Amid fears that the Indian information technology (IT) industry has not kept pace with rapidly evolving technologies, executive search firm Head Hunters on Sunday expressed optimism that top firms like Tata Consultancy Services (TCS) and Infosys will lead the digital segment.
However, it will be a long-drawn battle as global players like IBM and Accenture, which had invested very early in digital capabilities, command a lion's share of the market, according to Head Hunters India Founder and Managing Director (MD) Kris Lakshmikanth.
"Amidst fears that Indian tech companies haven't kept pace to make the shift from traditional to cutting-edge technologies to meet customer demands, I firmly believe that our top companies including TCS and Infosys, just as they made India the outsourcing global giant, will lead India in the digital business too," Lakshmikanth told PTI in an interview in Bengaluru.
He added that industry captains like TCS' N Chandrasekaran, Infosys' Vishal Sikka and Tech Mahindra's C P Gurnani had clearly understood this dramatic change and the challenges of going digital more than two years back.
He also said Indian IT companies have increasingly been shifting their focus from labour-intensive projects to more hi-tech virtual needs like cloud computing, automation and artificial intelligence.
Though he pinned hope on Indian giants succeeding with their deep pockets, Lakshmikanth said it would be a long-drawn battle.
Giving reasons, Lakshmikanth, quoting from HfS Research data, said of the 371 deals of IT companies that the firm tracked in 2015, 137 were digital deals and over half were clinched by global IT service providers, including IBM (45 deals) and Accenture (16).
India-centric service provider Cognizant clinched eight deals, followed by Infosys (5), TCS (4) and Wipro (4).
"This trend has remained the same in 2017 too, where IBM and Accenture continue to win most deals. They invested very early in digital capabilities and have been able to take the lead," Lakshmikanth said.
To grow the digital business, Indian companies will have to look at not only building that vision organically, but also through non-organic opportunities to allow them to scale, he said.
Indian IT giants should be interested in acquiring companies that have customers in the US and are focused on new knowhow, he added.
On the other hand, though they have been sitting on piles of cash, they have not been open to digital acquisitions like Accenture, which made significant acquisitions in digital space — Karmarama and Mobgen in 2016, Lakshmikanth said.
To win digital deals, Indian companies also need to invest in business consultancy to build a consulting brand for themselves, he said.
"Our consulting business is nowhere close to that of IBM or Accenture. These companies have traditionally advised their clients on technology, on business - an advantage which we don't have," Lakshmikanth said.
Infosys had acquired Lodestone, a management consultancy firm, in 2012. But it was only in 2015 that the company decided to merge Lodestone with its own small consultancy business and bring more focus to the consulting practice, analysts say.
Lakshmikanth said Infosys, which has decided to hire 10,000 Americans in the next two years, would deploy human resources skilled in digital and business consultancy space.
"I expect Infosys doing this, because it makes business sense. Because, local professionals will have better understanding of customers' digital and consultancy demands," he said.