28th Apr 1997
K.V. Ramani, chairman and managing director, Future Software, Chennai took over as the president of Nasscom (National Association of Software and Service Companies) for the current financial year. Addressing the press for the first time after taking over as president, he outlined the priorities of Nasscom. He spoke to IT people on vital issues concerning the Industry. Excerpts:
Foreign presence of Nasscom:
As the Indian IT industry is now a showcase to the scenes of liberalisation. Nasscom would primarily consolidate its presence in US and Europe. Besides we would try to explore opportunities in Japan, South Korea and South Africa market which are potential but have not been tapped so far. Nasscom would reorient the marketing strategy to enable Indian software companies to enter these potential markets.
Nasscom would be conducting business seminars in Europe. This apart, with goverment’s help it would conduct business seminars and discussion with the European Commission. The European markets have not been fully tapped. The US market remains the biggest importer of software services from India but the European market is growing at a tremendous pace. It would be appropriate if Indian companies make their presence felt rightaway. The benefits accrue both to the Indian software companies and the IT industry.
Nasscom intends to form a consortium of Indian companies to market the services offered by Indian companies in Europe. It is imperative for Nasscom to market Indian service expertise in the European market. Unless the services offered by the Indian software companies are not marketed properly then there no meaning the saying we have the expertise.
Business seminars would be the main vehicle but dissemination of information about the same is the key word. We would use all media to disseminate information including the Internet, which is a big boon to the Indian companies.
The single monetary unit as is being proposed by the European Commission should be a big boon. Not only does it help do away with financial problems but it goes a long way in helping the Indian companies part with their expertise at the same rate without any differential. I would not say it is a big concern as of now but then it solves any problems in this regard.
The Y2K problem is a big opportunity for the Indian companies. Nasscom has formed a special interest group to focus on the Y2K problem. There should be a coordinated effort on part of the Indian companies whole embarking on taking project connected with the problem. It would then facilitate Indian companies to bag new orders.
The Gartner group has put the estimate of Y2K work at a staggering $600 billion but as per our estimates it is somewhere between $60 to $100 billion. India can take a share of at least $2-5 billion. It has bagged orders worth $5 million already.
But the Y2K problem has an inherent problem in product liability. When any company undertakes a conversion work, it needs to keep all the other information intact. Any change in data while conversion may mean that the company can be sued for product liability. Nasscom is taking the matter with a serious view and it its bid to help the Indian companies undertaking or going to undertake Y2K problems, Nasscom is in negotiations with six foreign insurance companies to cover the risk of product liability. A percentage of the earning of the Indian company can be given to these insurance companies to help Indian companies cover the risk of product liability.
Telecommunication sector and Nasscom
Telecommunication software is another area where Indian companies stand good chance to prove themselves. Another special interest group is being constituted by Nasscom to help Indian companies solely focusing on the telecommunication sector. The opening of the Indian telecommunication sector has thrown open vast opportunities for companies which are into developing software for the sector. The entry of multinationals has necessitated the need for cooperation and coordinated efforts among the Indian companies. The interest group will take upon itself to study and estimate the size of the work segment. This apart it will also help Indian companies look at the overseas market with much greater force than as of new.
Human Resource Policies of Nasscom:
For all this we need competent personnel. Nasscom has been endeavouring to bring about the change in the human resource both in terms of quality and quantity. It has been in negotiations with the government, both the centre and the states to bring an overall change in this aspect. I must tell you that the four Indian Institutes of Technology have agreed in principle to run a second shift on computer science courses. This will have tremendous effect on the software industry in that it will be provided with human expertise of the best quality and in greater numbers.
Nasscom’s Role in computer courses:
Nasscom is also planning to conduct bridge courses to help people from other disciplines to take up a career in the software industry. This would further enhance the output of human expertise. Such a tier will help ensure that you have the right kind of expertise to take up specialised and non-specialised activities. While personnel from IITs could be deployed for specialised jobs, the latter could find place in the category. Further you cannot deny the latter’s entry into taking up specialised jobs once they acquire the requisite expertise.
The government has agreed in principle to set up an Indian institute of Computer Professionals, an apex body which would oversee the training activities of various institutions engaged in computer education. It would be on the lines of the Institute of Chartered Accountants and bodies of the like. Such a thing would ensure that there is a uniformity in the education pattern. This is essential to ensure that the software industry gets the right expertise with the same knowledge on certain terms.
Setting up Software Cities.
The other aspect that Nasscom has been working upon is development of the infrastructure. The panel had submitted its annual report to the Department of Electronics and had mooted the idea of 50 software cities, spanning the length and breadth of the country. It had also mentioned that these software cities should be attached to the IITs and various other engineering colleges. Nasscom would continue to pursue this goal. Already four state governments Kerala, Tamil Nadu, Karnataka and Orissa have taken up our recommendations and are already setting up the cities.
Employee Stock Option:
To make the employees part of the industry and the respective companies. Nasscom has mooted the idea of Employee Stock Option and creation of a share depository where the shares of Indian companies could be deposited and traded by multinationals. There have been not much response from the government on the above aspects. The ESO would bring in a sense of feeling among the employees of being part of the industry and the company they work for.
The government is confused on the tax front as to how the employees could be taxed. The company can give its share to the employees which will have a certain lock in period. Captital gains tax can be done when the employee sells his or her shares. The government has said that it will look into this aspect. Same is the case with the share depository issue. It is not that the MNCs will only be allowed to trade in stocks on Indian companies. If any Indian company can trade in shares of other companies it will also be allowed to do so. I am optimistic that both the aspect would come to stay as an integral part of the IT industry in the country.
Nasscom and Internet Services:
Nasscom has recommended for Interest service providers (ISP) throughout the length and breadth of the country without having a ceiling on the number. Internet is a boon and this should be made use of by everyone. There should be as many ISPs as possible. They can be charged on the services they are availing of from VSNL. Nasscom has never disputed the monopoly of VSNL. Licencing pattern would be the wrong step. VSNL should charge for the services that it is offering to the ISPs VSNLshould provide for a higher bandwidth. Along with it, there should be a National Telecom policy to ensure uniformity. Nasscom would be pursuing these aspects.
Anti-piracy drive would be on top of the agenda. Nasscom is coordinating with both the law enforcement agencies and hardware manufacturers to see that piracy is curbed. The amendment of the Indian Copyright Act is a welcome step. Today it is the most stringent in the world. Nasscom is taking upon itself to educate the users to see that piracy is curbed.
Financial Figures of the Industry.
Financial figures speaks best of the performance of the industry. Software exports from the country last year crossed the billion dollar mark to touch $1.5 billion with the domestic market recording $1.3 billion. In the next four years, the software industry has set itself a target of $3.6 billion for exports and $2.5 billion for the domestic market. I am sure we could achieve this what with the government providing the industry with the necessary sops.