One of the positive outcomes of the tough market situation is that it has impelled companies to re think their go to market and candidly examine if they really do have a solid value proposition. Perhaps with the general slowing down, and hence perhaps less frenzied approach to selling, management has had the time to sit down and think hard, or, people have realized that if they can sharpen their market focus ( and hone capabilities now) it will stand them in good stead when the market looks up. Either ways, such an exercise can only help companies going ahead.
Now, doing such an introspection does not mean, as most think, making dramatic changes to your offerings, or shifting your focus areas etc. On the other hand, it often entails mapping your capabilities to the market need and taking an “outside-in” approach to addressing the market. It may also need you to stitch together all your capabilities to create solutions through which you can demonstrate a measurable or real business impact.
I met with a company recently that had done a neat job of integrating its capabilities into some interesting revenue enhancing possibilities for its target customers.
Another way to sharpen GTM is to localize your approach for different regions / countries. Here again, it is more about customizing your solutions and your message to make it more relevant to that market.
One pattern we have seen is that many emerging companies have noe taken a dual market approach- they target the US and India.
Third, there is a genuine interest in trying out online marketing initiatives. Online marketing is one of the best (and obviously cost effective ways) to try out focused campaigns and messaging.
If you have looked at Accenture’s Q1 09 results announced a few days back, what stands out is the sharp dip in new bookings in their outsourcing business – 45% QoQ and 12% YoY. What is more – this is the lowest in the past 5 quarters. This clearly indicates the way of things to shape in the next few quarters.
How will this impact service providers? We keep hearing about decisions being postponed, price negotiations and project cancellations. To address these challenges, Service providers will have to find creative ways to win and retain clients. TCS for example has offered free transitions and volume discounts to win large contracts. It has won 38 large contracts in the last 18 months and is reported to have 20 more in the pipeline.
In conclusion, the short-term looks gloomy and this period will distinguish between the haves and have-nots in a business context.
I was catching up with an analyst-friend recently and finding out how he is reading the current business environment. Needless to say, the recent Mumbai attacks have added to the woes of Indian It companies, with customers postponing trips, re-evaluating closure dates etc.
With regard to the overall situation, like everyone else, he too felt that we are in for a prolonged period of weak demand, and hence opined that the larger companies with deeper pockets would be able to tide over better.
Which brought us to the topic of niche players, who were some years back, the flavor of the season. Every industry watcher and strategist recommended that if you don’t have scale, then develop a deep specialization.
In principle, I still believe that this holds true. However, companies have probably faltered in its implementation. So, what transpires is that niche players do the hard work of exploring new areas and trying to build capabilities ( which are unfortunately not deep enough, or unique enough), and in some eays, create a market opportunity, and when the opportunity becomes serious enough, the scale players just swoop down and grab the space.
Take independent testing or IMS, today the Infosys’, Wipro’s and TCS’ have much larger practices in these areas than any “pioneering” niche player.
The solution or way forward therefore in my view is not to abandon the niche strategy but to try to build a genuine differentiation in your delivery capability, and anticipate that competition will come by eventually, especially from the big players.
This is espcially critical, and probably that much more challenging, for services companies.
In periods of unprecedented uncertainty ( like we are experiencing now), businesses are often at a loss on how to tackle the market. This results, very often, in knee jerk reactions, short sighted decisions and a spray gun approach to business acquisition.
Here, I would like to quote what I have heard Mr Narayana Murthy say ( and practice) many times- deal with what is within your control, and do not lose sleep over what is not. So, if we look at today’s situation, it is anybody’s guess as to whether we have seen the worst of it yet. And, there really is no point in speculating over this – but, this topic is what dominates conversations and occupies space in our head.
Instead, now is the time to look at streamlining operations, putting in place long term measures to tighten processes ( rather than just instituting short term cost cutting programs), and building capabilities. Likewise, now is the time to build deeper relationships with customers, demonstrate in as many ways as you can that you will stand by them in tough times, and sharpen your market focus and invest smartly in marketing.
Simple as it may seem, doing this is not all that straight forward. It requires tremedous discipline and commitment to keep your focus on what is within your control and not fall prey to the distractions around you.
This has been our own experience at Prayag, as well as with some of our clients, who have been discerning enough to stay with initiatives that they believe will give them returns in the long run.