Fo­cus on cus­tomer’s busi­ness out­comes

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MAN­ISH BAHL Vice Pres­i­dent & Coun­try Man­ager For­rester Re­search

Poor eco­nomic pol­icy, high in­fla­tion, de­layed re­forms, the ru­pee’s fall against ma­jor cur­ren­cies, multi­bil­lion-dol­lar scams and po­lit­i­cal grid­lock are all neg­a­tively af­fect­ing the coun­try’s growth.

The GDP growth fell un­der 5 per­cent in the first nine months of the fis­cal, and this slowed the growth of IT pur­chases. As a re­sult, we have re­vised our fore­casts for tech spends in In­dia in 2013 from the ear­lier es­ti­mate of 7.3 per­cent to 6.5 per­cent in ru­pee terms.

We ex­pect the In­dian econ­omy to pick up in 2014, al­though at a slower rate, thanks to the pos­i­tive im­pact of good mon­soons, uptick in ex­ports due to the weak­en­ing ru­pee, and in­fra­struc­ture projects which we ex­pect to take off once the new cen­tral govern­ment is in place. While we ex­pect en­ter­prise IT spends in 2014 to grow at 8 per­cent in the lo­cal cur­rency, in dol­lar terms it will re­main flat.

There re­main four for­mi­da­ble threats that may im­pact the eco­nomic out­look: po­lit­i­cal in­sta­bil­ity af­ter the na­tional elec­tions would have a long-term eco­nomic im­pact, higher pub­lic spend­ing and lower rev­enue growth may in­crease the fis­cal deficit, in­dus­trial growth may de­cline fur­ther due to slug­gish man­u­fac­tur­ing per­for­mance, and a fur­ther de­cline of the ru­pee would worsen eco­nomic woes.

Notwith­stand­ing the macro chal­lenges, we be­lieve that over the next few years three trends will drive the IT spends of In­dian or­ga­ni­za­tions.

Re­defin­ing cus­tomer en­gage­ment strate­gies: Dig­i­tally-em­pow­ered cus­tomers are forc­ing firms to re­de­fine their en­gage­ment mod­els to sur­vive in the age of the cus­tomer. In our re­cent sur­vey of In­dian CIOs, nearly 87 per­cent of the re­spon­dents said that their top busi­ness pri­or­ity is to ad­dress the ris­ing ex­pec­ta­tions of cus­tomers. Low­er­ing the firm’s over­all op­er­at­ing costs is much fur­ther down the list of pri­or­i­ties.

In­creas­ing busi­ness in­volve­ment in tech de­ci­sions: As the boundary be­tween IT and busi­ness blurs, busi­ness units are get­ting di­rectly in­volved in tech­nol­ogy dis­cus­sions as a means to dif­fer­en­ti­ate their or­ga­ni­za­tions and drive busi­ness growth by trans­form­ing the cus­tomer ex­pe­ri­ence.

Fo­cus­ing on cus­tomer-ori­ented busi­ness out­comes: The dif­fi­cult eco­nomic land­scape has forced In­dian firms to look for new and in­no­va­tive ways to cre­ate ef­fi­cien­cies, im­prove cus­tomer re­spon­sive­ness, and drive busi­ness growth. They are look­ing for ways to ap­ply tech­nol­ogy to deliver tar­geted busi­ness out­comes faster, bet­ter and also cheaper.

Growth do­mains

Al­though com­put­ers, pe­riph­er­als and com­mu­ni­ca­tion

The dif­fi­cult eco­nomic land­scape has forced In­dian firms to look for new ways to be ef­fi­cient.They want tech­nol­ogy to deliver tar­geted busi­ness out­comes

equip­ment will con­tinue to dom­i­nate over­all tech­nol­ogy spend­ing in 2014, soft­ware and ser­vices will gain the most from the sharper fo­cus on cus­tomers.

The qual­ity of the soft­ware that In­dian en­ter­prises use to ad­dress fre­quently chang­ing busi­ness and cus­tomer needs will be crit­i­cal. Also, firms in­creas­ingly re­quire busi­ness-driven con­sult­ing and de­liv­ery ar­range­ments with their ser­vice providers to re­spond to cus­tomer needs.

We ex­pect the ser­vices and soft­ware seg­ments which ac­count for 17 per­cent and 21 per­cent of the IT spends of In­dian or­ga­ni­za­tions to grow at 13 per­cent and 11 per­cent in 2014.

In par­tic­u­lar, BI and real-time an­a­lyt­ics, se­cu­rity, pub­lic cloud, mo­bile ap­pli­ca­tions and big data will be the hot spots in 2014. On the ser­vices side, IT out­sourc­ing, con­sult­ing and sys­tems in­te­gra­tion will lead over­all tech mar­ket growth.

What it means

As or­ga­ni­za­tions face pres­sure from dig­i­tally-em­pow­ered cus­tomers to re-de­fine their en­gage­ment mod­els, CIOs will start to re-eval­u­ate their ven­dor re­la­tion­ships and add a cus­tomer-fo­cused agenda to their ven­dors’ per­for­mance met­rics.

We be­lieve that In­dian CIOs will be will­ing to as­sume the risk of work­ing with new ven­dors in the mar­ket to fos­ter in­no­va­tion with the aim to de-em­pha­size prod­ucts and ser­vices in fa­vor of busi­ness out­comes as busi­ness re­sults—not prod­ucts or so­lu­tions—dif­fer­en­ti­ate CIOs and their tech­nol­ogy ven­dors in the eyes of busi­ness ex­ec­u­tives.

MAN­ISH BAHL VICE PRES­I­DENT & COUN­TRY MAN­AGER, FOR­RESTER RE­SEARCH

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