Man Veer

Branding strategies for IT companies 2008

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BRANDING STRATEGIES FOR IT COMPANIES

An employee perspective

A dissertation submitted in partial fulfillment of

the requirements for the award of MBA degree of

Bangalore University.

Submitted By

Mr.Mohammed Muzamil Sadiq Reg.No-06XQCM6045

Under the guidance of

Prof.Ramgopal Internal Guide

M.P.BIRLA INSTITUTE OF MANAGEMENT

Associate Bhartiya Vidya Bhavan.

Bangalore-560001

2006-2008


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DECLARATION

I hereby declare that the research work embodied in this dissertation entitled

Branding Strategies for IT companies an employee perspective, has been

carried out by me in bangalore under the guidance and supervision of Prof.

Ramgopal S, M. P. Birla Institute of Management, Bangalore.

I also declare that this dissertation has not been submitted to any

University/Institution elsewhere for the award of any Degree/Diploma.

Place: Bangalore

Date:

Mohammed Muzamil Sadiq


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GUIDE CERTIFICATE

This is to certify that Mr. Mohammed Muzamil Sadiq bearing registration

no.06XQCM6045 has undertaken a research project and has prepared a report

titled Branding Strategies for IT companies an employee perspective, under my

guidance.

This has not formed a basis for the award of any degree/ diploma for any other

university.

Place: Bangalore

Date:

Prof. Ramgopal S.


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PRINCIPALS CERTIFICATE

This is to certify that Mr. Sudheesh K., bearing registration no.04XQCM6100 has

undertaken a research project and has prepared a report titled Branding Strategies

for IT compnies an employee perspective, under guidance of Prof Ramgopal S.

This has not formed a basis for the award of any degree/ diploma for any other

university/Institution.

Place: Bangalore

Date:

Dr.Nagesh.S.Malavalli


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TABLE OF CONTENTS

Chapter No. Chapter Name Page No.

Executive Summary 6

1. Introduction to Brand

management

7

2. Design of the study and

the Methodology

16

3. Review of Literature 20

4. Industry Profile 23

5. Analysis and

Interpretation

54

6. Summary of Findings 63

7. Recommendations 67

8. Annexure 69

9 Bibliography 76


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BRANDING STRATEGIES FOR IT COMPANIES

-An employee perspective

A brand is the psychological and emotional identifier that gives a company value. It is a

strong, consistent message about the value of your company. A company controls the message

through marketing, advertising, customer service, and all interaction with the market.

An IT company with its operations in India and concentrating mainly on the US market

will be urging for a brand value in the US market and in the process tend to ignore the

importance of building a brand image in the home country. Such companies will be under the

impression that brand building within its home country might not bring any direct revenue or add

any new customers to it. This project is an attempt to explore the relevance, importance and

benefits of creating a brand image in its home country for IT companies.

Representative samples of 25 IT professionals from different companies and 25 freshers

who are the potential employees in such companies are randomly chosen and their perception

towards the brand image of the company they want to work with is analyzed. The other factors

like salary, growth opportunity, work culture, job profileetc are also considered.

Finally, after deriving the conclusion that brand image plays a major role in employees

perception towards the company, various strategies are identified and recommended for an IT

company which would help in brand building.


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Chapter 2

INTRODUCTION TO

BRAND MANAGEMENT


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What is a brand?

A brand is a name, term, sign, symbol or design, or a combination of them, intended to

identify the goods and services of one company and to differentiate them from those of

competitors. It is the place you own in the minds of people who matter to you most. It is the

psychological and emotional identifier that gives a company value.

High brand equity provides a number of competitive advantages:

The company will enjoy reduced marketing costs because of consumer brand

awareness and loyalty.

The company will have more trade leverage in bargaining.

The company can charge a higher price than its competitors because the brand

has higher perceived quality.

The company can more easily launch extensions because the brand name

carries high credibility.

The brand offers the company some defense against price competition.

A brand name needs to be carefully managed so that its quality doesnt depreciate. This requires

maintaining or improving brand awareness, perceived quality and functionality, and positive

associations. These tasks require continuous R&D investment, skillful advertising, and excellent

trade and consumer service. Truly effective brand building doesn't start with a series of ads or

press releases; it starts with your employees, the 24x7 "who" behind your brand. Unfortunately,

many companies spend more time, money and manpower communicating externally rather than

internally.

Their "front lines," especially non-management staff, are sometimes clueless about the

brand. Creating a successful brand starts at home. We create strategies and communication

tactics that ensure internal Brand Ambassadors understand and can effectively communicate key

messages to external audiences.


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Creating a proactive integrated marketing program includes all the essential ingredients of

attraction marketing: media relations, sales support, advertising, collateral development,

stakeholder relations, special events and interactive marketing. All these elements, when

combined with an effective strategy, build a strong brand in the minds of external audiences. Our

targeted approach yields the exposure, enhanced awareness and assistance you need to achieve

your business objectives.

Developing a Brand

A brand is a strong, consistent message about the value of your company. You control the

message through marketing, advertising, customer service, and all interaction between your

company and the market.

You don't need to be as large as Coca-Cola to have a brand. Building a brand involves the same

process, whether your company is two weeks or two years old, whether you have 100 employees

or none.

Here is how a brand typically develops:

Define the message.

What is valuable about your company? Why do your customers care? What's so different

about your company? The answers to these questions should form the core statement about your

company's service, product, relationships, and culture: You are faster and have better service

(Federal Express). You have unrelenting, perfect customer care (Nordstrom). Your products are

edgy, new, independent, high-performance (Nike).

Build the image.

How does this translate to your overall image? Both visually and verbally, you need to

consistently communicate the company's message about its value.


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Market the image.

How can you aggressively get the word out? The message means nothing until your

market hears it. Your marketing and advertising campaigns need to communicate the company's

value and establish its image.

Live the message.

Is the message real? Does the customer agree with you? Here comes the tricky, long-term part:

You need to deliver on the implied promise. The customer's experience must match the image, or

the whole house of cards crashes. If you market your company as faster and better but the

customer disagrees, the brand suffers.

In reality, this process is not linear, but circular. Your brand will evolve in response to the

customer and the evolution of your market and products. For example, if you have a small

business or start-up, you may believe that the value of your product and company lies in one

area. As you market your company and product, your customers may communicate that they

value something else. Then your product and company may evolve toward that new value,

bringing you to new markets.

Jagdeep Kapoor, the author of the famous book 24 Brand Mantras has presented 24 action

oriented brand mantras, which will help a marketer develop an effective brand strategy. The

unique feature of these mantras and, therefore, of this book is that they focus on building brands

by appealing to both the rational mind and the emotions. Often, in planning a brand strategy, the

appeal is to only one of these two aspects. For a brand to succeed, it is important that it delight

the customer which can only happen when the brand finds a place in both the mind and heart of

the consumer.


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These 24 mantras are as given below. These are broadly classified as Mantras for the Mind and

Mantras for the Heart.

Mantras for the Mind:

1. To build a big brand, adopt a short brand name

2. Dont let jazzy research replace common sense

3. Use benefit segmentation to build brands

4. Sample to sell ample

5. Dont hesitate to communicate

6. Like salt, use advertising in the right proportion

7. What is visible, sells

8. Brand images are fragile, handle with care

9. Your consumers needs come first

10. Dont under price yourself

11. Brands must make profit, not only noise

12. Focus on consumption rather than purchase

Mantras for the Heart

13. Build relationships to build brands

14. Respect your retailers

15. Avoid generality to give your brand a personality

16. Nurture your brand as you would a child


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17. Service is the first step to a great brand

18. Remember, consumers look for perceived value in brands

19. Dont sell the right product to the wrong audience

20. Pay heed to consumer emotions

21. Dont prejudge your consumer

22. Respect the local consumer

23. Be honest, dont con.

Defining Your Brand

No matter how big or small your company, developing an employer brand is essentially

a two-step process. The first step is identifying what your brand represents. Many startups

cherish the company culture that a core group of original employees has helped create. For such

startups, the challenge is not to create new brands from scratch, but to articulate their existing

brands in messages that can be delivered to both existing and potential employees.

