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Marketing IT amid Global Crisis - An strategic perspective

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1. Ravi Shankar @ Marketing IT amid Global Crisis An strategic perspective. 2. Talk of the hour……... Business Overview Market Scenario Global Outlook Internal IT…
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  • 1. Ravi Shankar @ Marketing IT amid Global Crisis An strategic perspective.
  • 2. Talk of the hour……... Business Overview Market Scenario Global Outlook Internal IT Market Scenario Conclusion & Focus SIBIN it Group’s other Current status Future strategy Business Interest @
  • 3. Global Financial Situation – An outlook
  • 4. Global Macro Economic Situation 0.9
  • 5. Some key facts about US economy <ul><li>Sharpest Fall in 7 yrs </li></ul><ul><li>With Financial turmoil this could mean potentially lengthy US recession </li></ul><ul><li>Consumer Spending which fuels 2/3 rd of US economy, fell at a 3.1 %, </li></ul><ul><li>First cut in quarterly spending since the closing quarter of 1991. </li></ul><ul><li>Spending on non durable goods e.g. food paper products – dropped at </li></ul><ul><li>the sharpest rate since 1950. </li></ul><ul><li>The GDP number does not reveal the weakness because of the impact </li></ul><ul><li>of international trade, which shows how weak the economy is. </li></ul><ul><li>Continued job losses coupled with declined in value of stocks. </li></ul><ul><li>Sub prime crisis with other investments have put consumers under sever </li></ul><ul><li>stress. </li></ul><ul><li>Disposable personal income dropped at an 8.7 % rate in the 3 rd quarter, </li></ul><ul><li>steepest since 1947. </li></ul>
  • 6. Indian Macro Economic Situation Growth Vision The GDP Forecasts FY 2009 FY 2010 RBI 7.5 % NA NCAER 7.6 % NA Morgan Stanley 6.4 % NA Goldman Sachs 7.5 % 7.0 % Citigroup 7.2 % Best Case 7.4 % Worst Case 5.8 % Base Case 6.6 %
  • 7. <ul><li>Erosion of margin due to high interest cost. </li></ul><ul><li>Tepid growth in gross capital formation, it can plummet to 2 % from 13.7 % in the year ended March 2008. </li></ul><ul><li>Sub-7 GDP growth in 2009-10 would arise from intensification of financial stress and global recessionary condition. </li></ul><ul><li>Intensified financial stress and risk aversion has resulted in tight liquidity condition </li></ul>Key Facts about Indian economy
  • 8. <ul><li>Intensified financial stress and risk aversion has resulted in tight liquidity condition </li></ul><ul><li>Recessionary conditions in US and European market will result in moderation in growth from more than 24 % in the recent past to 19 % in 2009-10. </li></ul><ul><li>Export grew at its slowest pace in last 18 months as a weakening global economy damped demand for the nation’s products. </li></ul>Key Facts about Indian economy
  • 9. <ul><li>$1 trillion economy </li></ul><ul><li>One the economies driven by domestic consumption and investment rather than completely on exports. </li></ul><ul><li>Crude and other commodities raced towards their peak in the first half of 2008 which indirectly resulted in stock prices tumbling as input become costlier. </li></ul>Is Indian economy still robust???
  • 10. <ul><li>Rise in saving and investment by 10 % in last 5 yrs, which has been sustained through productivity improvement s and rising inflow of FDI. </li></ul><ul><li>From being and agrarian economy, growth currently is a result of the economic cycle upturn, urban/ services-led consumption, outsourcing and the trickle down effect. </li></ul><ul><li>Structural India story still in place (Pull factor for FDI) </li></ul>Is Indian economy still robust???
  • 11. <ul><li>Indian exports about 85 % of its oil requirement and hence the drop in prices augurs well for the trade and current account deficits. </li></ul>Is Indian economy still robust???
