Thinking

Indian IT companies: Time to “hit refresh”?

March 14, 2019

By Lulu Raghavan & Sridhar Vedala

Not long ago, Microsoft faced a daunting task: overcoming perceptions of its brand as slow-moving and traditional, leaving it struggling to compete with the likes of Amazon, Google and Facebook. Not only was rapidly changing technology reshaping the industry, but fierce competition and stagnant internal culture had left Microsoft feeling like it had lost its soul.

Despite these strong headwinds, Satya Nadella took methodical actions to help the company reestablish growth. In his book Hit Refresh, Nadella tells the engaging and inspiring story of Microsoft’s business transformation, making a compelling case for how organizations should transform as they seek out new energy, ideas, relevance and renewal.

In driving the business transformation of Microsoft, Nadella and his leadership team leveraged the power of the Microsoft brand. They redefined its core brand purpose and used its new mission to revitalize culture—from how the company thinks to how it acts, including assessing the values, customs, beliefs and symbolic practices its employees live and breathe every day. Microsoft communicated its changes both internally and externally, forging new and surprising partnerships as it confidently set itself up to thrive. In this way, Nadella and his team built trust in the Microsoft brand while also fortifying it for the future.

Most interesting of all is how Microsoft changed perceptions across a multitude of stakeholders without any shift in a visual system or logo. Many companies mistakenly believe that changing perceptions necessitates a new visual expression. Worse still, many companies believe that a new visual expression is all a transformation requires. Microsoft saw its opportunity differently, focusing on positioning, culture and communication as pillars for its newfound brand and business.

Taking a cue from Microsoft: Identifying challenges in the Indian IT industry

The Indian IT outsourcing industry faces a challenge similar to the one Microsoft combatted just five short years ago. While many Indian IT companies are undergoing radical transformations to stay relevant in the digital world, low brand awareness, weak brand perceptions and low-cost reputations in markets like the US, UK and Europe have constrained their potential for growth. The traditional core services offered by Indian IT companies have become heavily commoditized, leaving little room for differentiation. And demand has shrunk due to the emergence of cloud-based software services.

Clients are no longer looking only for cost-optimization solutions from Indian IT companies. Instead, they seek new ways to use technology for innovation—from generating creative business models to engaging more deeply with consumers. In today’s world, Indian IT companies need to deliver full-scale business transformation, not just siloed one-step solutions. It’s about services like consulting, digital strategy, service proposition design, experience design, digital technology operations and change management, to name a few.

Furthermore, the client base for Indian IT companies has radically shifted. In many cases, CIOs are no longer calling the shots. Instead CEOs, CMOs and COOs are taking the reins, necessitating different value propositions and a stronger understanding of clients’ businesses.

Competitors are also rampant, meaning that in each new service category, there are well-established companies with whom clients have previous relationships. Newer entrants therefore have to overcome technical and product challenges, while also establishing trust and inspiring confidence.

Blockchain

While it may seem that the headwinds facing the Indian IT space are overwhelming, there is much opportunity at hand. As Satya Nadella did for Microsoft, Indian companies need to focus on a few key goals, including integrating digital transformation into their core offer. In combination with stronger brand promises and more comprehensive products, technology like microservices, data analytics, cloud systems, blockchain, artificial intelligence, IoT and quantum computing could help spawn a new growth cycle for the Indian IT industry.

Five imperatives for Indian IT brands

Indian IT companies must urgently hit refresh. While some top companies have solid reputations in specific categories, they often lack brands that can expand across other services. The perception of Indian IT companies as low-cost providers also acts as a barrier to expansion. The reality is that despite having competencies in new areas, many Indian IT brands may be unable to realize their potential due to outdated perceptions about their company and the industry.

As a result, Indian IT companies need to focus on both internal and external transformation in order to make the most of emerging opportunities. This is where the corporate brand of IT companies can play a very important role—just as Microsoft’s corporate brand did in its transformation.

For many business leaders, this will require a shift in mindset and a clearer understanding of how brand adds business value. Brands aren’t just logos. Branding isn’t just about changing your colors and revisiting the look of your website or marketing materials. Brand goes much deeper than that. An IT company’s corporate brand is the most valuable asset on its balance sheet—and in many cases, even more valuable than its intellectual property and talent.

Employees need a sense of purpose to deliver top results.

While that may seem extreme, it’s not. Employees need a sense of purpose to deliver top results. When they know what the company represents and how they fit into that picture, they can better deliver the company’s promise to consumers. By elevating business from transactional to relationship-driven, organizations can establish meaningful and deep client relationships that allow them to expand their services. And by shifting marketplace consideration with a strong brand, new clients and growth suddenly become available.

So how can brand be leveraged to add value and aid growth? Here are five imperatives for Indian IT brands to consider:

  1. Articulate what the brand stands for, and ensure it serves the business strategy
  2. Align the brand with the desired internal culture
  3. Design the ideal customer experience based on the new brand strategy
  4. Determine the optimal brand architecture to serve the business’ needs
  5. Communicate clearly and consistently to external audiences to amplify brand visibility

When brands are activated across all five of these areas, the organization can capture tremendous value. Microsoft ended 2018 as the company with the largest market capitalization in the world—even beating Apple in Q4. Its transformation is a powerful validation of the impact brand can have as a tool to drive change, shift perceptions and set companies up for future success.

Lulu Raghavan is the Managing Director and Sridhar Vedala is the Digital Transformation Consultant at Landor Mumbai.

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