Communicating Your Brand

The second step is to figure out how you're going to communicate your brand to both

your existing employees and potential employees. For startups that lack the resources to conduct

large-scale branding campaigns, developing inexpensive, creative ways to advertise an

employer's brand is essential. It's important to note that retention of and communication with

existing employees is as much a part of brand building as any message that your company sends

to potential employees.

"Retention and recruitment are two sides of the same coin," says Hodes. A company must

make sure that the atmosphere within the company is consistent with the message it is delivering

to potential employees. What follows are a few inexpensive tactics for startups trying to build an

employer brand.


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Unique benefits or office policies.

These are a great way to generate buzz around your workplace. Examples include

allowing dogs in the office, offering discounts to fitness clubs, and providing sabbaticals for

long-time employees. Your policies should reinforce the brand that you are trying to establish. If

providing a good work/life balance is an important part of your company, then you should be

able to point to several policies that allow your employees to achieve that balance.

Employee referral programs.

Employee referral programs can play a valuable part in communicating your employer

brand--both inside and outside your company. Referral programs build morale and help retain

and attract people by reminding employees why your company is a great place to work. Be sure

to emphasize the positives of working for your company along with the financial rewards of

providing a referral.

Awards programs.

Publicly recognizing employees is a great way to reinforce your brand with existing

employees. Create a regular reward program that relates directly to the core values that are

central to your company's success. The rewards do not have to be limited to cash bonuses. Give

gifts that show a personal touch.

Parties.

Even if you can't afford to have a famous musician play at it, a party is a great way to

generate buzz about your company--provided it is well promoted, both inside and outside your

company. Reward employees who take the time to plan your company parties. Emphasize that

the event is both a celebration and a recruiting vehicle.

Sponsoring events.

Sponsorship of events, while somewhat costly, can be an effective brand-building tool--if

the event reaches your target audience. If your goal is to recruit more programmers, make sure

the event you're sponsoring is both interesting to and attended by savvy programmers.

Recruitment website.


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The career section of your company's website should play an integral part of any

branding effort. For many job seekers, it will be the first interaction they have with your

company. Post your company's core values on your website. Profile individual employees and

provide quotes about why they enjoy working at your company.

Here is the 'Seven Steps to Brand-Led Marketing'.

Step 1: Become truly 'Marketing Minded'

When many people think of marketing they think of meeting customers needs.

Understanding and responding to changing customer needs is essential, but there is another

dimension. Brand-led marketing ensures that you meet customer needs in a way that is different

from your competitors. If you can't find this point of difference you're in danger of becoming a

price-based commodity.

Ask yourself: Do my customers really see me as different from my closest competitors?

How/Why? What can I do to make my business more distinctive and appealing to help secure

them as long-term and profitable customers?

Step 2: Monitor the Changing Environment

We live in a rapidly changing world of many threats and opportunities. Few business managers

take adequate time out to stop, look around, and reflect on how these changes might have an

impact. As a result, most companies die young. Ask yourself, at least once a quarter: What are

the changing consumer trends, competitor activity, legislation, economic trends or technology

developments that might have an impact on my business?

Step 3: Have a Meaningful Vision for your Business and your Brand

A business Vision (or Mission) has a number or roles: most important of which are to inspire and

guide. Too many business Visions include words like 'leader', 'best', 'preeminent', 'most

successful'. Words like this can mean many different things to different people. Because of that

they are of limited help in inspiring or guiding the behavior of the business team. Brand Visions

have just the same function. Make sure that you have a written Vision for your brand that is

strong enough to inspire and guide behavior. Ask yourself:

Do I have a brand Vision that everyone understands and has bought into? How might I improve

my brand Vision, so it is a stronger inspiration and guide?


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Step 4: Build Your Brand 'From the Inside Out'

Building a brand is not just about advertising or 'marketing communications'. Nor is it

just about your 'product' or 'service'. Your brand is really what your customers think of you, and

how much trust they have in you. To build a strong brand you have to have a clear idea of how

you want to be thought of, and then consider everything that you say and do.

In everything that you say and do, ask yourself: Will this get me closer to where I want to be in

the mind of my customers?

Step 5: Plan for Success

There is a phrase: "If you don't know where you want to go, any road will get you there".

This is true in life, and it is true in business. If you want to succeed you have to have clear,

measurable objectives - you have to know where you want to get to! Ask yourself: Do I have a

brand plan with clear, measurable objectives? (And am I measuring the things that are really

important!).

Step 6: Become a 'Learning Business'

Continuously improving your brand-led effectiveness is essential to long-term success.

The best way to achieve this is to ensure that you take a little time to become a 'Learning

Business' by building learning into your processes.

For every marketing initiative you undertake, ask yourself: How can I build learning into this, so

that I can find out what works and what doesn't, and do it better next time?

Step 7: Be Prepared to Change

What worked in the past may not work in the future. If you can achieve steps 1 - 6 that's

great, but you have to go one step further. You have to be prepared to change. Don't just do the

same things better, look around for new ways of pursuing your vision and your desired brand.

Explore, experiment and anticipate. Ask yourself: Is there an opportunity to break out, and

achieve a step-change from where I am now?


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Chapter 3

Design of the Study

and

The Methodology


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3.1 Introduction

Each and every company wants to create its own brand image. Now days it is difficult to find a

company which does not try to create its own brand image. The influence of brand name is vast

and wide. It is influence that decides the future course of action for a company. Likewise the

strategic brand management is very crucial for the company. The strategies of the brand

management differ at different level. So the study of the strategic management at different level

is very important for any company.

3.2 Statement of the Problem

Strategies of brand management are different at different levels of corporate planning like

Functional level, Business Level and Corporate Levels. The ways of plans and policies framed

and executed will be different at each level. A strategic decision made at functional level strategy

regarding the brand management will be different from the strategic decision made at business

level and corporate level. So the study of the factors that influence the strategic brand

management is important. In this level an attempt has been made to study and understand the

influence of factors of strategic brand management.

3.3 Title

Brand Building Strategies for an IT company an employee perspective.

3.4 Objective of the Study

To study the influence of various company strategies in brand management.

To understand the influence of brand image of a company in the minds of the potential employees,

To study the importance of brand image for a company.

To suggest some general brand building strategies for IT company.

To understand the Indian IT industry at the macro level.


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3.5 Scope of the Study

The study limits itself to the employees of IT companies in Bangalore. The results of the study

can be generalized for IT professionals across the industry; however, while generalizing it

should be borne in mind that exceptions are bound to occur.

3.6 Limitations of the study

It is a one time study.

The study was restricted to Bangalore city and the findings may not be applicable to any

other geographical location.

Non -coverage error- because of the inadequacies in the sampling frame or design.

Field error- the respondents may have provided the responses, which differ from what is

actually true to correct.

The respondents might be subjected to personal bias.

3.7 Data Collection

Primary data:

Personal interview was conducted followed by purpose specific questionnaire designed to obtain

the data from the respondents.

