It’s NASSCOM 2010 in Mumbai

NASSCOM is the national trade body representing the hi-tech and services industry in India. It’s an independent trade body that has been around since the 1980s and has fiercely developed and protected the hi-tech industry in India – from small roots to becoming the world leader you see today.

Each February, the NASSCOM India Leadership Forum provides an opportunity for the key players in the Indian tech industry to get together in Mumbai to explore the year ahead. This really is the biggest annual event in the Indian technology calendar, so what are they planning to talk about this year?

The economy is clearly a factor dominating the opening day. The main keynote sessions are all around the recovering global economy and what it means for the technology sector, with some planning sessions on what to expect from the recovery. What’s interesting to note is that the sessions are generally themed around innovation, standing out from the crowd, and achieving more with less. This is a mature discussion that has moved on a long time ago from how to save money by using an IT firm X that is cheaper than IT firm Y. The NASSCOM audience is well aware of the important supporting role technology plays in all business sectors – lets face it, in a modern business, if the IT fails then you will see a catastrophic issue, whatever business sector you operate within.

NIIT Technologies is a platinum sponsor of the event – taking place this week – so if you are in Mumbai then please do come and say hello at our stand.

A fractional improvement?

What happens when an entire system of pricing, weights or measure changes? It’s usually complete chaos. Defenders of the mile in the UK argue that it would be too difficult to switch to kilometres now – even though the rest of Europe all uses kilometres – because of the potential for accidents as a generation brought up on miles struggles to cope.

Britain went through a change in currency in the early 1970s as decimalisation forced people to think again about the pound they were spending, and later on it became mandatory to use kilograms when buying produce in stores. On continental Europe, the Euro transition in the late 1990s took place remarkably smoothly, far smoother than anyone could have expected.

And now, what is the latest change being suggested? Betting odds moving from fractions to decimals so people can better understand the prices that they are betting at.

Racing industry body, Racing for Change, has suggested the changes to make betting easier to understand and supposedly to bring more punters to the racetrack. They have suggested that younger people don’t really understand the maths involved in betting odds, which seems odd as the maths involved in most betting is a lot more simple than anything in a high school maths class.

New rules will mean a 2-1 bet (bet £1 and win £2 if your bet is correct, plus you get your stake back) will become a 3. Just a 3. Meaning you have a chance of winning £3 if you bet £1 – including your stake.

It sounds simpler, but a lot of heritage and tradition would go out of the window.

The public will always be suspicious that changes like this are about getting more money from them, so I wonder if an improvement to basic education that means decimals and/or fractions are better understood generally might make a difference?

Flying through a storm

Airlines are having a tough time at present. Travel budgets are one of the first savings to be made in a recession and everyone is suffering. Just recently JAL, the biggest airline in Asia filed for bankruptcy protection. So what can they focus on to try helping the customers they do have become repeat customers, especially consumers of ancillary products beyond just the ticket itself?

I read a Forrester report recently that focused on how and why airlines should create a multichannel strategy, to try simplifying the whole process of buying air travel and flying. Forrester raised a number of interesting points:

• Passengers should be able to use mobile phones or loyalty cards to pay for extras – like checking in baggage.
• Websites that offer a great check-in service should also build in some additional products and services, and make it easy to add them to the journey.
• Airlines need to consider extra product sales as part of entire lifecycle; the passenger does not just book and fly, there are many opportunities to interact before, during, and after a journey.
• Many underlying airline technologies are very old and were never designed for the services of today.
• Measures are still designed around the ticket rather than the total value of the customer and what they really spend.
• Route analysis is far more complex now and airlines should have more data and more ability to understand which routes are profitable, but they often use old methods just based on ticket revenue.

And what is clear from the Forrester research is that it’s technology and tools that will underpin many of these changes, taking airlines from today to tomorrow.

Under the weather

The UK has seen the coldest sustained period of weather on record for several decades. From a week before Christmas to this past week has been consistently cold, with considerable snowfall further complicating life in the UK.

The UK usually enjoys fairly mild winters, thanks to the warm air of the Gulf Stream, yet British thermometers have recently gone as low as -22.3C. Not at all the mild winter some had hoped for.

But how does this unexpected weather affect business?

There is the initial difficulty of getting to work. When rail and bus services struggle to continue offering a regular service in extreme conditions then millions of people find it impossible to get to their place of work, or just to meetings as a part of their daily business life.

British local authorities only hold salt and grit supplies for a sustained icy period of six days. They were caught out by the sustained nature of this cold period and unable to ensure roads were clear. The continued disruption to the rail and bus service has led to millions of working days being lost.

This inability to commute or travel normally has had a devastating effect on retailers, how have seen footfall collapse. Not only are fewer people shopping for leisure when it means spending hours in the icy cold, but fewer commuters and passers-by means less chance for impulse purchases.

