TCS, Infy, Wipro beat recession, chart growth strategy
Date: 17-Jun-2010
BANGALORE : The top five Indian IT players have not only emerged smarter out of the recent recession but also managed to raise their profitability and clocked positive revenue growth. The latest Forrester Research report says that these five firms — TCS, Infosys, Wipro, HCL and Cognizant — actually increased their profitability in the past 12 months despite offering 4-6% discounts to their clients in a tough economy.
Says Forrester’s principal analyst Sudin Apte: “To beat the recession, most Indian firms took serious cost-cutting steps such as cuts in salary and variable pay, curbing spend on marketing and long-term R&D and overheads, and even downsizing in a few cases. In addition, as attrition was at a record low, their recruitment costs and annual raises were flat or reduced by 5-7%. Such systematic budget cuts, coupled with tight approval mechanisms, helped these companies cut costs virtually by double-digit percentages.”
While most companies across North America and Europe cut their spending by more than 10% at the height of recession, the Forrester survey anticipates growth in IT spend in 2010 and 2011. In fact, while announcing quarterly earnings recently, two of the five technology majors raised their guidance and gave indications of 4-5% sequential (quarter-on-quarter) growth. The top five anticipate double-digit growth in 2011 and possibly higher than that, with several of them even crossing 20%. Each firm has strategies in place to prosper post recession.
For example, Cognizant plans to take client relationships to a new level in the next 12 to 24 months, based on its stronger domain expertise and consulting skills. In the long term, it wants to leverage its proprietary global delivery methodology — Cognizant 2.0 — to win in new areas such as cloud computing and IP-led solutions like platform BPO.
Posted By : Neha Chaturvedi
Note : If you have anything interesting to share related to your career e.g. my story, interview tips, news etc. mail it to admin@rangrut.com
