’ recent acquisitions in Latin America and Ireland demonstrate its ambition to create delivery centres of respectable size outside of India, Cognizant has gone only for small tuck-in acquisitions.
“Cognizant’s growth drivers have been expanding solution offerings - beyond financial services and healthcare industries into pharmaceutical, telecommunications, manufacturing and retail, and expanding the footprint in Europe. We believe that acquisitions aimed at growth or revenue is a bad strategy,” says Cognizant Managing Director and President R Chandrasekaran.
Financial analysts are facing difficulties in sifting out the nuances that make the high-growth companies different from each other, as they rely on the Infosys model as a benchmark, industry officials say.