COMPETITIVE ADVANTAGE IN ITES REVISITED!!
The big picture is always a summation of n smaller pictures.
Please accept our compliments for the season.
Everyone and their uncle know how TCS, Infosys, .... lean on economies of scale, brand equity of Tata/(respective) brands and generous sales(marketing budgets that are abused to offer exquisite privileges to their clients to curry favours), .. to clobber competition at an excruciating pace moreso, during the slackening demand cycles.
Everything the large ITES do is spread over several geographies, several contracts, several systems, several processes, several individuals and can't easily be pinned down by any watchdog supposed to ensure fair practices; atleast, not too easily.
Personally, I've no lost love for the large aggregators of information technology enabled services(ITES) delivering fungible services and have actually been at their receiving end, more often than not.
Nevertheless, I ain't dumb to be too crestfallen and confuse my personal setbacks with systemic issues.
Also, I appreciate the fact, how self-interest is the only driving force in freemarkets.
Infact, when I probed deeper, it became evident to me, the large aggregators of ITES do a net disservice to the society and harm more interests than those they actually serve, in the name of digitization.
So, nothing would bring me more joy than seeing the moats of the giant ITES providers come unstuck and vapourize.
Hence, here are my limited inputs that could help potential disruptors eat into the turf(marketshare) of TCS and others like them.
1. Certainty of delivery further cemented TCS's position in the marketplace. This certainty must be replicated and assured outside TCS, for starters. C'mmon, Infosys, Cognizant and many others have indeed managed to get there despite their humble beginnings.
2. Cognizant is verymuch a clone of TCS. Yet, even Cognizant seems to have hit the glass ceiling.
3. The presence of Tata group in diversified business(both relevant and irrelevant) verticals seem to have aided TCS to a great extent from bandwidth perspective. Even generous healthcare benefits offered to TCS employees and their family.
4. Personally, I have been pinning my hopes on the SAAS based business model of NewGen software and others like them to usher in some serious competition.
5. Robotic Process Automation and the likes offered only superficial advantage and actually overcomplicated processes and inflated cost, sooner than later.
6. Fortunately, cloud based deployment of ITES services have been a saving grace and a true market disruptor in terms of equal of opportunities.
7. Some years back, implementation of SAP ERP by Bata India and other ERPs by other clients turned out to be a colossal failure and had to be rolled back. Hence, capacity to arrange necessary manpower and experience of the vendor to implement such large-scale ERP solutions started getting greater priority.
8. Be that as it may, SAP worked well for Amul and their usecases are testimony to the success of SAP in optimising the productivity of livestocks through sensors(even, if the livestocks themselves ended up being treated like machinery in a factory 🤣).
9. Indeed, TCS has lagged far behind Accenture on EVA per employee.
10. Yet, TCS managed to overcome the challenge by keeping their operations cost(lease rentals, employee cost, .. other overhead costs) lower than competition.
11. End of the day, I'm pinning my hopes on the disruptive forces that level imperfections in a freemarket; atleast, in the long run.
12. I'm not against outsourcing per se. I'm against the unmitigated mediocrity unleashed in the market by those offering ITES at a large-scale like TCS and perpetuating mediocrity to stratospheric heights.
13. NASSCOM is funded largely by the large ITES companies and is unlikely to sidestep the interests of large ITES companies for smaller companies in ITES business.
14. Hence, the smaller ITES businesses need to pool in their sales and marketing budgets and other resources and have an equivalent of NASSCOM exclusively for themselves, to stand a chance again the Goliaths of ITES business. Else, we'll continue to have more of the same and the same set of winners would have the cake and eat it too.
15. I shudder to think, what a cascading effect a deep recession in developed markets would unleash or geopolitical events or a summation of both?
16. Already, employment rate in the USA is slipping particularly in the social media space and hence, the compulsion to hire locals in ITES and those on direct payroll.
17. On the flipside, employee retainment challenges have eased for all ITES businesses.
18. Personally, I haven't been yet able to wrap my head over the sustainability of ITES businesses exclusively around the opportunities in the data analytics space.
Example: Latent Analytics, ..
19. Even the business models of 'Route Mobile Ltd', Tanla Platforms, .. , Happiest Minds, .. continue to fox me from a sustainability/viability ... perspective.
20. Nevertheless, Coforge seems to be getting many things right, to me. Also, LTI, LTTS, KPIT and Tata Elxsi.Yet, they continue to remain in business and continue to grow at an industry leading pace.
21. Of-course, all small-caps embrace mediocrity as time goes by. However, it's serious competition and fair business practices alone that can keep everyone undercheck.
22. While I've my reservations on militant trade unions, those like tait.in have become indispensable on account of the state of labour courts in India.
23. Of-course, tait.in and those like them are maximizing their own interests and nobody elses'.
Cheers. Merry Christmas. 🌲⭐🌲⭐⭐🌲⭐🌲⭐🎅🎁🎁🎁🎁🎁🎁⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐
website: ingenuityhandle.com
e-mail: protonmumbai@protonmail.com