The document discusses the problems facing the linear business model of IT services companies in India, including high attrition, wage inflation, increased competition, and declining profit margins. It recommends that companies design a long-term strategy to transition to a non-linear business model. This involves leadership focusing on the long-term, acquiring product companies, building solutions and intellectual property, productizing offerings, and targeting specific customers.
The document discusses the problems facing the linear business model of IT services companies in India, including high attrition, wage inflation, increased competition, and declining profit margins. It recommends that companies design a long-term strategy to transition to a non-linear business model. This involves leadership focusing on the long-term, acquiring product companies, building solutions and intellectual property, productizing offerings, and targeting specific customers.
The document discusses the problems facing the linear business model of IT services companies in India, including high attrition, wage inflation, increased competition, and declining profit margins. It recommends that companies design a long-term strategy to transition to a non-linear business model. This involves leadership focusing on the long-term, acquiring product companies, building solutions and intellectual property, productizing offerings, and targeting specific customers.
Neelakshi Borah PGP13098 Nikhil Dudhe PGP13100 P Swami Sachidananda PGP13101 Patankar Narendrasingh PGP13102 Pratik Gaokar PGP13105 Bucking the Trend- A look at Zyme Solutions Non Linear Business Model for IT Services from India Problems of present situation/linear business model. Human Resource *Attrition *Wage inflation *Huge employee base leading to complexity
Market Condition *Market pressure leading to increased competition among vendors *Competition from low cost destinations Emergence of cheap labour country Appreciation of the Rupee and declining profit margin due to rise in operating cost RECOMMENDATION Design long term strategy to convert linear to non linear Provide visionary leadership focus on long term instead of short term growth pressure Mergers & acquisitions of product driven companies Build solution accelerator SBP-to reduce dependence on man power Build Intellectual Property Productize the service offering to build a more scalable business Define target customer you want to serve (Its ok to say no and forgo some revenues) Build unique competency which will be hard to Imitate by competitors Look for profit driven growth rather than revenue driven growth Avoid pricing based cost arbitrage model Train & develop expertise on pre-developed software application Avoid strategic convergence