Indian IT has decisively established itself on a global scale. From generating relatively modest revenues of $4 billion in 1998, it has grown to contributing a colossal $70 billion to India's economy, employing upwards of 2 million people. Today, Indian companies are providing their global partners with knowledge, technology, processes and infrastructure that gives them a sharper edge so that they can compete successfully.
But the story of Indian IT has just begun. Indian IT can grow to become the dominant global IT brand and demand premium — just as Germany does for precision engineering and Switzerland for watches. To achieve this, we need to continue to work on creating innovation, building appropriate talent, investing in brand and devising business models that the world is hungry for, on the strong bedrock of quality and excellence.
The recent economic reset has provided us with an opportunity to re-think and redesign our business models, which can help us deliver the talisman of our industry "delivering business excellence". One of these "new ways of doing things" is non-linearity. Traditionally, revenues of IT services companies have a linear correlation with their workforce.
While this is how the IT services industry has grown in the past, there is much to be learnt from more mature industries like manufacturing where automation and process-centricity has meant that this linear correlation has been broken long ago.
In fact, the investments manufacturing companies make in their processes and product R&D differentiates them from their competition. I feel a similar analogy will be true for IT services industry and Indian IT companies need to invest to build non-linear business models.
In IT services non-linearity is built on the three pillars: innovation in delivery and business models, automation and reusability, productised solutions and services. The predictability in delivery process that non-linearity brings in, not only helps address customer pain-points but delivers services at competitive price. The impact of non-linear solutions on client business is pronounced as most-often the solutions are based on "best-in-class" practices. And this is quite different from optimising a legacy process. From an employee perspective also, as we automate work, we can train people to move up the value chain, thus giving them a better career path.
At Wipro, we started tracking non-linear revenues two years ago and driving non-linearity is an integral part of our strategy. Today, 11% of our business is non-linear which has grown from 3% just 24 months back. We see it as a key driver for profitability and we are investing significantly in building a suite of differentiated services that leverage non-linear models.