Secondary data:

Literature available in the field of Marketing, Brand Management and IT Industry was

thoroughly studied. The sources of information are newspapers, books, journals, magazines and

websites.


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Tools for data collection

Questionnaire was constructed and administered to a sample of 25 working professionals in the

IT industry and 25 prospective professionals.

3.8 SAMPLING DESIGN

Sampling technique

Simple random sampling technique was adopted for selecting a sample among working

professionals.

Sample Size

A representative sample of 50 Working & non-working professionals at different levels of

management, holding various jobs, and combination of average percentage for non-working

professionals were selected for the study.

3.9 METHOD OF ANALYSIS

The collected data was analyzed according to the objectives of the study based upon which

suitable suggestions are made. Tabulation method with the help of Bar graph, Pie chart and

analysis is done for each data. The percentage frequency is worked and evaluation is made based

on the weightage given to the data in the analysis process. The conclusion is made on the

findings from the evaluation.


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Chapter 4

Review of literature


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Review of Literature

In describing the three "C"s of branding, William Arruda provides an easy-to-use device

that can help a brand manager ensure that the brand remains focused. In addition to being able to

boast these enviable benefits, strong brands have something else in common. They all exhibit the

three Cs of branding. The three Cs are: clarity; consistency; and constancy.

In a research conducted by Bird, Channon and Ehrenberg (reported in Bird and Channon

1969; Bird and Channon 1970 and Bird and Ehrenberg 1970). They found that 'former users'

were more likely to associate a brand with a positive image attribute than those who had never

tried the brand. This paper extends the findings of their research to a different method of (1)

classifying 'former users' and (2) measuring associations with image attributes. The results

replicate that found in the original study, reinforcing the assertion that an image response is

substantially influenced by past usage. These findings make detecting any relationship between

brand image and future behavior a more difficult task, as the influence of past usage needs to be

taken into account in any analysis.

In the research report conducted by Mark Kobayashi-Hillary introduces India and the

major players in the Indian service industry. He offers a balanced view on the trend to outsource

to India, describing the reasons why a business should utilize India as an offshore outsourcing

destination and the steps needed to find and work with a local partner. Not only does the book

make a compelling economic case for outsourcing to this region, it also discusses how to manage

the entire transition process, including the potential impact on local resources.

Leading global business intelligence and consultancy firms such as Giga, Forrester

Research and McKinsey & Co. have cited various reasons for the increase of offshore

outsourcing by MNCs to India. Outsourcing is expected to grow to at least 23 percent during

2002. India's quality and cost benefit edge is one of the major draws for these organizations,

analysts say. Giga predicts that, compared to other competing countries such as China, Ireland,

Israel, and the Philippines, India will continue to dominate as the preferred off shore country.


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According to a study conducted by Forrester in November, 2004, India's edge over other

competing nations in the IT outsourcing business is based on the country's decade old experience

in this area, fluency in the English language, supportive Government policy infrastructure, and

high quality offerings.

In his book Branding in Asia, Paul Temporal addresses a critical issue in branding

software services. How do you differentiate a company from others when all it does is sell

solutions, which other players are also doing? This question has been dogging India Software

Inc. for more than a dozen quarters now.

According to a Nasscom-McKinsey report, building a strong country brand includes a

distinctive and credible proposition that is consistent with the brand, aggressive and targeted

communication and consistent, aligned execution.

The India Software Inc. brand is a result of the Y2K boom, coupled with the Indian

offshore story. The brand attributes, namely cost-effectiveness and English-speaking skilled

manpower, have contributed to whatever the India brand stands for. A conscious effort in

branding software services started almost two years back, when most outsourcers were having a

tough time differentiating one Indian company from another. As a result, Infosys, Wipro and

TCS were running into each other for almost all major bids. Branding today only means

differentiating and it has become more crucial than ever, says Sangeeta Singh, vice president

corporate marketing, Wipro Technologies

The above findings lead to a conclusion that branding and internal marketing plays a

major role in the success of a company. Branding involves various cross-functional efforts of

Human Resource management and Marketing Management. A company has to be internally

stable especially w.r.t employees satisfactions who are the stakeholders in the company. By

asking your employees directly why they think your company is a great place to work, you can

pinpoint the core aspects of your employer brand that you want to publicize.


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Chapter 5

Industry Profile


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Introduction

The Indian IT sector has proved to be the countrys fastest growing segment, even in

troubled timesin the globally challenging economic environment of 2007. The software and

services industry, a major component of Indias IT sector, showed significant momentum, higher

than that of other industries in the country. India continued to be a compelling investment

destination, as leading companies either set up shop here or beef up their existing infrastructure.

Outsourcing of IT requirements by leading global companies to Indian majors also picked up

pace during 2006-07, in line with worldwide trends.

The performance of the Indian IT sector was determined by its growth in the following areas:

IT software and services exports

IT-enabled services

The domestic IT market

Telecom infrastructure

Venture capital

IT software and services exports

Software and services exports continued to remain on top of the IT industrys revenue

table. The export-driven software sector saw major long term projects come to Indian IT leaders

and Indian companies bagging a larger and larger share of the global outsourced business. The

software export sector crosses revenue of $50 billion for the year to march 2008, a jump of

around 45 percent, as compared to the previous year.

The number included sales of $6.2 billion from the booming back-office sector, which

provides services such as payroll accounting, and managing voice and data call centers. India's

software services sector is likely to grow by more than 25 percent in 2006/07 on rising demand

for outsourcing, an industry body said on Thursday, but a shortage of talent and weak

infrastructure remain concerns. The National Association of Software and Service Companies

(NASSCOM) said large contracts worth a combined $100 billion were coming up for grabs over


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the next two years, pointing to a vast and yet untapped market for Indian software companies

which have so far sealed mainly low-value deals.

Indian IT companies revenues are increasing every year after the US economic

slowdown in 2000. Every year Indian IT industry is reaching the software export targets

projected by the NASSCOM. Many IT companies are growing in terms of sales, man power, and

skills. Indian companies are becoming part of the world reputed IT projects. What are the growth

strategies of successful Indian IT companies? How are they getting more business every year in

spite of the tough competition from China? How are they becoming profitable? How are they

able to retain their employees for long term? How they are able to deliver good quality turn key

solutions?

The people are first assets to any company. It is the human capital which is giving

maximum returns to any company. The skilled man power and the education system India is

having are the greatest assets. The young engineers in India are very flexible in learning new

technologies and they are hungry for technology and technical developments. Indian software

engineers welcome new technologies and they accept change, which is an advantage to IT

companies. Indian IT companies are heavily investing in training young engineers. As we know

technologies change fast. To catch the new technical projects, these companies should be ready

with the latest skilled technical man power. Quick learning capabilities of these engineers is also

an advantage to these software services firms. Once you have the man power available in the

latest technologies, it is easy to bid the projects in those technologies.

One of the growth strategies of Indian IT services firms is acquisitions. In the recent past

many Indian IT companies acquired companies in US and Europe which are having the good

customer base so that they can get more business from US and Europe. For example, US based

NerveWire was acquired by Wipro Technologies. If you look at the global player Cisco, It is best

example for Mergers & Acquisitions. It has acquired hundred of companies having related

products.


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Another growth strategy they are following is diversification strategy. Some IT

companies are having plans to enter into biotechnology area. Companies like Satyam, TCS and

Wipro are already into Bioinformatics. And many IT companies are following the chain.

One more growth strategy these IT companies are following is geographical

diversification. Satyam started their development centre in China and Dubai. Majority of Indian

software houses are becoming MNCs by starting their development centers abroad. They are

recruiting diversified workforce. Infosys is going to global business schools to recruit their

management graduate.

