Abandon old IT business models
VENGUSWAMY RAMASWAMY Global Head, iON TCS
The year 2013 proved that cloud computing was no mere buzzword. We have crossed the phase when we needed to educate customers about the benefits of the cloud. Today, customers look at the cloud as a valid technology option.
Another trend in 2013 was the commoditization of mobility. Mobile apps are fast becoming a mainstream channel for computing. Business applications are increasingly being ported to mobile, and in the process many applications and business processes are being redefined.
Then there is the increasing importance of the social data which has accumulated on the Internet. Specializations are emerging in how to translate this data into business value, big data being one such stream. Listening posts on the Internet is a key development that feeds the true impression of products and services.
Learnings for channels
For IT channels, the key learning lies in abandoning old models of the IT business. Selling on-premise software with expensive hardware is going to hit back on channel reputation when there are clear cost-benefits associated with cloud options.
Cloud, mobility and big data are all connected within a technology ecosystem. Channels need to embrace this ecosystem and make a portfolio of offerings. Customers today are more educated and expect time-proof solutions. This means a different methodology for selling IT. Channels need to leverage partner ecosystems and liaison, sometimes at the cost of cannibalizing their traditional services.
I would recommend two key principles for the channels. First, align with companies which are driving a change in the market with services that benefit the customer’s customer. Second, remember that the value to your customers is not just in trading a product or service but in building a niche value on top of what you trade.
The economic outlook is certainly good, and the IT industry will grow in tandem. While the economic growth rate has been sluggish, there is a high degree of optimism. Organizations are not shying away from advertising, campaigning and spending on technology.
Tech spend is typically being driven by firms wanting to increase their productivity without increasing their workforce. At the same time, small firms are gearing to scale up, and are employing technologies such as ERP.
Channels should align with companies which are driving change with services that benefit the customer’s customer. The value offered to customers is not in trading a product but in building a niche value
One of the most important market trends that will drive the consumption of IT is the growth of international trade. Domestic firms are increasingly dependent on foreign markets. Some sectors like pharmaceuticals are thriving on above-60 percent exports. Businesses driven by international trade are increasing the demand for IT sophistication to stay connected with their counterparts and manage overseas operations.
The second important trend is mobility. Businesses have started seeing mobility as a means of fast decisionmaking by remaining informed. New gadgets and apps are becoming mainstream computing media.
The next one is B2B growth. Small firms are looking beyond efficiency. They are also looking at better ways to connect with suppliers for better cost advantages. On the demand side, they are looking at alternative channels to sell. B2B technologies and B2B channels will be the next wave of business innovation.
Traditional forms of computing under-utilize the business potential we see today. Besides, customers are tech-savvy and expect us to suggest time-proof solutions.
SIs need to develop competencies to leverage the ecosystem of technologies. The ability to connect cloud solutions and devices into a chain of business processes is the key competency in demand today.
The challenge is in abandoning traditional services which may get cannibalized as channels move up the value chain. But this challenge is also an opportunity.
GLOBAL HEAD, ION, TCS