North America is struggling to keep pace with the recession and its prolonged effects. Europe is already down with recession flu and there are no signs of recovery anytime soon.
The effects on this prolonged effect on IT industry in India will be of different kind than what was seen in the 2007 recession. It was job cuts all across with salary stagnation and nothing was moving. The focus was on reducing cost and stay put. However this time, it appears that the changes are going to be more prolonged or even permanent in nature.
Affluence of west seems to be getting challenged permanently and value for money would eventually prevail. This would simply mean that while business would not stop or slowdown, it is certainly going to be more value oriented.
IT Industry in India will have to cope up with providing the end customer with more value for the money than just giving them cost reduction. Businesses are going to ask the service providers as to how they can help them do their business better and generate more savings and profit.
“ IT Industry in India will have to cope up with providing the end customer with more value for money than just giving them cost reduction. “
How they can get more customers and how they themselves can be more valuable to their customers. The days of rampant consumerization is coming to an end the time for value purchase is becoming the permanent way of life.
Gone are the days when consumer would keep buying just because he had a lot of money and was hooked to changing style and fashion as if there was no tomorrow. Now, everyone will think twice and question as to why one should buy.
Indian IT companies have so far only been identified as low cost destination for IT services. Almost none of them here have been able to demonstrate real value to the end customer what Apple or Microsoft have been able to do. This will push them more with pressures on their margins and would pitch them against those companies who can bring better value to business than just cost reduction.
While, it is evident that in short term, business might grow for Indian companies, however the long term is bleak as they seem to be out of the value race already. It is high time; IT companies in India start thinking differently and not just focus on manpower supply alone.
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