Companies like Infosys and i-Flex are entering into IT products segments with their

banking products to the global markets. These IT companies are diversifying their customer

base. They are not dependent on single customer.

Also these IT companies are diversifying their services offering to the customer. Earlier

they were into maintenance and manpower supply to the western IT customers. These days

Indian IT companies are providing offshore facilities, project management, program

management, design, and architecture services also. In fact, Infosys is providing complete

business solutions to the customer by providing management consulting services through their

business consulting venture and IT services through their traditional software business.

According to NASSCOM President, Kiran Karniks article titled Dreaming of a new

India published in The Times of India, now every global company is having India Strategy.

The boards of these global players are having the India specific strategies.

Now let us see other side of the spectrum. According to the article published in recent

Business Week, 16 Jan 2006 Issue, SUBCONTINENTAL DRIFT written by Nandini Lakshman,

there are around 30,000 foreign workers in Indian IT and ITES companies working in India. This

number is triple the number of foreigners in India which is two years ago. People from European

countries are coming and working in Indian IT enabled services companies in Metro areas.

Majority of them are language experts in Spanish, Finish, French, and German. Many foreign

program and business managers of global IT companies like IBM are working in India. Indian IT

industry is attracting many foreigners to come and work here.


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Mumbai based Mastek, is part of the biggest IT program of UK, which is NHS

computerization in UK. Mastek is taking care of providing offshore facilities for NHS. It is

working along with British Telecom for NHS in UK.

Roger L. Martin, Dean of Rotman School of Management at the University of Toronto

expressed his views in his BusineesWeek articleWhat Innovation Advantage?, India and China

are going to get competitive advantage over North America in design and Innovation in the

coming years. He has visited TCS, Satyam and ICICI and said Chinese and Indian companies

are not leaving design to the North Americans.

With the rupee on an overdrive, Indian BPO (business process outsourcing) companies

are rethinking their strategies because, as exporters of services, these companies earn their

revenues predominantly in dollars.

Few questions answered.

the strategies adopted by Indian companies during the recession period.

Essentially three things: Hedging, pricing, and diversification.

On hedging currency risk.

Almost all Indian companies have started hedging their currency positions. Hardly any of these

would be keeping the dollar exposure unhedged. Some companies park a part of their dollar

deposits abroad, so as to avoid the risk of currency movements.

On pricing.

IT companies have been increasing billing rates over the last few quarters. Companies are trying

to bring in efficiency in various ways to mitigate the impact. The improvement in billing rates

can offset some of the currency impact. More importantly, new clients are coming in at higher

price points. This may be difficult as the local companies are not affected by this trend and

compete very well with the global delivery capabilities of the Indian companies as there is

very little to differentiate in body shopping market.


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On client diversification across geographies.

Indian IT/ITES companies have started diversifying globally in order to reduce their exposure to

the US market. For instance, the big five Indian IT companies, which derive about 70 per cent of

their revenues from the US, have now started focusing on Europe in a big way.

First, it was cost advantage that propelled Indian IT companies into the global league. Then

process discipline and high delivery quality expanded their international footprint. Now, having

established themselves as indispensable in the global tech market, it's time for Indian vendors

to invest in corporate marketing to strengthen individual brand awareness, say analysts.

According to global research firm Forrester, brand India is already well established

internationally. "Indian vendors now need to invest in building individual brand awareness in

order to win competitive battles against the global providers," Forrester Principal Analyst Pascal

Matzke said. "After all, clients buy from companies, not from countries," he added.

He said Indian vendors have focused too long on branding the India advantage as it relates to

lower costs and higher quality. While this was crucial to overcome the initial hesitancy that

existed with most clients during the early stages of offshore market evolution, most customers

today are well aware of the benefits.

Problems arise today as clients face an ever-increasing choice of providers, coming from

different backgrounds, during the vendor selection process. While vendors like Accenture or

IBM articulate strong, differentiated messages to their prospects, clients are far less clear about

the unique selling points that providers like Infosys or Wipro have to offer,"

Over the years, we have created a strong brand India in the technology sector. It is now good

time for individual companies to build on this strong foundation," he told ET. India has been

established as a prime destination for IT work on the back of the strong mother brand, which will

continue to be strengthened in the future," he added.


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Analysts say amid increasing competition and parity in the technology sector, brand-

building exercises boost topline as well as market valuation. Indian vendors need stronger brands

in the international market because they have reached critical mass in terms of revenues.

"Indian tech companies need to be more articulate in presenting their short-term and long-term

goals and key differentiators. Creating client loyalty and forging strategic ties are crucial to

remain ahead in the global market," Gartner Research director Frances Karmouzis. In order to

stay ahead, Indian companies need to compete on more than just cost and quality, and branding

is the crucial missing link, analysts added.

The Indian IT industry has grown its revenues ten fold in the past decade, from $4.8

billion in FY 1997-98 to $47.8 billion in FY 2006-07.

Its contribution to GDP is estimated to have grown from 1.2% to 5.4% in the same

period.

BFSI, Telecom and Hi-Tech verticals continue to account for approximately 60% of the

market for Indian IT.

The Indian IT industry is estimated to top $60 billion exports in 2010.

Total IT Software and services employment to reach 1.6 million in FY07.

The total size of the Indian domestic market is expected to cross $ 15.9 billion in FY

2006-07, a growth of 21% over FY 2005-06

Indian IT Industry by Sector

USD billion FY

2004

FY

2005

FY

2006

FY

2007

IT Services 10.4 13.5 17.8 23.7

-Exports 7.3 10.0 13.3 18.1

-Domestic 3.1 3.5 4.5 5.6

ITES-BPO 3.4 5.2 7.2 9.5

-Exports 3.1 4.6 6.3 8.3

-Domestic 0.3 0.6 0.9 1.2


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Engineering Services and R&D,

Software Products

2.9 3.9 5.3 6.5

-Exports 2.5 3.1 4.0 4.9

-Domestic 0.4 0.8 1.3 1.6

Total Software and Services Revenues

Of which, exports

16.7 22.6 30.3 39.7

12.9 17.7 23.6 31.3

Hardware 5.0 5.9 7.0 8.2

Total IT Industry (including Hardware) 21.6 28.4 37.4 47.8

Source: NASSCOM STRATEGIC REVIEW 2007

The Indian IT-ITES sector (including the domestic and exports segments) is expected to exceed

$47.8 billion in annual revenue in FY07, an increase of nearly 28% in the current fiscal

Contribution to GDP estimated to be 5.4% up from 4.8% last year.

Service and software exports are contributing $31.3 billion and beating forecast to

register a 32.6% growth

Offshore product development and engineering services segment is growing at 22-23%

and is expected to report $4.9 billion in exports, in FY 2006-07.

MNC investments reached over $10 billion announced in FY 2006-07, to be invested

over the next few years.

Indian Service Providers have grown their share of contracts of values in excess of $50 million

dollars from 1% in 2002 to 7% in 2006.


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Employment: Indian Software and Services sector

Sector FY

2004

FY 2005 FY 2006 FY

2007E

IT Services 215000 297000 398000 562000

ITES-BPO 216000 316000 415000 545000

Engineering Services and R&D,

Software Products

81000 93000 115000 144000

Domestic Market (including user

organizations)

318000 352000 365000 378000

Total* 830,000 1,058,000 1,293,000 1,630,000

Global Markets: While US and UK remain the dominant markets for IT-ITES exports, revenues

from newer markets are growing rapidly.

