‘Do we need Nasscom’ is like asking ‘Do you beat your wife’, so no one associated with the Indian IT industry can dare be politically incorrect to such a question posed to him! Having said that, Nasscom faces perhaps one of its toughest moments in its remarkable two-decade-long journey today. Every professional service organisation (PSO) – trade, industry, investment promotion – around the world is faced with declining memberships, a struggle to remain relevant, an inability to embrace innovation in delivery of products and services and last but not the least, a gridlock with both national and international governments in persuading them of the PSOs’ agenda. Given this overall scenario of most PSOs, Nasscom has done a Rajinikanth for India, a terrific national service.
Nasscom’s power comes by virtue of its being the face of the $100 billion Indian IT and ITeS industry, which is expected to grow to $225 billion by 2025. Over the years, by hiring some of the foremost lobbying firms in the world, Nasscom has got its voice heard at Capitol Hill and Europe and done so remarkably well. However, there is no gainsaying the fact that a TCS or an Infosys can do anything that Nasscom does – except in collective issues such as immigration and taxation – and do it much better. So how can Nasscom remain relevant?
N R Narayana Murthy, the globally respected face of the industry, has submitted his report on restructuring Nasscom, which includes verticalisation to take care of product companies and BPOs who often find themselves as ‘second-class citizens’, non-linear growth of the industry, extended terms for the chairman, etc.
Today, the industry is virtually under siege by the Indian government, especially by the tax administration, which views them almost as adversaries, something not good for India. Nasscom has failed spectacularly in persuading the Indian government that these are the crown jewels of India and that crown jewels need to be preserved, protected and nurtured. Nokia, Microsoft, Vodafone – almost every global R&D based firm operating in India is today one step away from shutting shop, if the pending tax issues running into millions of dollars are not resolved, as of yesterday. Nasscom must take this up as a war to be won.
Government should be an ally of Nasscom, provided the latter has a healthy relationship with it, such that Nasscom should take over and run India’s investment promotion efforts overseas in every knowledge-based industry, leveraging its significant network in the process. Nasscom must establish, in partnership with the government, India Investment Centres across major capitals and become the single window for FDI to explore India. It should do so through an automated, fair and transparent system, through which all its members get equal opportunities to succeed.
The other sensitive issue that Nasscom has been debating internally is the fact that its own governance structure needs a rethink. The worst kept secret of Nasscom is that its Executive Council (EC) largely ‘rubberstamps’ decisions taken by the Past Chairmen’s Council (PCC). Today, Nasscom is in a peculiar situation where the PCC is bigger than the EC! While the experience and guidance of past chairmen is worth its weight in gold, yet whether it’s desirable from a corporate is debatable. The answer lies in significantly strengthening Nasscom’s secretariat and electing an EC (including past chairmen) that is deeply committed to giving their most valuable resource, their time.
More importantly, the Nasscom president’s job can’t just be another job; it has to be a mission. When Egon Zehnder seeks out the next president, the job description must demand ‘a missionary zeal to place India’s and Indian IT industry’s flag on the moon, both literally and figuratively’. This can’t be a post-retirement, ‘governor’ kind of job in Indian politics. What the industry really needs today is a Dewang 2.0. Nasscom presidents, apart from the dynamic Dewang Mehta, have been ‘retiring’ captains of industry. Such ingrowth cannot be healthy for any organisation. One is compelled to draw a parallel with the RBI and Indian Railways both of whom are wholly ingrown organisations, which hardly leads to organisational renewal or dynamism, which is critical for any PSO whose members are in an industry that changes almost every six months! Apple dumped the iPod Mini less than 18 months after its huge success, which saw over $1 billion in revenues, and brought in the Nano.
When 30 member companies form a splinter group ‘iSpirt’, the question to ask is, why iSpirt? Obviously Nasscom is failing to address some needs of atleast a section of its members. Semantically, one can argue that a think tank is not a trade body and vice versa, but hasn’t Nasscom in partnership with McKinsey, Everest, Forrester and others been providing thought leadership to the industry? If yes, where did it fail?
Nasscom should remember the pangs of its own birth out of another association, amidst deep discontent. In that sense, this is a wake-up call. Nasscom is ripe to move into the next orbit of growth, or get disrupted. What choices it makes for itself will determine not just its own complexion, but also that of millions of young Indians – and India – along with it.
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