  • 12. Global IT Spending and Investment Forecast 175,700 153,500 113,725
  • 13. <ul><li>Just under half - 43 %, - of western companies are cutting back their IT spending </li></ul><ul><li>Nearly 30 % are scrutinizing IT projects for better returns </li></ul><ul><li>IT spending for 2008 in China, Russia and India is surging forward at 18 % growth far ahead of the 5.2 % increase globally </li></ul>Global IT Spending and Investment Forecast
  • 14. Global IT Spending Patterns <ul><li>Overall levels of spending in the West in 2008 are predicted to remain far higher than emerging market overall. </li></ul>
  • 15. SOFTWARE EXPORTS – GLOBAL REACH F.Y. 2006-07 F.Y. 2007-08
  • 16. SOFTWARE EXPORTS – SEGMENT WISE
  • 17. Overall corporations spend by Industry Verticals Chemicals: 2000: 3.09% 2001: 3.51% 2002: 2.68% Construction & engineering: 2000: 1.55% 2001: 2.03% 2002: 1.43% Consumer products: 2000: 3.52% 2001: 4.33% 2002: 3.64% Electronics: 2000: 3.14% 2001: 3.20% 2002: 2.95% Energy: 2000: 2.56% 2001: 4.71% 2002: 2.2% Financial: 2000: 6.76% 2001: 6.09% 2002: 6.64% Food/beverage processing: 2000: 2.31% 2001: 2.56% 2002: 2.13% Health care: 2000: 4.33% 2001: 4.81% 2002: 4.42% Hospitality & travel: 2000: 1.71% 2001: 1.72% 2002: 1.55%
  • 18. Overall corporations spend by Industry Verticals Information technology: 2000: 4.13% 2001: 4.68% 2002: 5.13% Insurance: 2000: 3.78% 2001: 4.11% 2002: 3.49% Media: 2000: 3.66% 2001: 3.95% 2002: 4.13% Metals/natural resources: 2000: 1.84% 2001: 2.30% 2002: 2.01% Professional services: 2000: 5.11% 2001: 6.39% 2002: 5.12% Retail: 2000: 1.64% 2001: 1.80% 2002: 1.63% Telecommunications: 2000: 5.79% 2001: 5.88% 2002: 6.40% Transportation: 2000: 3.79% 2001: 3.93% 2002: 4.17% Utilities: 2000: 3.61% 2001: 3.90% 2002: 2.43%
  • 19. FY07 Vertical market exposure for industry exports
  • 20. Domestic IT Services Revenues by Key Vertical Markets (2004)
  • 21. Growth of IT Spending in India
  • 22. Five Year Revenue Forecasts for Key Service Lines in the Domestic Market (INR Million)
  • 23. Is Indian economy still robust??? IT spending Till 2010 Asia Pacific’s 10-16% India’s 17.6-24% China 10-13% Global IT spending 3.3-6.5%
  • 24. <ul><li>North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010. </li></ul><ul><li>Companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don’t have scalable IT systems. </li></ul>Is Indian economy still robust???
  • 25. <ul><li>The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan. </li></ul><ul><li>These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015. </li></ul>Is Indian economy still robust???
  • 26. What the credit crunch means for IT <ul><li>Hardware and software vendors will feel the squeeze </li></ul><ul><li>Hastening the move to SaaS and open source </li></ul><ul><li>Outsourcers tied to an industry in crisis </li></ul><ul><li>In the long term, outsourcing booms </li></ul><ul><li>Every cloud has a silver lining </li></ul><ul><li>Faster shift of jobs from West to East </li></ul><ul><li>Contract workers will suffer </li></ul><ul><li>Financial services divisions will take a hit </li></ul><ul><li>Global IT spend will be resilient to the economic slowdown </li></ul><ul><li>More home workers </li></ul>
  • 27. <ul><li>Trying to get best pricing and terms for their IT purchases </li></ul><ul><li>They will ensures they get the best value from their IT purchases. </li></ul><ul><li>- Buy only functionality that works, and that they actually need </li></ul><ul><li>- Avoid hidden costs and risks </li></ul><ul><li>Identifying major cost-saving opportunities </li></ul><ul><li>- Whether their spending is higher, relative to best-in-class peers.   </li></ul><ul><li>They would implement cost-savings technologies </li></ul><ul><li>In implementing priority technology. </li></ul><ul><li>Application Rationalization </li></ul><ul><li>. </li></ul>What are the next strategy of companies on tech spending
  • 28. <ul><li>Implement cost-saving process improvement </li></ul><ul><li>- In achieving hard-dollar savings from process improvement </li></ul><ul><li>- Project prioritization or portfolio management </li></ul><ul><li>- Offshoring or outsourcing </li></ul><ul><li>- Asset management </li></ul><ul><li>- Workforce optimization </li></ul>What are the next strategy of companies on tech spending
  • 29. Next level of game for SIBIN it
  • 30. My strategies
  • 31. How ??? Pressures     Actions Capabilities   Enablers   Need to demonstrate and improve Return on Marketing Investment (ROMI)  Track customer behavior Measure customer value KPIs  Real-time analytics  Define and develop customer profitability and lifetime value models  Have processes and systems in place that utilize customer information to support Sales & Marketing operations  Customer Data Integration (CDI) and data management  Define and track marketing programs  Develop a cross functional Customer Intelligence Center of Excellence  Statistical modeling and analysis  Customer routing and lead prioritization based on channel, cost and capacity 
  • 32. Closing the Circle of Lead Management
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