T&M Industry in India : Mapping the Procurement Professionals mind!

We continue to face major Economic pressure points today ,as our Current Account Defecit and fiscal deficit remains high.Our ability to fund the populist Government schemes is highly limited and the ratio of external debt to the GDP mounts because of tepid growth quarter over quarter.We have hit to the 10 quarters low as far as the growth deceleration is concerned.Imagine this country is like a typical Company where our growth is getting highly dependent on the external factors of our Sales booming and so the Profits must improve depending on better execution of orders and efficiently managing the cash and all costs-variable as well as the fixed.Likewise our capex and opex are maintained at a level to derive the better reasonable return on our equity/assets. Today this is under severe strain because of deficits on the trade account as well as the fiscal account.Only Growth can tackle these problems like Sales turnaround helps in a Sales Organisation.

This is what leads to the basic question of Growth in sales coming because of Leverage,and Asset Productivity.Our T&M companies in India have huge asset base in terms of smart and youthful manpower.Many of these T&M companies,particularly the MNCs and their channel partners have a huge cache of cash generated over the last decade! All these assets can be creatively utilised for leveraging the growth,and the industry overall can be big lever of prosperity ahead.Also many MNCs have a natural advantage today,as the INR is weakening against major currencies and is expected to decline till at least two to three quarters.These companies can help their own cause if they help the Indian market by announcing FDI allocation for the same products which they sold over last decade.Their companys local sales forecasters can help them with this pipeline visibility!

Turning the attention to buy side of the equation our Procurement of T&M needs to undergo paradigm change.Smart professionals need to take over from sarkari babus and officers mentality.They have to strike strategic advantage to their organisations (saving foreign exchange,operational knowledge sharing ,deferred payments on capex/opex conversion etc).They have to move from L1 syndrome totally and help organisations improve on the larger efficiencies and efficacy of procurement.T&M companies can sure take advantage of their product line and customers opportunities in this fiscal.

T&M Industry in India:Scale,Integration and Market Leadership needed!

For last several blogs we had been discussing how we can utilise the challenging time today to put several actions in our different activities so that the pace of T&M industry in India does not get broken and we can take a smoother ride.

The tough times really need tough measures and we need to enter an area where the T&M industry finds itself beyond its comfort zone,and where it has never invested sufficient resources of labor and knowledge workers. I recall the development of ADA software platform of Eighties in the US where a similar impasse was to occur in the hardware/software integration in Government programs.The industry responded by stretching allocations beyond normal that time.The programs itself were not successful as far as the original intent was meant,but the industry was inspired to run several multiple alliances and JVs in sevesal fields contiguous to the field!

I think seeing the last several generations of T&M professionals in the Country and the Regions in Asiapac, we feel some sort of test of time is going on here.Management of alliances is taking energy toll and integration of disparate cultures of business, geneti codes and geographies is the issue to focus.It is getting even more complex,when these T&M companies try to emulate the 'number of feet on the street ' success seen at big IT companies majors : like Cisco, IBM, Nokia etc.Cohesion and well integrated team does not happen in isolation, by a white knight approach or even parachuting some leaders from somewhere into the Company concerned.

For the T&M companies,managing partnerships becomes very crucial and critical.Good Pragmatic leaders have to tread a very fine line.They have to have a "trust but verify" approach and be ready for changing mid course. Managers must be prepared for "When the facts change- I change situation on the fly.Actually Management of partner ecosystem is a sort of General Management(with sales bias ) of course, where flexibility,integration of disparate interest group,flexibility and platitudes are all on the test of fire.We need in the T&M companies today these scaling,entrepreneurial and instinctive Leaderships this Fiscal.

T&M Industry in India : FY14 must see Defense oriented FDI now!

GDP Growth slowing, Fiscal Deficit, Trade account issues can all be taken very well by the one Mega sector of the Indian Economy.This sector is Defense. Sector budget currently is around 200,000Cr  and really becomes important where trade deficit because of import sensitivity is very crucial.This is a sector which is also purely expenditure driven with indirect benefits happening to the other sectors if local manufacturing can be triggered by the Global FDI.India needs newer technology in this strategic sector,and the limit of 26% is a big drag on it for Global players to come in.


Most of the leading Consulting Companies and Investment Banks are readying their Pitch Books to present all possible Indian and International investors for really leveraging this through FDI driven local manufacturing and technology assimilation.Because of larger macro picture,there is possibility that this time in FY14 we will see the cap moving to 49% if not higher.The implications to our manufacturing jobs,the sector and the GDP can be tremendous if long term foreign investment moves to India.Cascading effect to the T&M equipment sales and growth will be very significant.Since we are contemplating large capex and followon offsetting, software,services and support T&M equipment to boot.

Since the triggers of all these are current account deficit,import sensitive purchase and defense purchase policy related processes, the impact on jobs can be also positive for local industry.It is one sector where the immediate gains can be had as for the next five to ten years the Defense Requirement is expected to grow and the geo-political requirement expects India not to let up.I think after a gap of almost 40 years we should see big ticket purchases happening here for Electronic and so the derivative T&M equipment as well.