At a time when the Indian IT industry finds itself in the crossfire of stringent visa regulations and a dwindling market, the latest NASSCOM projections on the IT industry for the fiscal year 2017-18 do come in as a ray of hope. While the projections may not be too rosy from the point of view of numerical percentages, there is enough growth opportunities going around in the IT industry for the more aggressive players to corner. Here what the NASSCOM has to say about the Indian IT industry in fiscal year 2017-18…
What are the numbers that NASSCOM is projecting?
While the NASSCOM has not denied the challenging environment facing Indian IT industry, it has made some interesting projections for the fiscal year 2017-18…
- For the year, NASSCOM expects exports of IT services to grow in the range of 7-8% while the domestic IT demand is expected to grow at 11-12%. Of course, the domestic IT market is just a fraction of the IT export market for India.
- NASSCOM expects the industry to add nearly 1.2-1.5 lakh jobs during the year. However, the trend in the last few months appears to be that IT companies have been propping up their global recruitment at the cost of its Indian headcount. Also, it remains to be seen how Indian IT achieves this number at a time when more IT companies are focusing on automation and reduction of workforce.
- NASSCOM expects the Indian market to play a more significant role for Indian IT companies in the years to come. With over 432 million internet users and over 300 million smart phone users, Indian market is ripe for a big push for IT services.
- NASSCOM has also projected that IT spending across the world will see a pick-up in 2018. However, Gartner continues to be cautious on the pace of growth and has been hinting at tepid to negative rates of growth for global tech spending.
- The NASSCOM has dwelt at length on the need for Indian IT workers to urgently reskill themselves. Most of the IT workforce is still tuned in to the BFSI era, which is not exactly likely to generate business alpha. Hence the need to reskill manpower with digital skills will be most critical for the future of the Indian IT industry.
The focus will be digital, digital and digital…
Even if we were to leave the actual numbers aside for the time being, the big focus will be on the digital side of the business. There has been a distinct shift towards digital which broadly the SMAC foursome of social media, mobility, analytics and cloud. That is where most of the large corporations are investing and that is where the chunk of the opportunity for Indian IT companies is going to come from. NASSCOM has highlighted the following key points with respect to the digital opportunity for Indian IT companies…
- While the BFSI business is expected to see some traction in the coming year, the real alpha will come from the digital business. The NASSCOM has focused on the need for integrated digital skills in Indian IT companies to tap this opportunity.
- The core of the digital opportunity is to get a more granular and 360 degrees view of the customer requirement. That is the skill that Indian IT needs to develop. In fact, NASSCOM has called upon IT companies to reskill their workforce on these lines.
- In fact, NASSCOM sees the biggest opportunities in the coming year emanating from SaaS applications, cloud platforms, business intelligence, cognitive embedded analytics, IOT, artificial intelligence etc. These are expected to get a lot bigger.
- The good news is that not only is the Indian market adapting rapidly to digital technologies but Indian IT companies are also adapting rapidly to the changing digital specifications for the global industry.
What are the thoughts of the thought-leaders…
The gist of the NASSCOM outlook for the Indian IT industry is best captured by the 2 principal thought leaders at NASSCOM. Raman Roy believes that Indian IT industry has shown tremendous adaptability to the new normal in IT industry by changing their business models and also by investing in products and platforms. Raman feels that this constant reinvention is at the core of the Indian IT industry performance.
R Chandrasekhar has lauded the IT industry for being net hirer but has also called upon the IT industry to help reskill the industry in their own interests. That according to Chandra will help the IT industry prepare for the future.
The bottom-line appears to be that the investors may have become, perhaps, too cautious on an industry that is still showing a tremendous ability to constantly reinvent and adapt itself. From an investment perspective, this may be a key takeaway for the stock markets.