India's Nasscom seeks restructuring to stay relevant

IT industry body is studying recommendations including revamping its governance structure, after doubts were raised over its relevancy since being formed 20 years ago.

India's National Association of Software and Services Companies (Nasscom) plans to restructure itself in order to stay relevant with the changing dynamics of the country's IT industry.

A six-member Nasscom panel headed by Infosys' chairman emeritus N.R. Narayana Murthy has recommended ways to restructure the industry body, which the Nasscom executive council will review and introduce by next month, the Times of India reported Wednesday.

Questions are raised over the relevancy of the National Association of Software and Services Companies (Nasscom) as India's IT business landscape changes.

"Nasscom needs to change. It has adapted itself to new things, facilitating capability building, articulating value propositions and enabling policy making. We are looking to double the size of the industry and if you're not open to changes, then you're not agile," said Nasscom chairman N Chandrasekaran.

"As always, we look at the future and what we need to do for that. We expect US$225 billion in 2020. Based on the changes expected, we are creating a governance structure. We will give you an update by March," added Som Mittal, president of Nasscom.

Nasscom's effort to reboot itself comes at a time when the US$100 billion IT industry is seeing changes in business models, platforms and products and solutions, the report noted.

The report comes a day before Nasscom kicks off its 21st Leadership Summit.

Doubts over association's relevancy
In a separate report by Business Standard Wednesday, some observers questioned the relevance of the association founded 20 years ago, and whether the IT industry has outgrown it.

Discontent with Nasscom comes as major IT companies are struggling due to changes in the business environment, the report said.

"Despite top line growth, leading providers such as Infosys and Wipro are struggling to meet shareholder expectations. Rupee and wage appreciation, competition from other low-cost locations, investments in non-linear growth, and the cost of hiring staff in non-English-speaking countries, particularly in Continental Europe and Latin America, are adding to the complexity of the challenges facing Indian service providers," said Thomas Reuner, principal analyst at Ovum.

"Nasscom needs to re-invent itself. It somehow seems that they are stuck in the old mode of lobbying with the government. They need to mature beyond this," added an industry analyst who declined to be named.

Kumar Parakala, head of IT advisory for Europe, Middle East and Africa at KPMG India, said: "[The] India success story in IT is not being sold in a manner it was told a decade back. There is a need to project India as a stable and the progressive destination for outsourcing supported by innovative environment. We need to tell this to the outside world with a greater momentum, energy and enthusiasm and Nasscom needs to do more and uphold India."

In the same Business Standard report, Nasscom chairman Chandrasekaran said the association has kept up with the times. "It is a unique institution. A lot has changed over the past few years. Nasscom has adapted to the changing times and evangelized the industry. We do have an aspiration of doubling the size of the industry and Nasscom will be there to identify the opportunities," he said.

Earlier this month, 30 software companies announced they were breaking away from Nasscom to form a new association . The Indian Software Product Industry Round Table (iSpirt) said it aims to share its expertise and collective experiences with members, and create a larger awareness in society and government about the critical role software can play, which are issues they cannot effectively carry out under Nasscom.

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