National Association of Software and Services Companies or Nasscom, the non-profit set up 21 years ago to help scale up India's information technology and business process management industry, is changing its focus as digital disruption and US visa barriers hit the traditional outsourcing business model of member companies.

TThus, in June, Debjani Ghosh, the association's president, was at Dubai Internet City to cut the ribbon for a "landing zone" for Indian small and medium enterprises (SMEs) willing to tap the West Asia market and create jobs in the region.

Ghosh now hopes to create similar SME zones in the United States, Europe and Japan to help Indian IT and BPM companies to find their feet globally. Recently, the association took 45 small companies on a tour of five American states, including New Jersey, North Carolina, Ohio, Michigan and Texas.

In many places, the state governors met the Nasscom delegation. Countries across the world are eager to welcome Indian small businesses, says Ghosh, who was previously the South Asia managing director of Intel Corporation, the US-based chipmaker.

New Business Climate

Essentially, there are two problems facing the $177 billion Indian IT BPM sector, says Keshav Murugesh, Nasscom's chairman. One is the rapid disruption being brought about by digitalisation for which the industry needs to reskill itself and keep thinking on its feet.

The other issue is the increased rejection rate of H1-B visas (on which outsourcers send Indians to work on client sites in the US) and the perception that American jobs are being outsourced to India.

His solution? To develop India as a hub for innovation and co-creation with skilled manpower.

“The future is less about protecting turfs and more about skills and transformation of business. Our focus is to encourage the world to invest in India and take advantage of our unique position to transform companies in this era of tech disruption,” says Murugesh, the chief executive of WNS Global, one of India’s biggest BPM companies.

Nasscom, he says, has tried to bust the myth that India is taking away US jobs.

He presents three points. First, while most of H1-B visas (76% in FY2017) went to Indians, a big chunk went to employees of US-headquartered multinational corporathat American jobs are being outsourced to India.

Second, according to a research by IHS Markit, average wages for Indian IT professionals in the US was nearly $94,800 while Indian companies paid $96,300, he says. This demolishes the myth on low wages.

Third, Indian IT companies in 2017 directly added $57.2 billion to the US gross domestic product, a figure higher than the GDP of six American states, he adds. To keep doing this and more, India also needs to be at the top of IT industry trends.

There are many ways in which Nasscom is tackling the digitalisation and IT employee re-skilling challenge. In the last 10 years, Nasscom’s membership has changed, forcing these new measures. Many member companies are now focused on the domestic market and run business-to-consumer ecommerce operations, unlike older members that are traditional software and BPM companies.

Scale-up Challenge

According to Ghosh, Indian IT has a unique problem with innovation. "As a culture, we do not know how to scale up innovation". Hence, much of Nasscom's focus will be on creating models that can be scaled up, she says. This means fast digitalisation of the industry.

"Whether you are tech or non-tech, big or small, digitalising yourself or others, creating solutions for digitalisation is the single-point focus. Some of our new members are banks and hospitals," she says.

One key project is FutureSkills, which was created based on research done by the Boston Consulting Group. The tasks are to ensure that college courses are linked to the needs of the IT industry and that employees of member companies are re-skilled in latest technologies. The programme covers 10 new technology areas and 155 new job roles.

Earlier this year, there was an indication that change is on the way when Nasscom refused to give out IT industry guidelines for 2020.

Ghosh says predictions have become meaningless in a constantly evolving business environment. Nasscom will instead develop a set of 10-12 parameters that it will talk about every year. "We've thrown away the crystal ball."