IT’s a question of branding

As competition hots up, IT players focus on differentiation rather than on cost reduction.

Branding in the Indian IT outsourcing sector has been more a sub-conscious effort than a planned strategy. However, as clients demand more bang for the outsourcing buck, coupled with shifts in technology, Indian outsourcers will have to create a distinct identity.

On a sunny afternoon in March, as N. R. Narayana Murthy, Chairman Emeritus of Infosys walked in to address a gathering of mediapersons (on behalf of a Nasscom committee he chaired), accompanied by N. Chandrasekaran, CEO of TCS, the concern was writ large on their faces. On one hand was a slowing economic climate (both in developed and Indian markets) and on the other, the industry at the crossroads with regard to India as an outsourcing destination.

This dichotomy is reflected in the branding of Indian IT, which Murthy and others are trying to address. Murthy jokes that at times he used to get orders just waiting in the queue in an international airport lobby. Add to that an industry increasingly getting commoditised and the need to differentiate becomes apparent. Most of the companies have a similar management structure in the form of delivery teams, hiring capabilities, training, tools and management with similar backgrounds. All things being equal, the sector that built its brand more subconsciously now has to make an effort to build a brand that will have a significant differentiator.

BABY STEPS

Some developments recently point to the efforts taken by the sector that is being pushed into a corner and is now forced to hit back. TCS has ‘Experience certainty’, Wipro has ‘Applying Thought’ and Infosys ‘Building Tomorrow’s Enterprise’ as their taglines. But pit Indian brands against Fortune 500 companies and realisation sets in.

Only TCS has managed to crack the brand code to a certain extent. Last year TCS was named one of the ‘big four’ in IT services brands, by Brand Finance, a leading brand valuation firm. The company’s brand value is estimated at $4.1 billion and it plays with the big boys such as IBM, HP and Accenture. None of the erstwhile poster boys such as Infosys, HCL or Wipro figured in the list. Interestingly, in the last 12 months, it is the mid-sized IT companies which are making a push to rebrand themselves. Bangalore-based Mindtree has announced a change in its brand identity with which it would focus more on expertise than costs.

The new brand identity would help the $400-million company get more larger-sized outsourcing deals which could help it achieve the $1-billion target in the next few years. The company, which started operations in 1999 and took the help of a student affected by cerebral palsy to design its logo has this time opted for LA-based Siegel + Gale for its rebranding initiative. Explaining the rationale, Subroto Bagchi, Chairman, MindTree, says that every ten years an IT services company should look at a rebranding exercise. “In these challenging times, the message of outsourcing clients gaining more bottom line by adopting innovative solutions as compared to cost reduction is the need of the hour,” he added.

For the Nasdaq-listed iGate, Ogilvy and Mather late last year came out with a set of ads that took a dig at the traditional model of outsourcing and urged clients to talk of the results achieved by outsourcing rather than a mere ‘you do the job and bill for workable hours’ approach.

For a business that is people-intensive, Indian IT services companies have done well in the first phase but now the real challenge comes, says Rohan Deshpande, CTO, Ogilvy & Mather. The challenges come in the form of a different branding exercise that will distinguish one from the other. “Right now, it all looks the same,” he adds.

To get a sense of what Deshpande is alluding to, one needs to look a little deeper into the way multinational services companies such as IBM play the game. In 2008, then CEO of IBM, Sam Palmisano, outlined a corporate initiative called ‘Smarter Planet’, which sought to highlight the way business, government and civil society around the world were capturing the potential of smarter systems to achieve economic growth, efficiency, sustainable development and societal progress.

It resonates beyond boardrooms and that should be the level of thinking at Indian companies aspiring to go global, says an executive who was involved in the creative process of this initiative.

To be fair, Indian companies do not have a 100-year-old legacy and tend to stay away from radically different branding strategies. iGate has made a start with its campaign but the differentiation has to come in sooner rather than later.

MindTree’s Bagchi has been trying to address this with the new branding strategy.

“In the past, we have rarely communicated differentiation and were defined by the category of business that we were present in,” he admits.

According to Atul Hegde, the CEO of Ignitee Digital Services, the time has come for Indian companies to look beyond Chief Technology Officers (CTOs) and look at getting a buy-in right from the Board to the employees for the kind of services rendered. “When you look at the branding pyramid, services are at a lower end (when compared to products) and companies need to figure out what value can be added with branding to get that mind share,” he adds. According to Bagchi, the new branding strategy involves moulding market perception of the Mindtree brand and communicating it to the stakeholders. This aspect of Indian companies putting themselves in their outsourcers’ shoes is new. The business of outsourcing is unique in the sense that it involves longer client-provider relationships when compared to other sectors, wherein the relationships are relatively shorter.

However, in the light of economic volatility and with IT’s natural tendency to complicate processes, outsourcers are increasingly asking questions that can be answered in shorter time frames than multiyear engagements.

“It is time that the world looks at India as a destination that can go beyond cost and look at innovation – whether in services or products,” says Murthy.

Can Indian companies redefine business processes with the use of technology? The answer is unclear. However, one thing is clear: Companies need to find the answer sooner rather than later.