FY03 FY04 FY05 FY06

Americas 69.10% 69.40% 68.30% 67.18%

Europe 22.20% 22.60% 23.10% 25.13%

Rest of the World 8.70% 8.00% 8.60% 7.69%


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The Strategic Review 2007 reviews the industrys performance in 2007, estimates the

growth expected in the current fiscal (FY07), details the service line trends observed

across the various industry segments over the past year, presents an assessment of Indias

competitiveness as a sourcing destination, analyzes the sustainability of each individual

factor contributing to Indias leadership position and provides a view of the outlook

projected for the global and Indian IT-ITES industries. It outlines the opportunities,

challenges and agenda for key stakeholders to further extend Indias leadership in this

space.


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5.2

Indian ITES-BPO

Industry


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IT Enabled services (ITES)/BPO

NASSCOM estimates indicate that during 2002-03, the IT-enabled services segment grew by a

phenomenal 65 percent. Revenues from this sector rose from around Rs. 71 billion in 2001-02 to

approximately Rs. 117 billion in 2002-03. Compared to other competing ITES nations such as

Ireland, the Philippines and China, India drew the bulk of the global ITES/BPO business on

account of its unmatched price/performance/quality proposition.

The Indian ITES/BPO engine continued to surge forward on account of the following reasons:

Indias vast pool of English speaking and skilled manpower, which rates high on

qualification, capabilities, quality of work and work ethics

Indias telecom and physical infrastructure, which is approaching parity with other

developed countries

The strong quality orientation of Indian ITES players

The strong cost/value proposition associated with outsourcing non-core processes to India.

Customers are stated to realize cost savings of the order of 40-60 percent by moving

some processes to Indian shores

Indias unique geographical location enables 24x7 service offering and reduction in turn

around time due to time zone difference.

The presence of a regulatory environment thats conducive to the growth of the ITES

market

Some of the key ITES services lines include:

Customer care

Web sales/marketing

Billing services

Database marketing

Accounting

Transaction document management

Transcription


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Telesales/telemarketing

Benefits administration

Tax processing

HR hiring/administration

Biotech research

The Indian ITES-BPO industry is on an evolutionary path, having gone through three key

phases. The pioneers in the Indian ITES-BPO market were MNCs such as GE and American

Express that set up captive offshore facilities to gain access to skilled, competitively priced

manpower. Today, captive centers continue to be the preferred option for overseas companies

and their number has more than doubled as compared to third party service providers. Retention

of management control and low risks associated with captive facilities have contributed to the

popularity of this business model within the Indian ITES-BPO market. Increasingly, companies

are choosing to set up captive centers in multiple regions rather than growing in one or two

locations.

The second phase of growth of the Indian ITES-BPO market witnessed the emergence of a

number of VC backed third party vendors. In the third and current phase, a number of established

IT software services companies have ventured into the ITES-BPO arena. The need to create an

end-to-end portfolio of service offerings, leverage existing customer relationships, attain critical

mass, etc. are driving this trend.

BPO

Business Process Outsourcing (BPO) is the investment strategy for sourcing best practices in the

business value chain. Any process can be outsourced creatively to add capabilities rather than get

rid of tasks.

BPO is a business discipline, which is of a long-term nature. Any company can outsource routine

tasks. And in doing so, they may save money and provide a more efficient service than using in-

house operations, but it will not leverage a firm's capabilities in terms of customer service,


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innovation and change adaptation. A company has to prioritize its process needs, build a

portfolio of best practice process, link them together, integrate them and balance what it retains

in-house and what it out sources.

The payback is huge and it has become essential since the best practices have to be used in every

process.

BPO helps build best practice processes

The BPO provider base is expanding and so is the range of processes that can be outsourced.

Over a period of time, any routine business process can be outsourced by BPO. A BPO provider

can far more effectively handle processes like payroll processing. This will not only reduce costs

but also capital investment.

BPO provides expertise on demand

If business activity goes up, the process base is available and if it goes down, there are no

layoffs. A company need not staff its processes with in-house employee and not knowing what to

do with these heavy cost processes at a time when business is not doing well. When business

volumes of activities and transactions can vary widely, BPO, adds flexibility, adaptability and

ability to scale.

BPO levels

Merely identifying best prospects & service is not enough to improve customer value. Effective

execution of the same in a manner to enhance the profitability of customer relationships is vital.

Business Process Outsourcing can be broadly split into following levels, based on the

outsourcing trends & reports.


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Basic Data entry

Data processing & analysis

Departmental outsourcing (HR, Accounting, Payroll)

Customer interaction services

Business Intelligence & Knowledge services

Outsourcing partners ideally provide the business, application, education and technical

consulting services needed to implement the BPO initiatives strongly into the organization.

BPO Value proposition

Focus on core competencies

Converting fixed costs to variable

Take advantage of a proven, shared infrastructure

Manage enterprise processes efficiently

Develop profitable customer relationship & reach out to wider markets

Reduce transaction overheads

End-to-end business solutions

Entry into specialized, business intelligence & knowledge based solutions

Maximize ROI using web enabling services

Substantial bottom line benefits

Importance of Offshore outsourcing

Offshore outsourcing is not just about cost-savings. Its about looking for the right

partners to help keep the company competitive. Outsourcing means taking away the routine

functions so you can focus on core issues & help raise bottom lines. In offshore outsourcing

proper management is the key differentiator in defining success & failure.

Increasingly, sourcing work overseas is no longer a tactical option that can help firms save a few

dollars here and there; it is a strategic necessity for any company that cares about its long-term

competitiveness.


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For most business organizations across the globe, offshore outsourcing is an interesting option,

but they are reluctant to explore this option. The major reasons being most are not aware of the

benefits of offshore outsourcing & the possibilities in outsourcing. Occasional failures of

outsourced software projects have been discouraging people to entertain the various options that

the fast changing globally competitive markets have to offer. Whether it is a service or a product

to sustain an organization's competitiveness, one has to relentlessly pursue cost reduction goals

without compromising the quality of the solutions. The biggest boon outsourcing has given to the

global business community is the strength to upgrade their core business while being at the

cutting edge of technology.

There are a few logical and important guidelines that any organization has to follow to be

successful in outsourcing software to offshore businesses. India has established itself as one of

the most competitive destinations for software outsourcing development services.

Unlike in house development or on site development, the offshore software development has

certain peculiarities associated with its process. Most of the steps that are involved in onsite

development are present in offshore development. Critical steps have been included in the

process to ensure successful completion of the project.

Why is India a hot destination for offshore outsourcing? Amongst many other reasons one

primary attribute is the top quality software management policies ensued during the outsourcing

process. Some of the best business brains & management gurus head top Indian companies

keeping it abreast with the latest fundamentals in offshore outsourcing management.

Some key factors that makes Indian companies an obvious choice in offshore outsourcing are

stated below.


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Leverages the best-of-breed industry practices in terms of quality standards and project

management process, to ensure total simplicity and control of the offshore programming

activities.

Focuses on continuous efforts toward increasing efficiency and improving the quality of

our offshore software outsourcing services and delivery processes.

Incorporates an effective communication strategy and the ability to understand your

specific business needs on the basis of our technical expertise and business aptitude.

Types of software outsourcing

The term software outsourcing has been described as a situation where in a customer

contacts a software development company for the part or complete development of a software

product or delivering a IT enabled service. The level & type of work agreed upon differs in each

case. The software outsourcing with an external organization can be for development of

complete or partial software products, the purchase of packaged or customized software products

or involving the vendor in the full software development cycle & also contract with him for

maintenance after delivery. The different types of software outsourcing can be broadly described

as below:

1. Product Component outsourcing In Product Component outsourcing, the developer is

contracted to develop a part of an overall system. In case of large and complex systems where

the organization does not have the capacity or required skill to develop a particular thing is

outsourced.

