I do not think the industry is going to be constrained by demand. Customers’ expectations are going up. We are, in fact, adding processes. SOM MITTAL, PRESIDENT, NASSCOM
Som Mittal, President, Nasscom, has a tough job on hand. He needs to promote the interests of the information technology industry in the backdrop of global economic uncertainty, high US visa rejection and increasing pressure on quarterly numbers.
However, he is confident that the industry, with its strong fundamentals, will be able to weather the current economic turmoil.
At the Nasscom HR Summit held in Chennai recently, Mittal spoke to Business Line on issues concerning the industry.
Excerpts from the interview:
How confident are you of the IT industry achieving 11-14 per cent growth?
Today, there are companies growing faster than that. Some have given a lower guidance, but we feel that one quarter is a dot and two quarters is a straight line. We need at least three quarters to arrive at a trend. We can review the numbers in October, by which time the trend from three quarters will be available.
Some of your member companies are worried about growth numbers? What are your views?
Despite the economic downturn and uncertainty, we are seeing growth. This is an indication that there is a huge market to tap. We need to penetrate the existing market and open up new verticals.
I do not think the industry is going to be constrained by demand. We are not talking about this quarter versus the previous quarter or something happening in Spain. We must look at a two-to-three years’ perspective with regard to to jobs.
How is the demand for business?
There is continued demand. However, there are changes happening. Customers’ expectations are going up. The industry is looking at how it can remove repetitiveness from the job.
Many things that are repetitive are being replaced by platforms to ensure consistent delivery. Today, even at an early stage, jobs are becoming high-end. What an entry level person did ten years ago, we now have a platform to deliver it.
This person may have to develop the platform, which is a high-end job. In the lower end too, jobs are changing. It is not just about technology; it is about finding a business solution. While technology will be the underlying carrier, there are other factors such as domain expertise.
This means, the industry needs a different type of talent?
Yes, the industry is not only going to attract people with expertise in technology alone; it also needs people with knowledge of finance, healthcare and utilities. Nearly 70 per cent of product development pertains to creating software, simulation and prototypes.
People are using technology to deliver, rather than develop only technology.
The expectations of the people are increasing because of what we expect them to do. Opportunities still remain high. In our industry, we have been a preferred employer and I think this is driven by demand from both domestic industry and international markets.
What are the drivers of technology spending?
Uncertainty is high. The assured visibility is no longer there. This does not mean the pipeline is not there. We have the order book. When and how it will be delivered is the uncertain part.
We actually run people’s businesses — BPO, IT and infrastructure, processing and end-to-end supply chain. Despite the slowdown, the demand remains. We are, in fact, adding processes.
Do visas continue to be a concern?
We have resolved the visa issue with Australia, the UK and Switzerland. When there is a downturn and there is local unemployment, visas become an issue.
We have been successful in conveying the message that we are a part of the solution and not the problem. Today, globally, there is a shortage of STEM (science, technology, engineering and mathematics) people.
Globally, there will be unemployed people who do not have the right skills, or may not be in the right place.
While the UK has put restrictions in every other visa category, on the intra-company format it has ensured that the right people with right skills are coming into the country. The same has happened in Australia.
What about the US, which is critical for the industry?
In the US too, there are various visa categories; our issue was on the rejection rates, which arose due to interpretation of certain clauses.
Our government has taken up the issue and the US government also understands this.
The US is to come out with new guidelines, which are likely to be debated. For example, how does one judge if a person has specialised knowledge?
However, visas are not a show-stopper. It is a hurdle that businesses have to cross.
Today’s business model needs to tap talent anywhere in the world. We are hiring people in the US; we need domain experts and we are creating jobs.
Given the economic uncertainty, the visa issue will certainly be an area that we need to continue to work on.
Have the recent legal cases against Indian IT companies affected the image of the industry?
I don’t think so. Our companies are very responsible and we, as an industry, do not condone frauds. I think laws of the land are supreme.
Some of the issues overseas do not merely apply to Indian companies, but hold true for all foreign companies.
The rejection rates and the interpretation of laws are as much applicable to American companies that use the same model as Indian companies.
Recently, on the visa rejection issue, 70 American companies sent a letter to the American President, and they were not IT companies, but majors such as Ford and Caterpillar.