Looking up. Robust deals, solid margins, key to recovery of IT-BPM industry: Nasscom Chairperson Rekha Menon

As the apex body for the $194-billion Indian technology industry that contributes roughly 8 per cent to the country’s gross domestic product, Nasscom plays a crucial role in supporting India’s socio-economic growth agenda. Being the Chairperson of Nasscom is a huge honour, and as the first woman Chairperson, I hope I can inspire more women in the tech industry to aim high and pursue their ambitions.

With the pandemic-induced acceleration of digital adoption, the industry is well on its way to achieve the $300-350 billion growth target for the next five years, and my focus is to strengthen the levers that will drive our leadership in the digital economy and catalyse innovation — ecosystem collaboration, the right policy environment and becoming the digital talent capital of the world.

The technology industry has proven its ability to grow and transform and remain resilient in the face of challenge. With the health and safety of our people as our guiding priority, we have transitioned to a hybrid operating model, ensuring that we continue to deliver on our commitment to customers even through the most disruptive periods.

The pandemic has accelerated technology adoption, and has led to a mindset shift among clients, which presents tremendous opportunities for future growth. To realise these, the industry is working with government to ease policies such as around remote working and data utilisation.

While the industry continues to work from home, data remains a treasure, and a well-positioned data strategy will help protect businesses and consumers.

We also need to pay urgent attention to upskilling our talent in key areas of growth like cloud and AI.

The pandemic has been a reminder that agility is critical to resilience, and as an industry we weathered the crisis better, and emerged stronger because of the investments we made in a world-class BCP infrastructure that was agile and adaptable by design. The industry was able to accelerate digital adoption across sectors with focus on automation and AI-led transformation, leading to a strong demand and even stronger deal pipeline.

We believe that with an enhanced focus on people-centric innovation, trust-based collaboration, a conducive policy framework, accelerated go-to-market strategies, unified talent focus, and adaptability to hybrid work models, growth will accelerate.

The Indian IT-BPM industry is witnessing a strong recovery, returning to pre-Covid level growth, with robust deal pipelines and solid margins, despite a sudden and strong reset. Our revenues grew 4.3 per cent quarter-on-quarter and 19.5 per cent year-on-year with digital being the key driver, with consistent sequential and Y-o-Y growth across key markets. We expect this growth to continue on the back of global GDP growth and uptick in technology spending.

Technologies like AI, IoT, Blockchain, 3D printing and Robotics can play a transformative role in the country’s socio-economic growth by driving a step-change in democratising basic services like healthcare and education and making them more efficient, affordable, and accessible. They can also unlock the tremendous value trapped within the country’s manufacturing industry and supply chain, while creating new opportunities for growth across industries by enabling business model innovation at speed.

For example, Open digital ecosystems can unlock more than $700 billion worth of business opportunities for India by 2030 across sectors such as healthcare, agriculture, MSMEs, education, Technologies that are data & digital driven and enable rich experiences and outcomes at scale are the need of the hour.

Covid-19 has accelerated digital adoption across industries, and technology service providers are witnessing a sharp growth in digital deals. The demand environment for technology and digital continues to be very healthy, with a strong deal pipeline, as demonstrated by the last quarter results of industry majors. Pricing is stable for the industry and companies are increasingly investing for growth through expanding its talent base of skilled talent, building products and platforms or acquisitions.

We continue to be a net hirer and expect hiring to continue at a similar rapid pace. As per our CEO Pulse survey conducted in May 2021, nearly 90 per cent of tech companies in the country are looking to expand their workforce in 2021. The top companies alone are planning to add more than one lakh people this year. Also, the year 2020 witnessed lower hiring due to the pandemic and industry bench utilisation is at an all-time high.

The combined factors of high demand and muted 2020 is leading to increased attrition in the short term, similar to past growth cycles. The industry is focused on expanding the supply of talent and is doing this through multiple ways – more fresher hiring, upskilling at speed and scale, alternate talent pools – talent from smaller towns and women that had exited the workforce and university partnerships etc. The talent pool expansion will help mitigate the attrition cost challenge.