The IT industry seems to be coming out of the woods, with Nasscom saying the sector grew 9.2 per cent in FY19 against the forecast of 7-9 per cent. This is the highest growth recorded by the sector in the last three years though still short of the double-digit growth seen before 2014.
This growth is attributed to companies in the $169-billion sector starting to take to digital transformation and use automation and bots. Digital grew 30 per cent on a yearly basis,raking in about $33 billion. The growth was also aided by some tailwinds that aided the highest tech spending in the last five years.
Even as the industry is looking up, Nasscom, in a departure from the past, did not give any guidance for the coming fiscal. This follows some of the large IT services companies observing recently that the existing metrics may not be relevant.
Rishad Premji, Chairman of Nasscom and Chief Strategy Officer at Wipro, said at the Nasscom Technology & Leadership Forum here on Wednesday that the scrapping of the forecast was not related to concerns about growth, but more of a philosophical shift.
What started out as a benchmark for the IT services industry gradually added other related industries such as global R&D centres (based in India), start-ups, e-commerce and BPO services, each of which has its own growth trajectories and challenges, rendering a consolidated benchmark largely meaningless. “We used to keep an eye on it, but it was not a real indicator,” said a senior VP from a mid-size company. A CEO of an outsourcing firm said that they were relying on internal metrics. “We are looking at a whole new set of indicators and have to look at the future through a new lens,” said Debjani Ghosh, Nasscom President.
As this change plays out, and in the backdrop of global happenings such as Brexit and US-China trade wars, Nasscom has held back on any projection and prefers to be “cautiously optimistic”.
Meanwhile, according to a survey done by Nasscom, global economic uncertainties are leading to a cautionary outlook among CEOs. But they expect digitisation initiatives to continue at the same momentum. Almost 90 per cent of the CEOs said 2019 will be similar or better than 2018 for hiring.