Nasscom to look beyond revenue growth for its annual IT forecast
BENGALURU: Nasscom, the group that represents software and services companies in India, will consider metrics beyond revenue growth at each of its member firms while giving its annual revenue growth forecast.
Nasscom chairman Rishad Premji said that the lobby group is currently assessing several qualitative and quantitative parameters, with another Nasscom executive adding that the new methodology will be implemented from 2019-20.
Many analysts and executives have argued that since Tata Consultancy Services (TCS), Infosys and Wipro now account for 23% of the country’s $167 billion IT industry, and are also embracing newer technologies, it is unreasonable to expect the big three companies to grow at a pace simiofferings, lar to much smaller firms.
Some of the large firms are also unhappy at being benchmarked against Nasscom’s industry growth forecast that is based on the aggregation of revenue growth estimates of each of its members, many of them much smaller firms.
The change in Nasscom’s approach is reflective of the transformation sweeping through the industry. “As the industry is rapidly transforming its business models and solution only a revenue-based metric may not be an adequate reflection of the industry outlook and performance. Nasscom is assessing what the different parameters—qualitative and quantitative—that can be published to reflect the changing nature of the sector,” Premji said in an interview last week.
Nasscom has, however, ruled out defining digital, the fuzzy umbrella term used by companies to classify revenue generated from areas generally classified as social, mobile, analytics, cloud computing and Internet of Things, as it believes it is not practical to have a standard definition.
“There are many ideas being discussed. So obviously, for all companies, digital is growing, and that is one metric which will be looked at,” the Nasscom executive cited earlier said on condition of anonymity.