2. Process Component outsourcing In Process Component outsourcing the customer

organization simply contracts for an external group to perform all or part of the functions of one

or more of their process steps or components.


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3. Software Acquisition In this type, the organization outsource each and every activity

associated with the software which includes design, development, programming, testing and

maintenance .The main reason for such type of offshore software outsourcing is to focus on the

organizations core values.

Emerging Opportunities

Apart from the traditional markets where Indian IT software and services players have a

strong presence, it is also important to focus on emerging areas, where the future opportunities

lie. The Indian software industry needs to develop a strong strategy for some of these segments

and based on current trends, build skill sets that will be relevant for these on-the-anvil markets.

According to NASSCOM, one of the emerging sectors where Indian IT software and services

companies can make a tremendous impact, is the software products segment, which encompasses

the embedded software, offshore product development, Research and Development and shrink

wrapped and enterprise products domains.

Future of Outsourcing

Outsourcing is here to stay. In a highly competitive business environment, companies

need to stick to their core competencies and go for strategic outsourcing to reduce their costs and

become more effective in their services to their customers. Outsourcing will be looked at as an

essential business skill. A companies' success in managing their outsourcing relationship will

determine its business success.


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Credit for Indias rapid growth in the IT software services and ITES/BPO domains must

go in part to the availability of a robust infrastructure (telecom, power and Roads) in the country.

Relevant telecom facilities are an important prerequisite for the success of the software industry

and over the years, the Government has taken steps to ensure that telecom remains a priority

area.

Similarly, regular, reliable, uninterrupted power, a major necessity for running IT

software and services businesses, has also received substantial attention from the Government.

Recent steps to privatize the distribution of power and bring in greater efficiencies and customer

centricity in the market, have been welcomed by the ICT industry.

The overall roads and highways scenario in India has also witnessed major improvements

over the last few years. Most cities and fist and second tier towns are connected and interlinked

to each other. Major investments have gone into the development of highways, both on the side

of the central and state Governments. Clearly, the Indian Government has understood the

importance of infrastructure to industries such as IT and created a conducive environment for its

development and expansion.


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Ten years ago, if someone asked an Indian what his people were really, really good at

doing, he would have a blank. Today, he will proudly say: Software. India would be a world

leader in a century because the industries that will define most of this century are Information

Technology, Telecommunications are areas where India and Indians have shown a surprising

amount of skill and creativity. Secondly, a major telecommunication companies in the world

today either have a software development center or are planning to have one in India. Meanwhile

India is being identified with software in the same sense as Japan was once identified with

consumer electronic goods or Germany with engineering. The IT industries thus have given a

new identity to the country among the nation of the world, particularly among the developed

countries.

In recent times, software companies in India have shown a tremendous maturity, by

opting for higher quality levels in their processes. In fact, 10 out of 17 companies at SEI CMM

lever 4, and 9 out of 18 companies worldwide at SEI CMM level 5 are companies of Indian

origin.

Key offshoring models

Indian offshore ITES-BPO set-ups are typically based on one of the following models: Captive

models * Pure captive model: An internal cost center or a 100 percent subsidiary, e.g., GE,

American Express, HSBC.

Captive-partnership model: Strategic alliance with Indian provider for implementation

of support services such as infrastructure set-up, recruitment and training, e.g., EDS-TCS

Strategic Alliance/Joint Venture models * Build Operate Transfer (BOT)/Joint

Venture: Provider-owned/joint operations, which are transferable to the customer at a

pre-determined time * Inverted BOT: The Indian provider provides only implementation

support to start with and is allowed to buy in only when the center reaches certain

milestones, e.g., WNS-BA


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Outsourced model * Pure outsourcing: Use of an India-based provider to conduct

offshore business processes, e.g., Amazon-Daksh, Aetna-Daksh * Managed

outsourcing: Full-time or part-time resources in India to facilitate transition, relationship

management, and transfer of domain knowledge to third-party provider, e.g., Greenpoint-

Progeon

Pricing models Companies in the ITES-BPO industry have traditionally adopted the following

pricing models:

Per unit time variable (per seat, per hour): This is the most common pricing model adopted

by Indian ITES-BPO companies. The client guarantees a minimum amount of business, and

billing is on per seat, per employee or per hour basis. Specialized areas are typically billed on a

per hour basis, where the billing rates per hour depend on the service provided.

Per seat (or employee) per month: The customer guarantees a certain number of seats (or

employees).

Incident or activity based: The billing is per call, per statement produced, or per line

transcribed.

Gain share-based models: Compensation is based on actual success, which is gauged based on

preset parameters. These could include actual savings, or sales lead generated, or actual sales,

etc.

In 10 or 15 years, organizations may be outsourcing all work that is "support" rather than

revenue producing, and all activities that do not offer career opportunities into senior

management. In the 1990s, outsourcing took on new strategic dimensions. Rapidly changing

market dynamics caused organizations to spend more time focusing on their core business and

global competitive pressures.


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Organizations are realizing that they can't be all things to all people. As a result, organizations

are focusing more on their core competencies and relying on service providers to manage critical

but non-core processes for them.

India has effectively provided efficient software solutions to Fortune 500 companies. Citibank,

Morgan Stanley, Wal-Mart, AT&T, General Electric, Reebok, General Motors, Sony, Boeing,

Coca-Cola, Pepsi, Swissair, United Airlines, Philips, General Electric, IBM, Reebok, Lucas,

British Aerospace, General Motors, and Sears are some companies relying on software

companies in India. It is not surprising that corporate giants in the United States, Europe, and

Japan are increasingly looking to India for cost-effective and high-quality software solutions. In

fact, a World Bank-funded study in the United States confirmed that vendors rated India as their

number one choice for outsourcing.

India has invested heavily in technical education and can provide a ready supply of bright people

at relatively low cost. Infrastructure improvements in India, particularly in the area of

telecommunications, and the independent nature of working in IT make it possible to bring this

talent to bear on virtually any programming task. Traditionally, the most active location for

staging these types of IT initiatives has been India. A strong supply of high-programming talent,

favorable government and tax incentives, and the ability to complement U.S. time zones with a

virtual around-the-clock approach are some of the advantages India has to offer.

Some of the key benefits of outsourcing from India are:

o Access to leading practices: external service providers give companies

access to an extensive, highly specialized knowledge base--which

providers must improve continuously to stay in business.

o Clearer strategic focus: Allow managers to focus on core competencies

and strategic issues rather than on routine, time-consuming activities


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o Better resource allocation: can help shift the traditional focus from

transactional activities and reporting to the delivery of forward-looking

information and value-added business analysis.

o Improving service quality and productivity --reduce response time,

deploy solutions faster and improve system availability.

o Improve performance--maximize the performance of an organization's

enterprise client/server computing environment through the use of the

latest technology and an outsourcer's performance management tools and

expertise

o Achieving cost effectiveness as well as cost Reductions

o Significant cost savings, up to 80% in certain cases.

o While it can be quite difficult to recruit the expected competence in

Western countries, it is a completely different scenario in India, where

there are lots of available programmers with a good academic background.

NASSCOM

NASSCOM is Indias National Association of Software and Service Companies, the premier

trade body and the chamber of commerce of the IT software and services industry in India.