There has been an immense demand for power from the National Grid as businesses and homeowners have increased their heating, just trying to make it comfortable at home or work.

Even sport has been affected. It is not obvious that winter sport, such a football, should be affected, but if it’s not possible to get staff or medical facilities to grounds before a game then it’s not possible for a match to take place. The Scottish ski-slopes in the Cairngorms were closed this week, because of too much snow! Not on the slopes, but on the access roads to the slopes, making it impossible to offer any safety facilities.

It’s clear that even a complex and developed economy, like the UK, can be turned into chaos by a sustained period of bad weather. Technology can’t do a lot to prevent the weather doing it’s worst, but these are the kind of events that should be in your eCommerce strategy. If your business depends on logistics, people, or stock, all moving to the right place at the right time then what mitigating plans have you got in place when 30cm of snow falls in one day?

It’s worth considering as an example of how to plan for the worst-case scenario. You can guarantee local authorities are going to be planning further out than six days in future.

Innovation in a Recession

The economy is recovering. Most developed nations are back into growth again, and even where a technical recession still exists (like in the UK), there is more confidence of business in the future than there has been for the past couple of years.

But when is a recession a good thing?

Historically great social changes have occurred because of economic downturns; road building, railway building, school creation. Huge investments in public works previously created jobs and shaped entire generations, but what about now and what about the companies that are damaged?

Well, at a company level it can be argued that recession is good for innovation. Innovation involves change and change can be hard to achieve in a company where processes are agreed, set down and remain unchanging in a safe unthreatening environment. Often, it takes the threat of survival or collapse to convince companies that it’s time to entirely change the way things are done.

There are amazing innovations being created in fields such as bio-fuels, healthcare, and transport right now; even while the economy suffers. And in consumer technology just look at the way the mobile phone market is shifting to be dominated by which handset has the most flexible platform for applications – that market has entirely changed in just a couple of years.

When did you first sign up and start tweeting message on Twitter? Probably last year, or possibly 2007 if you were a really early adopter. Twitter has entirely changed the nature of social networks as well as how news and search works on the Internet. Yet all that change has happened in the midst of recession.

It’s true that we are just emerging from some tough times, but the IT sector has been incredibly productive during that period of time. Hard times can really create genuine innovation.

New Year Resolutions

So what are the resolutions every business needs to make for 2010? Well, it’s a new decade so one might expect some new focus – particularly important given the economic roller coaster we have faced in the first decade of this century. I sat and thought about some of the key business issues facing every firm in the year ahead:

1. Cash is still king. It’s fortunate that most companies are optimistic for a better 2010, but there are many sectors where the optimism is riding ahead of orders, so it still pays to ensure you have enough spare cash to see you through to a real recovery.
2. Risk is under constant review. In IT services that are spread globally that means exploring new ways of working across borders, keeping different proportions of teams onshore and offshore, and exploring new regions or ways of working together.
3. M&A will be an important driver of new growth in the IT services market, especially in India over the next year. There are some firms out there who didn’t handle the recession very well and could to vulnerable. It’s an interesting market at present and the skills are out there.
4. Keep looking forward; we are going to get through these tough times. Whatever the criticisms being levelled against leaders such as George Bush or Gordon Brown for leading us into this economic meltdown, there has been decisive economic action by many governments to avoid a new great depression. We are able to look forward to growth again within two years of economists predicting the worst ever financial collapse in history. That’s something to be grateful for – we can start planning ahead once more.
5. The green agenda is coming back to bite you. As I mentioned on a recent blog post, the Carbon Reduction Commitment is going to be legally mandated and audited. Big British companies are going to be forced to reduce their carbon use and that will affect their choice of IT supplier. Think green or lose out on real business.

Companies will spend more to be social

So here I am writing blogs and what’s it for? Well, I hope that by engaging in this online conversation I can interact with others in the industry and swap ideas about what’s going on. It might have been B2C consumer-led firms that initially rushed to get online, but the B2B firms like those in IT services will follow, because the consumers of B2B services are going to expect some form of online debate, if not now then in the very near future.

And it’s not only me that thinks this form of online debate is becoming essential. Take a look at this eConsultancy news article, which surveyed over 1,000 firms.

What’s really interesting in the statistics shown here is that some firms that have tried engaging online still have no idea what they are supposed to be doing. Some have tried using tools like Twitter to promote what they are doing – as if social media is just one big billboard.

I can’t claim to know all the answers myself. My own blog is still in its youth, but I think that by keeping this blog focused on promoting debate about the issues in the industry we operate, it should be engaging and informative. Promoting that kind of debate with the people in the industry I want to engage with is essential.

