Majority of Indian IT-BPM firms at an initial stage of IP development: Report

Rajesh Kurup Mumbai | Updated on February 12, 2014

Majority of the Indian Information Technology-Business Process Management (IT-BPM) firms are at an initial stage of Intellectual Property (IP) rights development. The Indian IT-BPM firms, whose growth was initially driven by the cost advantage over North American and European destinations, have only achieved limited success in IP rights, according to a report by KPMG-Nasscom. 

“In the past decade, Indian firms have acquired the scale and skills necessary to deliver large scale, complex transformation projects. However, the vast majority of these projects are linear in nature, with their revenue directly linked to resources,” it said, adding most Indian firms are at an initial stage of IP development. 

The IT-BPM industry spending is projected to reach $221 billion by 2020, with a 10.8 per cent annual growth rate, from the present $108 billion. 

Creating, managing and monetising IP is expected to drive the Indian IT-BPM industry in the coming decade, the study launched at the Nasscom India Leadership Forum 2014, said. 

The industry is searching for its next big growth engine and technology leaders agree that the next phase of business models could be driven by the rise of Social, Mobile, Analytics and Cloud Services (SMAC) and the convergence of technologies. 

To effectively utilise these trends, it is imperative for IT-BPM companies to take a deep dive towards IP management, it added. 

“While the growth momentum is with Indian IT industry, to sustain it would require a paradigm shift. We can no longer solely bank on delivering cost-effective quality services. The changing dynamics and business models demand co-creation with clients resulting in proprietary products for Indian Technology Company which in-turn will deliver better value to end consumers,” said Gary Matzusak, Global Chairman, Technology Media & Communications at KPMG. 

“With this back-drop, it’s safe to conclude that the next chapter of the Indian IT story will be written by organisations who are not just able to innovate but also bring to life intellectual property,” Matzusak added. 

According to the report, there is a growing need for more breakthrough technologies and product-oriented outlook in India. Collaboration with various components in the IP ecosystem like educational system and investment systems also is of crucial importance. There needs to be an improved innovation culture to break through the services mindset including better promotion for R&D in India and clarity on IP protection laws. 

The key challenges that Indian IT-BPM companies face include talent management, lack of opportunity identification and issues with the legal ecosystem, while IT-BPM firms are also exploring various avenues for commercialising their IP – these include licensing IP, spin-offs and joint ventures.

Published on February 12, 2014

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