* i jes, and chac ao, had “The Imin’ thing, ofcourse, wasthe company he had founded Al seating coinedenss Dham see its pesformance tumblc aver the past six months. It "Af n't he shot tha magnificent thought himself, or itwas ust dhat work was affecting his game: 4 under par, theday after his company’s stock touched an all: Hunting for his golfball in the woods, Dham found hi vembering an incident Se ea ‘en his bi the ‘The occurrence concerned Chirag Dave, the company’s head of HR. Dave bee Bee eM ed campus of one of India’s best B-schools, and he'd never had occasion co regret! aiiclgewortece fresh-faced recruithad grown into an astute manager when it came 10 aNABING By yesterday, Dham had seen a different side of Dave: ara meeting committee, the man had come acrossan almost hysterical individual mutcering slowdown in the US economy was forcing companies (o cut their infotech-spenc jion business that Dham tried to play things down. “Remember the ¥2K? Or the eutro-dollar conversion followed? We wereona high. But we were also worried: What next? Well, we gor over it. didn’twe? We used those opportunities to build relationships. We will do the same thing no. of the company’s executive J statistics about how the But Dave wasn't to be silenced so easily. “However, the situation was differenc chen; business was booming. There-was room for all, Besides, every client was hiking IT spend. There was no talk of cost- cutting. No one in the IT sector thought of idle capacity. Today, 40 per cent of our engineers are on the bench. The fundamentals of business have changed.” Now. placing the ball on the tee at the" hole, Dham was thankful for che conference call chat had rerminated their meeting. He really had noc had the answers to the questions raised by Daye and other members of the executive commie. “We'll continue this on Monday”, he had reassured Dave, and the rest of the team, He didn't find that prospect appealing arall. Dham had always been the cheerleader. What his colleagues didn't know was that, this time, even he was worried. Several software biggies, with whom AI had consciously avoided competing in the past were now invading is terivory; a price-war was looming large on the horizon; and all major customers had unilaterally reduced billing rates, berween 25 per cent and 40 per cent. °IFour existing vendor cannot match these billing rates", missive fiom one customer had said, “we have no option, but to look for new vendors” THE BEGINNING AND THE BEGINNING OF THE END Dham had founded A1 in the heady days of the early 90’ inforech boom. The ji comy y carve ua «niche for tselfin inking companies o their suppliers, Dy Son cas Partners, and customers. The task, as Dham never Contd...TT Chapter 5 Industry Analysis @ 179 Fed te listen, | i hy: then wines ed rome programing, ahd lew ofaiain tchance/Sokware Uh cn “Yim pure programming, And AT managed to tap the the US, fr didn't boast any Fortine 500 na dozen SME swore by Al, and kepeenmim back WK NOW, that ys bulk oF thes, Y focus wag f COMPANY'S m tohurt-The Us : ‘ teat had thiashet 4 Mens bouEy§ Hirt. "The US aA angie largest marlee: worss, the had ‘Agreed, ‘ ne Feo iSite thieay WaK ONE a; it tip, whore Presidene (4 V2SMEs. ham, ne hie senior management AA could Dave scerningly lose it, Marketing, everyone CONES), hy Marker ad bccn geath ti. Rajeev Marwalt, the eompanyés Viee- Hatalays bron ea cutie 0H Fave te Sica PRET E past vite B Nagesch9 ink Na the link n danger of snapping altogether Pr thebench, wiih ae VAL build ay Dh. ee ranger marketing cea by OFA S Wotkfotee an the henieh tha Y co-operating engineers whawere hadi appeared Tike bud id Tewasny thar th Had icon swarkinn function, Onew devel aon cco Hr sesn thingscoming Ithad. Since early 2001, 2 team of engineers MONRO conduct nn nt Mele she guidance if Hetnacrl Shah, the head of Al's projecss Products thar wasnt Motlshopson e-biz for Al's euarommens und the other was SS thar would support the design, implementation, and mattagement of e-biz op a set of applications “Both initiatives,” hada done his job wel, hah hag ne ready, Pointed 94 torell our Na tome tha su sted he wouldn't have anyone imply he T the share. Wes Concern, term imperative ough Fe aan’ about the lang. cerm steanegy of ee ‘ainung existing clients, by reducing b g0 forropline of accractingnew clients; it was abour billing rates ifit was necessary. “Wee should improvemencs in customers Stowsth even if iemeans reduced ind operational efficiency. Say 00 with us. We must makes thy The rest of the meu their rates, problems Dham had been weakly su Projects to Al when the call had Any i-etter ideas now” nargins. The lattet must be-offsct against Productivity When we help customers reduce their costs. the ac we go char extea mile for them” he had argued cithad passed in a chaotic blur, Shalth: and Chintay, Parekh, ad warned about sofrware biggies cutting the CFO, had insisted that movi ng (02 fixed-free coneract would solve all Eesting a possibtealliance with a software major, which could outsource ome, “Only”, Dham said aloud, ashe readied co ikea swing, “I dont have QUESTIONS 1. Wharshould Al Technologies do toretaintsexsting customers? How can AI technologies build fences around its ‘turf? 3. Whatinitiatives Al should tindertakeso asto ‘ex ploit the emerging opporcunities once the downey encds? 4, Doyoutadvocatea change in the positioning of At technologies ~in orderco anne the decline in ies revenues? How can Al improve its cash flawsin the short-term? 5. How can Al climinate pockecs of inefficiency at various levels?