The recession is now in full swing. The spectacular growth story of Indian IT companies is under threat. While they are hoping to ride this out, they are being cautious with their own capital spending. These already fiscally-conservative companies are turning more conservative with hiring freezes, pruning of staff, limited/no pay-hikes, restrictions on travel and other misc expenses.
While keeping the existing clients is of paramount importance at this juncture, are there opportunities to find new business in these harsh conditions? Here are a few common-sense pointers.
Capital-intensive Industries Are Hurt
This is an equal-pain recession in that (unlike the dotcom bust), this is hurting every sector across the board. Of course some industries are suffering more than others. In these times of credit crunch, any industry or business that requires a lot of capital is in trouble. Telcos who are usually very capital-intensive are struggling. Manufacturing in general and automotive in particular is reeling. Retail is up in smokes due to people’s aversion to spending. By extension, anyone in their supplier-partner ecosystem is going to get hurt too.
So, the trick is to separate out these industries from the ones that have light-capital requirements and go after them. It doesn’t matter if you double your salesforce in hard-hit industries – you would still not double your sales. The key is to reorganize the salesforce into focusing and selling into industries that aren’t capital intensive.
Free/Cheaper Stuff Rules The Day
Another common sense thought is that everybody is looking more bang for the shrunk buck. Case in point – the number of unbelievably great deals one found this Thanksgiving! Companies looking to use IT services are no different. They are looking for bargains and deals. So, provide cheaper options. A recession like this also provides opportunities to change some pre-conceived notions. A customer that had earlier rejected a set of services may be receptive to using the same services now. Some ideas:
- Pre-configured Solutions – Solutions such as SaaS, Platform-BPO that have subscription models are more relevant in tough times than in better times because of less upfront cost to firms. Usual concerns about data security may be better overcome now than before.
- Open Source Stacks – Cheap stuff. Need I say more? Again, as long as there is a decent open-source option, customers are more eager to evaluating them now than they were before. So, build and sell these skills.
- Loyalty Opportunities – You may have many friends but the special bonds that you built with people are the ones that stuck by you through lean times. This is the perfect opportunity to build lasting relationships with existing and potential customers by lending them a hand. If it means agreeing to delay the invoices or throwing in free services on top of service agreements, do it. It will all stand you in good stead when the good times roll in.
Poaching from Competitors
Tough times bring a lot of introspection. A lot of companies that may be using your competitors may be in the same situation. May be they are not happy with the service. May be there are just looking at a cheaper option. Whatever the reason may be, you won’t lose anything by just checking in with them about the possibility of a switch.
Ride It Out
Its the first time Indian IT companies are tested at this level. How they come out of this will show the maturity of these companies. Just trying to ride out the bad times is one thing. But I’d be disappointed if they didn’t come out stronger with at least a few new differentiators that they didn’t have before. Extra-ordinary times provide extra-ordinary opportunities!
