‘Will focus more on insurance and govt digitisation projects’
A market that fetches close to ~27,000-crore in annual revenues and is home to over a third of the company’s global employee base, India is extremely important for IBM and for SANDIP PATEL, managing director for India and South Asia. Patel had not even settled in the new role after relocating to India in January when the pandemic began to spread. He tells Bibhu Ranjan Mishra & Sai Ishwar that India’s relevance is only going to increase in the new scheme of things. Edited excerpts:
IBM seems to have a lot at stake in the country. How are you generating opportunities in such an environment?
Three shifts are shaping the world over. First is the acceleration of digital ecosystems, which is touching every aspect of our lives. Second is new business models are in motion now, and these require greater cost efficiency, agility, and security. Enabling these digital supply chains and new business models are new revenue opportunities (for us). Companies are now determining to shift their investments with a focus on ecommerce rather than on brick-and-mortal stores. Third is the emergence of network economy that is defining the way people are working or interacting. This is where cloud and security become really important, because people are now concerned about technology, disaster recovery, and sustainability, which is getting built into the infrastructure.
Since more investments are expected to go into digital, will this result in smaller sized opportunities rather than large transformation projects that IBM is known to execute?
We are probably seeing more shorter-term opportunities (in newer technologies) because clients are trying to sustain in the new world. On the other hand, we have done two announcements with Airtel and Vodafone, which is a significant shift. They are creating cloud stacks that enable them to become more open and agile with the promise of 5G. So, I wouldn't say it is one or the other. It’s a healthy blend of both.
A lot of clients want to cut discretionary spends or ramp down projects. Have you faced any of these issues?
Every organisation is cautious about how they are spending. Some are trying to re-prioritise spends. Then, there are others who are willing to spend to equip themselves to take advantage of new opportunities in areas that have not been impacted. There is certainly a bit of caution in the air as they want to make sure that the next wave of investments takes cognizance of the shift that will come in the future.
Does that mean a change in approach by IBM with regard to India as a market, at least in the short- to medium-term?
We had always had a focus on financial services, telcom, and manufacturing. While financial services and telecom sectors have not seen much of an impact during the pandemic, the manufacturing sector has. Within financial services, one of the areas that we are focusing on is insurance because that is expected to see huge growth. A lot of our insurance clients validated that they are seeing an increase in their protection product premiums. The other area we are starting to get into is working with essential platforms in the government space. We have worked with ICMR and Agriculture Ministry during the pandemic. We are exploring where we can add real value to some of the government’s digitisation projects that are starting to happen.
Many firms are still figuring out where to spend to make themselves more resilient, which would require a lot of consultative support. Is IBM seeing this as an area of opportunity? Yes. This is core to our business. We consult clients on the business environment and the implications. Clients are seeking help on how to become 99 per cent work-from-homeenabled and agile. They are also asking for solutions to drive more resilience and sustainability, and to de-risk data and applications, which is where our 'cloud value transformation' offering helps. Another form of consulting service that is gaining traction is in the area of ‘security risk’ once cloud migration is done. Overall, consulting cycles have shortened now due to faster design thinking and collaboration tools.
IBM announced global workforce reduction. Given that a third of your workforce is located in India, how does it impact them?
The global realignment was not (done) due to Covid-19. We do that normally, to align us to what the market needs. India's relevance becomes more real as people are beginning to realise you can bring quality people together across various geographies. The skills around virtual coding, design, and selling have also become relevant.