NASSCOM is a truly global trade body with around 850 members, of which nearly 150 are

global companies from the US, UK, EU, Japan and China. NASSCOMs member companies are

in the business of software development, software services, and IT-enabled/BPO services.

NASSCOM was set up to facilitate business and trade in software and services and to encourage

advancement of research in software technology. It is a not-for-profit organization, (funded

entirely by its members) registered under the Societies Act, 1896.


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NASSCOM has been the strongest proponent of global free trade in India. NASSCOM is

committed to work proactively to encourage its members to adopt world-class management

practices, build and uphold highest quality standards and become globally competitive.

NASSCOMs Vision

NASSCOMs vision is to establish India as the 21st centurys software powerhouse and position

the country as the global sourcing hub for software and services.

NASSCOM Membership

NASSCOM welcomes as members, companies and firms that are incorporated and/or are

registered in India, which have made and will make positive contributions to the IT software and

services industry in India and globally. Member companies are expected to comply with the

associations code of conduct. NASSCOM membership covers members and associate members

categories. Members are entitled to hold office and vote at any meeting of the association.

Associate members enjoy all membership benefits, but are not entitled to vote at any meeting.

Member Services and Benefits

NASSCOM provides value-added services to its members to grow their business and create an

ecosystem which promotes growth and profitability.

These include:

o Forums for making business connections and share best practices (SME

Forum. ITES BPO Forum, Products Forum and MNC Forum)

o Participation in seminars and conferences (in India and abroad) with customer

delegations


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o Access to world-class research and market intelligence services; and counsel

from leading analysts and think tanks and consultants

o Access to knowledge of global business practices (taxation, legislation,

immigration policies, recruitment and branding)

o Opportunity to give back to the society by participation in NASSCOM

Foundation and other digital divide initiatives

o Contribute to development of global standards and thought leadership in areas

of IP creation, security, data protection, and next-generation software quality

standards

Membership Strength

The membership of NASSCOM has been steadily increasing. In 1988, NASSCOM had 38

members, who together contributed close to 65 percent of the revenue of the software industry.

Within a short span of fifteen years, the membership of NASSCOM has grown multifold to

touch 819 members as of 31st December 2003. These members currently account for over 95

percent of the revenues of the software industry in India.

Building the great Indian software brand

Indian software services companies invest a mere 1-2 percent of revenues in branding initiatives.

Ergo, India Software Inc. lacks a focused approach towards branding and its high time we get

moving aggressively on this front, says Pankaj Mishra.

Today, there is a need to communicate Indias potential to serve the entire spectrum of IT

requirements from outsourcing to consulting to markets across the globe. Nasscoms global

communications effort will also aim to address any concerns that the industry and governments

in foreign markets may have and attract more technology investments to India, says Kiran

Karnik, president of Nasscom.


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Challenges

The biggest challenge for India Software Inc. remains a synergy between the umbrella India

brand and various players who have different attributes and positioning. While Nasscom has to

play an instrumental role in finding this synergy, it will have to shed its Big Boys club image in

order to do so.

The recent emergence of an anti-offshoring lobby in the US also poses a threat to the India

Software Inc. brand. Nasscom has hired a PR agency in the US for creating awareness about the

benefits of offshore outsourcing. New Jersey is already in the process of passing a law that will

prevent offshore outsourcing of government work to India. Reports also suggest that even the

state of Washington is mulling a similar law with broader implications.

And then theres the China challenge, which keeps cropping up whenever one starts talking

about challenges. China is a serious threat to Indias cost-effective proposition in the long term,

if not immediately. Promoting India as an offshore destination, especially with the emergence of

China, remains a daunting task, says Srinivas Uppaluri, general manager marketing, Infosys

Technologies. He adds that sustaining a conducive political environment and infrastructural

issues also pose a serious threat to the India Software Inc. brand.

Aligning smaller Tier 2 and Tier 3 players with the mainstream India brand (promoted by

Nasscom) is another big challenge towards establishing the country brand. Their processes will

have to be in line with the brand characteristics already established by large Tier 1 players.

Tier 1 branding

Credibility and global delivery are two important attributes established by Tier 1 players over the

last few years. TCS is perhaps one of the pioneers in global offshore outsourcing and has

spearheaded the Indian offshore story for at least a decade. Then came the likes of Wipro and

Infosys, who shared the pie with TCS. Those were the good old Y2K days when the demand-

supply equation favoured Indian vendors, and credibility [of a vendor] was never high on an

outsourcers mind.


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But things have changed drastically in the post-Y2K scenario. Outsourcers are now looking at

credibility while making a choice between vendors. The brand attributes of India Software Inc.

today are excellence in global delivery and a solution orientation,.

Many successful technology services brands worldwide have leveraged mergers and acquisitions

as a powerful tool to gain mind share for addressing new markets. For instance, IBMs

acquisition of PwC Consulting has imparted Big Blues services business an enviable consulting

brand. When consulting firms like Razorfish and Sapient were begging to be acquired, many

analysts believed that some of the large Indian companies could gain by acquiring them.

However, none of them did so, though a few approached Sapient, exploring the acquisition

opportunity. M&A gives a different twist to branding, and it definitely is an effective branding

strategy, says Singh of Wipro.

Tier 1 players have also started partnering with various business schools like Wharton

and Berkeley University. Infosys has an award programme with Wharton, while Wipros Vivek

Paul delivers lectures at various international business schools. These industry-academia

partnerships have helped Tier 1 firms build their respective brands.

Tier 2 brandingCan NASSCOM help?

Whenever a large outsourcer looks at India, one filtering criterion is vendor size.

Recently, a Tier 2 firm based in Bangalore lost business because the outsourcer overlooked

vendors having a turnover of less than $100 million. The only way a Tier 2 or Tier 3 firm can

compete effectively is through niche expertise. Small players have no choice but to focus on

niche markets. We cannot compete on cost as we lack scale, admits Prashanth Prakash, CEO of

NetKraft. Nasscom, according to him, lacks an effective policy to address the smaller players,

especially when it comes to branding issues. India Software Inc. is not only about the top firms,

it should also include players like us. Nasscom has definitely failed to address this issue so far,

he adds.


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Nasscom has to be more proactive in streamlining smaller players towards the India Software

Inc. brand. It has to help these companies identify their core competencies. Nasscom should also

encourage smaller players to interact with established players like Wipro and Infosys. Apart from

exploring sub-contracting opportunities, this initiative would lead to a uniform brand

communication for India Software Inc.

Building Brand India

A strong country brand helps companies that operate in it. Over time, a strong country

brand equity also helps retain market share and command price premiums. According to a

Nasscom-McKinsey report, building a strong country brand includes a distinctive and credible

proposition that is consistent with the brand, aggressive and targeted communication and

consistent, aligned execution.

One of the major objectives of our global communications campaign is to communicate

the business value and competitive edge that Indian IT vendors are offering to global enterprises

in a tough market environment. Nasscom has formed a core committee within the Executive

Council, which will spearhead activities in the campaign, says Arun Kumar, chairman of

Nasscom. However, Chakravarti of Mindtree feels that Nasscom should not act as a super

advertising agency for India Software Inc. and suggests that Nasscom and the software services

industry will be better off by focusing more on Tier 2 firms and helping them.

Building a country brand in software has never been attempted by any nation so far. The

CII recently talked about its plans for branding India with a punchlineServed from India. The

apex body is already designing a logo and an application for a copyright has been filed. But this

has to be a combined effort, along with Nasscom and its members, both large and small ones.

This streamlined approach of the associations is important before the campaign hits the overseas

markets.