We are no longer operating in an environment where it is possible to just mail out adverts for IT services. Potential partners and customers will only work with someone they have engaged with to some degree. I’m convinced that social media tools offer the best way to engage with other company leaders, but what do you think?

Tech Pioneers at Davos

Each January, the World Economic Forum (WEF) meets at Davos in Switzerland, gathering together political, corporate, and social leaders in a forum that explores the future of world society.

The WEF Technology Pioneers Programme seeks out the latest innovations from the world of technology, giving those company leaders a platform to show their services to the world. At NIIT we are proud to have been associated with the WEF in the past and we fully support their work seeking out the technologies that will change society in the next decade.

With the challenging backdrop of recession in much of the developed world, I’m convinced that the innovative use of technology is more important than ever. Not only can we make life easier for those in developed regions, these innovations can be applied to furthering economic progress and social development.

The increased broadband capabilities of many African nations in the past year, due to a number of new sea cables landing, is a prime example. Better broadband means new opportunities for entrepreneur to be offering remote services using IT. More ideas, services, and companies mean more jobs and higher expectations for the education system. The global IT services industry could be the catalyst that sparks immense growth and development in Africa.

I’m looking forward to hearing news from the WEF and particularly the presentations on the Technology Pioneers Programme. Companies such as Twitter, CollabNet, and Ushahidi are changing the way information flows across the web – and therefore the world.

It’s going to be an exciting WEF. I hope you can join me online to discuss some of the new ideas from the forum whether you are in Davos or just following the presentations online.

Green IT is coming in 2010

It’s time for a wake-up call across British business. The emphasis on green is back again. And I don’t just mean because of the protestors blocking streets in Copenhagen. 2010 is going to be a watershed year for British business and the environment lobby.

Step back in time a few years and think about how important the green agenda had become. Al Gore had done his thing with ‘An Inconvenient Truth’ back in 2006, raising climate change to the top of the media concerns at the time.

That filtered through to companies starting to have genuine concerns about their effect on the environment, to the extent that companies sending our RFI documents would ask potential suppliers to detail their own carbon footprint. Something many suppliers in the IT market were not at all ready for.

But the recession changed everything.

As things changed in late 2007 and early 2008, it became far more important to just focus on survival. The green stuff could wait. But look again at what the British government’s Department of Energy and Climate Change is doing now.

The Carbon Reduction Commitment (CRC) will come into force in 2010, as mandated in the Climate Change Act 2008 – and there are dozens, if not hundreds, of companies that don’t seem to have taken any notice of the new law yet.

It’s about to be law that large British firms reduce and audit their carbon use, so once again IT suppliers are going to have to be ready for all those questions about carbon footprint. Only this time, it’s not just a nice to have, it’s essential.

BRICs – are these still the places to watch?

A few years ago there was a lot of debate around the BRICs nations; Brazil, Russia, India, and China. These were the countries to watch in the twenty-first century as economists predicted they would soon become the most economically powerful nations on earth.

Roll forward a few years and the economic slowdown that none of those economists predicted has possibly changed the conventional wisdom on the BRICs. Perhaps not destroying the theory, but allowing new ideas and factors to be introduced to the predictions.

In the IT services business, rather than just the economy as a whole, there is a lot to be excited about. India went into this century as an international powerhouse thanks to the issues of the Millennium bug, and now the country goes into the next decade exceeding all expectations. India has suffered immense shocks, but growth continues in IT services and in the wider economy.

Despite these shocks, and reduced market growth for the past couple of years, India does remain the leader in offshore business process outsourcing and IT services, for all the reasons that made it a natural choice before the recession – the highly skilled workforce, the knowledge gained over this past decade, and the labour arbitrage.

China is becoming a more open place to do business, with many IT firms now offering services from China, but there is still no national body like NASSCOM, that can speak as a single voice for the entire technology industry there.

Russia has probably suffered the most, with wage inflation that turned it from a low-cost destination into an extension of Europe. There is some great technology expertise in Russia, but without a cost advantage it ‘s going to be hard to grow – though the growth now is probably more in the former republics of the Soviet Union, rather than Russia itself.

Brazil is the real surprise of the BRICs. Just look at what is coming up in the next decade. There is the 2014 World Cup, the 2016 Olympic games, and an economy that barely even went into recession before growing again. With over 1m people working in technology already, it’s really going to be a major powerhouse in the next decade.

It’s true that the BRICs remains a good summary of the high-population, accelerated growth countries that are most likely to succeed, but there are a lot of places around the world now developing an IT services model at a very rapid pace. Vietnam and the Philippines in Asia, many African nations, and several smaller Latin American countries are all going to be significant players a decade from now. The strategic move to non-linear models and Shared Services, will enable India to retain its position at the top of the pile.