In 2013, when Accenture released its vision document, it marked the beginning of a major transition in the history of the 29-year-old company. From a business enabler, technology had started assuming the role of business creator, causing serious disruption across industries. A shift from legacy to digital had become the need of the hour. “We said every business is going to be a digital business,” says
Mohan Sekhar, senior managing director, Advanced Technology Centers – India. From that year on, Accenture adopted an aggressive mode to grow its digital business and today it constitutes about 60% of its revenue.
While foreign firms such as Accenture and IBM were pivoting to the new business, tier-I Indian IT firms — TCS, Infosys, Wipro and HCL Technologies and their American counterpart, Cognizant — were caught in a dilemma. On one side, there were the legacy businesses to be protected, on the other side the industry was going through a digital upheaval. According to Sekhar, the disruption was so big that 30% of the Fortune 500 companies in 2010 dropped out of the list by 2017.
The double-digit growth days of the Indian IT industry came to a halt. Switching to digital had become an imperative, and Indian companies took a precious two to three years deciding on the course of action. Over the past two years, tier-I companies have struggled with the digital transition and cloud-led disruption, which led to declining revenue growth. According to a report by Edelweiss Securities, digital businesses, which roughly make up 20% of their revenue, will continue to drive overall growth and contribute nearly half of their revenue by 2021 (see: Digitally enhanced). But, unlike the offshoring opportunity, the growth path will not be linear and will definitely be more challenging because the small guys have an early-mover advantage.