Interview Questions

Full Interview with Kapil Dev Singh

Kapil Dev Singh:

The cost-cutting that happened during the recession will continue because the pressure on IT budgets is still prevalent. But in the future that approach could change. The kind of things that IT can do for businesses and the level of IT adoption by enterprises is overwhelming.

That said, in the time to come the sheer ability to spend on almost everything looks restricted for IT. It may look like an act of cost-cutting, but it is primarily being done from a perspective that everyone has finite budgets and you can't do everything that's possible under the sky. Basically, businesses will be selective while charting out IT budgets.

Kapil Dev Singh:

 

The outsourcing business depends on two divergent, though related, factors. The first is the underlying need to 'de-capex' IT investments or reduce direct investments in capital expenditure. Why? Because over time these investments become legacy and can't be done away with easily. The second is making IT more responsive to business needs, and the rapid integration of IT with business in the wake of changing business dynamics. These factors will drive IT outsourcing. The 'de-capitalizing' factor has been driven by the recession, and IT leaders are facing increasing pressure to do more with less and not spend too much capital because these investments will become obsolete anyway, given the rate at which technology is changing. This need has come to the surface in a strong way during the slowdown and favors outsourcing.

Also, as we move ahead, IT-business integration needs will give thrust to IT outsourcing. It won't happen immediately, but gradually as IT users and large enterprises seek different business models and different cost structures. IT outsourcing will certainly grow over a period of time.

Kapil Dev Singh:

One prevalent characteristic I noticed was the resilience many players adopted during the recession. This resilience has come in the wake of a shift from an investment-led paradigm to a cost-reduction paradigm. The pace at which the market plunged was significant and amid all of that organizations still came out with new strategies, new pitches and value propositions for their customers. Organizations are expected to continue to bring flexible because they understand that the market is not going to go back to what it was. Resilience - in terms of responding to fast-changing needs - is a lesson that we have all learnt and it's going to stay.

 

 

Kapil Dev Singh:

The signs indicating a recovery of the domestic IT market are fairly evident. Take the PC market as an indicator. From Q1 to Q3 of 2009, though you will see a year-on-year 'de-growth', you will also notice that the rate of 'de-growth' is slowing. You can say that the fall has been arrested now.

And, in the last two quarters, there has been a noticeable quarter-on-quarter increase in growth. The growth of the PC market, and several other areas in the IT industry, indicate that the slump has reached its bottom and that the industry has started looking up - though the going may be slow. In 2009, we saw the domestic IT market grow in single digits and if this trend continues, recovery is sure.

 

Kapil Dev Singh:

2009 has been a troublesome year for the industry. Domestic IT growth has been slow, showing only single-digit growth rate, but we can expect to see it grow in double digits, that is, 13 or 14 percent in 2010. All the sectors and components will start looking up in the coming year and we can expect some investments as well.

 

Kapil Dev Singh:

If we take into account all the components of the industry, the Indian IT market has not weakened as much compared to its counterparts in the US and Europe. Here in India, the pace of growth of the industry might have decreased but the pace at which it will come out of this slowdown is expected to be much faster compared with worldwide markets

Kapil Dev Singh:

A lag in economic activities always impacts domestic IT markets. The rate at which the economy plummeted was drastic and as the economic situations got graver, the reaction of the Indian buyers and consumers was quite rapid. The sentiment of buyers could be one reason for the slightly elongated growth of the IT industry. Basing ourselves on this, we must rule out the thought that the moment the economic situation becomes rosy, the IT industry will also start picking up. It will take some time to put that confidence back in the industry; it will only come when the economy sustains growth for a longer period.  The coming year seems to hold some promise with projections that the Indian economy will grow between 6 and 7 percent rate.

In 2009, we saw some growth quarter-on-quarter and if this continues for another two quarters that will speed up the upturn. So, somewhere between the second quarter and the fourth quarter of 2010, is when we can project a firm tendency for the IT industry to move up the path of recovery. Today, you can see optimism in the industry but people are still cautious. In the coming year we will see this enthusiasm result in spending and a new business cycle is expected to begin then. IT demand is a derived demand and only when other industries grow can IT grow. Once other industries catch the next wave of economic growth, then IT is bound to grow.

 

Kapil Dev Singh:

Today, IT is available to everyone so IT in itself can't be a source of competitive advantage. It's what organizations do with it and the way they configure it with their businesses that will give them an edge. The focus is going to be on putting IT to innovative use and deriving advantage out of it, rather than treating it as a generic commodity. There's innovation expected in terms of how IT is configured and how it is delivered. The delivery mode is also undergoing rapid transformation. I know various areas where vendors and users are jointly trying to develop unique functionalities for IT that can be converted into competitive advantages. To sum up, the lessons from the slump have been learnt well and now the focus is going to be on how to put IT to use and what kind of competitive advantage the business can draw from it.