Slowdown-hit IT firms gear up to get new deals
Indian IT cos reeling under pressure in winning new contracts as clients hold back IT spending decisions and defer new deals
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- IT firms hiring for sales team in US and EU
- They’re keen over $100-mn worth deals
- Delay in projects further impacting
- IT firms suffering from lack of incremental revenue
Bengaluru: Indian IT services companies are aggressively pushing up their sales strategies in order to corner more numbers of outsourcing deals amid increasing competition among services providers.
As clients hold back IT spending decisions and defer new deals owing to the economic slowdown, IT companies are facing pressure in winning new deals. In order to clinch projects, many IT firms have hired new members, while others are getting in touch with clients on frequent basis.
“Of course, there are questions being asked (before ramping up projects). That is the new normal. What we have done is we have increased the number of sales headcount so that we can provide the comfort to the customer. We will make sure, there is good closure to the deal,” CEO & MD of L&T Technology Services, Amit Chadha told Bizz Buzz.
Similarly, the new CEO of Cognizant Ravi Kumar S has been engaging with clients across the world as part of his outreach efforts in order to accelerate revenue growth.
“To date, I have met either in person or virtually with C-suite executors from more than 100 of our clients representing nearly all of our industry segments and all of our major geographies,” Ravi Kumar said during the analyst call.
Sources in the know said that big firms are undertaking restructuring in their large deal teams as more numbers of cost takeout deals come to the market. They said hiring is being done in the US and European geographies for sales people, who can help companies win more than $100 million worth deals.
Moreover, the importance of large deal team has also enhanced owing to delay in ramping up projects.
In the fourth quarter earnings, all large IT firms and several mid-tier firms have reported strong TCV (total contract value) numbers. TCS reported strong deal pipeline with fourth quarter TCV (total contract value) coming at $10 billion, which included one mega deal worth around $750 million with UK-based insurer Phoenix Group.
For FY23, the company reported a TCV of $34.1billion. Infosys bagged large deals worth $2.1 billion in Q4 while for FY23, the total deal wins were at $9.8 billion. Wipro won $4.1 billion worth outsourcing contracts, had a large deal TCV (total contract value) of $1.1 billion during the quarter ended March 2023.
Despite such sound deal bookings, Indian IT firms were not able to add incremental revenue coming from such contracts as most clients despite signing those contracts didn’t start those projects. Therefore, sales team of IT firms are nudging clients to start project work.
Of course, there are questions being asked before ramping up projects. That is the new normal. What we have done is we have increased the sales headcount so that we can provide the comfort to the customers. We will make sure, there is good closure to the deal
- Amit Chadha, CEO & MD of L&T Technology Services, tells Bizz Buz