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India Software Inc.s brand message

A safe destination to do business

Hassle-free procedural and regulatory environment

Long-term sustainable competitive advantage in people and infrastructure

Preeminent destination for cross-border IT services

Leading global ITES hub for high-value activities

Strategic product development and R&D base


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SWOT ANALYSIS India Software Inc.

Strengths

Excellence in global delivery

Cost-effectiveness

Fortune 500 clientele

Weaknesses

Lack of streamlined approach for branding India Software Inc.

Geopolitical situation in the sub-continent

Opportunities

Improve brand recall by investing in branding

Participate in industry forums to gain better mind share

Replicate software services success in ITES

Threats

Current recession in the world economy

China as a strong brand for offshoring


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Served from India

A brainchild of industry body Confederation of Indian Industry (CII), the phrase Served from

India is being touted as an umbrella brand for Indian services, just as the Made in India brand

is used for Indian products. CII is gearing up to launch this brand and is currently working on its

design and logo. Thrilled by its creation, the industry body has even applied for a copyright. The

brand will encompass sectors like software, IT-enabled services, design services and

biotechnology. It will be used as an umbrella brand to promote the Indian services sector, both

within India and overseas.


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Chapter 6

Analysis

and

Interpretation


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Q1. Profile of the Respondents(Freshers)

Interpretation: It is observed that 48% of the respondents have secured an aggregate of 60%-

70% and 36% of them have an aggregate of 70%-80%. This would infer that nearly 86% of the

respondents are average and above average students. 12% of the respondents have aggregate of

>80% who are considered as brilliants at studies.

Aggregate % Freshers Respondents

50%-60% 60%-70% 70%-80% 80% & above

Respondents 1 12 9 3

% 4% 48% 36% 12%


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Q2. Salary Expectations of the Respondents (Freshers)

Interpretation: 48% of the respondents expect a salary of 12k and above and 40% of the

respondents expect a salary between 10k and 12k. This would infer that nearly 88% of the

respondents expect a salary of more than 10k, which is exactly, or just above the average scale

for the freshers in the industry.

Salary Expectations

4k-8k 8k-10k 10k-12k 12k &

above

Respondents 2 1 10 12

% 8% 4% 40% 48%


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Q4. Expectations of Respondents about the job

Interpretation: The above figure indicates that 60% of the respondents considers Good salary,

challenging job, good work culture. 64% of the respondents gives importance to Brand image

and 88% to growth opportunity in their job.

Expectation of the future job

Good Salary

Challenging job

Good work culture

Growth opportunity

company's brand image

Respondents 15 15 15 22 16

% 60% 60% 60% 88% 64%


Page 58

Q5. Level of importance to brand image in their decision to join a company

Level of Importance to Brand image

Not at all

important

Not so

important

Important

to some

extent

Important Very

important

Total 2 2 15 18 13

% 4% 4% 30% 36% 26%

Interpretation: The above figure indicates that 30% of the respondents say Brand image of the

company is important to some extent in their decision to join. 36% say important and the other

26% say it is very important. Only 8% of the respondents say that it is not important. So on a

whole, it can be concluded that 8% of the respondents say brand image is not important, 30% of

them have neutral opinion and 62% of them say brand image is important.


Page 59

Q7. Choice of the future job (a decision of brand image Vs salary).

Choice of future job and company

High Brand

image,

Avg/less

salary

Avg Brand

Image, Avg

salary

Low Brand

image, High

Salary

Respondents 9 14 2

% 36% 56% 8%

Interpretation: It can be inferred that 36% of the respondents give more importance to brand of

the company irrespective of the salary. 56% give equal importance to brand and salary. Only 6%

of the people give importance to higher salary more than the brand of the company.


Page 60

Q8. Brand building strategies in general

Brand building strategies

Newspaper

Advtg

Press

release

Internet

Advtg

Word of

mouth

Advtg

Corporate

participation

in summits

Sponsoring

events

Respondents 22 18 9 41 30 23

% 44% 36% 18% 82% 60% 46%

Interpretation:- it can be inferred that 82% of the respondents feel word of mouth advertising is

the best way of building brand. 60% of the respondents that Corporate participation in various

summits also helps in building brand. 46% of the respondents feel sponsoring various events and

44% feel Newspaper advertising will also help in building brands.


Page 61

Profile of working professionals

Work experience

Respondants 5years

6 12 6 1

Percentage 28% 48% 24% 4%


Page 62

Q. How did you get into to the organization you are currently working with?

Mode of joining

Respondents Campus recruitment

Friends reference

Newspaper

advertisement

others

11 5 6 3

Percentage 44% 20% 24% 12%

Interpretation: It can be noticed from the above graph that 44% of the respondents

joined the company through campus recruitment. The other means like newspaper advertisement

and friends reference together forms 44% and only 12% of them have joined the company

through other means.


Page 63

Chapter 7

Summary of Findings

And

Conclusion


Page 64

Chi Square (2) Test

Null Hypothesis: Ho: Brand image is not considered as an important factor in the

decision to join a company compared to salary.

Against

Alternate Hypothesis: H1: Brand image is considered as an important factor in the

decision to join a company compared to salary.

Test Statistic

2 = N (ad-bc)^2______ ~2

(a+c)(a+b)(c+d)(b+d)

Decision Rule

At 5% level of significance and 1 degree of freedom,

Ho is accepted when, 2 3.841

A B

C D


Page 65

Important influencer

Not an important

influencer Total

Brand image 34 16 50

Salary 22 28 50

Total 56 44 100

a=34, b=16, c=22, d=28, N=100

2 = N (ad-bc)^2______ ~2

(a+c)(a+b)(c+d)(b+d)

= 100(34*28-16*22)^2____

(56*50*50*44)

2 = 4.09

Finding

At 5% level of significance and 1 degree of freedom, 2 lie in the critical region. Hence, Ho is

rejected. Thus it can be concluded that both experienced people and freshers consider brand

image as an important factor in the decision to join a company compared to salary.


Page 66

Conclusion

From the above findings, it can be concluded that brand image of a company plays

a major role than compared to salary in the decision of an employee to join the

company. Even though the other factors like growth opportunity, work culture and

nature of job plays an equal role, brand image has an upper hand when compared

to the salary. It can also be concluded from the fig that word of mouth is the

easiest and the best way of building a brand in the industry. This signifies the

importance of Employee satisfaction and Corporate Social Responsibility of a

company towards achieving word of mouth marketing.


Page 67

Chapter 8

Recommendations


Page 68

Recommendations & Suggestions

Articles and research papers by the employees to be published in leading magazines.

o Participation of company leaders in various summits and meets thereby building a

rapport with others in the industry.

o Technically sound Public Relation Officer to announce frequent press releases.

o Membership in various forums and participating in these forums discussions and

meets.

o Sponsoring selected events related to the industry.

o Highlights of the high profile people in the company to be marketed in all

possible ways.

o Encouraging word of mouth advertising by motivating the employees in this

regard and rewarding their efforts in an effective way.

o Advertisements of recruitment in leading newspapers on a regular basis.

o Internet advertisements in leading websites.

o Tier 1 players have also started partnering with various business schools like

Wharton and Berkeley University. Infosys has an award programme with

Wharton, while Wipros Vivek Paul delivers lectures at various international

business schools. These industry-academia partnerships have helped Tier 1 firms

build their respective brands.

o Companys brand can also be build by exhibiting Corporates Social

Responsibility by contributing part of their funds for social causes like education,

healthcare, rural development, infrastructure and environment protection.


Page 69

Chapter 9

Annexure


Page 70

I-Questionnaire for working professionals

Hi,

Man Veer

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