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January 28, 1999


Yawn! NASSCOM '99 gives 'repetitive stress syndrome' a new definition. Priya Ganapati
at NASSCOM '99, Bombay

If you are one of those people who think they can play their favourite song over and over again all the way to eternity and never get bored; think again.

Email this story to a friend. Or even better; visit NASSCOM '99. It can be quite a lesson in how senseless an infinite loop of jargon and dusty ideas can get.

HP's new home PCs
VSNL divestment
Millennium products
'Moving up the value chain' :-(

'ERP' :-((

'How to make India a software superpower' :-(((

And if you agree all this is very sad, wait till you get to the part where a 40-minute 'Special Session' was used to fill in the delegates on the textiles business in the country! Delegates, who had paid Rs 9,000 to get a hang of the infotech industry instead!

The second day of the National Association of Software and Service Companies' annual jamboree today began with an ill omen.

National Informatics Centre Director General Dr N Seshagiri, who was to deliver the keynote, could not make it.

The grand old man of India's information technology industry was held back by an unscheduled meeting at the Department of Telecommunications.

NASSCOM's very own President Dewang Mehta filled in that blank.

Then came the saving grace.

Strategy to move up the value chain

The topic was dealt by Infosys Technologies Managing Director Nandan M Nilekani, McKinsey & Co Managing Director Vivek Kalra, Citicorp Information Technology Industries Limited CEO R Ravishankar and KPMG Peat Marwick Managing Director Sridar Iyengar.

Infosys's Nilekani pointed out that "Moving up the value chain helps to build brand loyalty. We have to go up because of the impact of globalisation. In a global environment people will go to those companies which deliver the best businesses and where they get paid best. Brand building helps retain loyalty."

McKinsey's Kalra detailed three options for moving up the value chain.

  • Higher value generic IT services
    Companies need to provide system integration and consulting and not just body shopping.
  • Focus on IT service companies
    Companies need to build or acquire proprietary IT service expertise in vertical markets.
  • Moving into new areas
    Companies need to diversify into new ventures, software products and services.

Kalra, who really believes in counting bullets then revealed the "five key factors to success".

  • Vision/Mindset
    There has to be an ability to take risk and create the right incentives for people to take those risks.
  • Strategic thinking
    It should not only be done by the CEO but also by the senior management team.
  • People management
    There is a need to attract, develop and retain the best people.
  • Alliances/Acquisitions
    It is not possible to sustain high growth rates without looking at alliances and acquisitions. But it is important to be careful so that expensive mistakes are not made.
  • Target audience
    A product development company should first decide on the target sub-segment.

If all this sounds very obvious to you, don't fret. It is the simple things in life that matter.

CITIL's Ravishankar then had his go. But not wanting to disturb the general flow of things, he fished out his bulleted list. Six steps to move up the value chain.

  • Service businesses
    These can be used to get a steady revenue stream to fund investment and spin off products. However, no significant company in the world with presence in products and services business has succeeded in both. There is usually an image spillover as both are different business models.
  • Focused approach
    There is a need to build specific expertise, create technological specialisation, build a corporate identity and a brand equity.
  • Style versus substance
    Image presentation have to have quality if you need to appear as a credible deliverer of value. Do not cut corners and promotional expertise. It is necessary for upfront entry into a market.
  • Building a premium resource pool
  • Flexible commercial approach
    It is essential to focus on achieving customer delight and offer flexibility, at least for the initial customers.
  • Brand identity
    A brand equity has to be built around which the products and services offered can be centred.

Having fired so many bullets at you, it is time for a break.

Now comes the Big Screamer, we have been promising you.

Once upon a time, Shyamal Ghosh used to be the secretary of the Department of Telecommunications. So, he got invited to deliver the post-lunch special session.

But Ghosh, who is currently the secretary at the ministry of textiles could not ignore his office even at an IT summit.

"We have set up a 'technology upgradation fund' which is going to be implemented through financial institutions and will be used particularly by the weaving and processing sector."

Later he clarified to Rediff that the 'technology' in the 'technology upgradation fund' is that of textiles and textiles only!

On stage, he excused his diversion into textiles by executing some intricate linguistic cartwheels. "Of course, microprocessors can be use to upgrade and automate technology in the textile industry." That was smoother than polyester. What say?

(At some point around this time, in walks a delegate who is poorer by Rs 9,000)

Delegate (innocently): Who's talking?

Reporter (grinning): Secretary, ministry of textiles, Shyamal Ghosh.

Delegate (zapped): But isn't this an IT conference? What has the ministry of textiles got to do with this?

Reporter (smug): As soon as we figure it out we will let you know.

NASSCOM '99 coverage:

  • Day 3: What goes down must come up. Rediff yawned. But the final day makes us revise the rating from 'poor' to 'good'.
  • Day 1: New Delhi is venture capital. DoE is setting up a Rs 1 billion fund for the IT industry.

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