Delivering the key-note address titled 'Indian IT Companies at Crossroads--Looking for next Winning Srategy,'' at the annual summer event organised by the students of PGP in Software Enterprise Management at the IIM-B here last evening, he said the Indian IT professionals should now look to learn Japanese and other European languages as a 'juicy'market beckoned the Indian IT industry in these countries.
The industry was over dependent on the two countries, which contribute to 79 per cent of their business (US 61 per cent and UK 18 per cent), and now it was time to look at Japan and countries in Central Europe. The European market had grown by 65 per cent CAGR during 2004-07 and this was where the future growth lay, he said.
''The IT companies should remove the word offshoring from their dictionary within three years. You will have to outsmart emerging IT giants like Russia and China if you have to remain in business.
Growing one's IT business is going to be tough,'' he said.
Mr Mittal called upon the IT industries to cash in on the boom in the domestic market, which was growing at 34 to 38 per cent.
''Like the telecom boom India witnessed over the last decade, the domestic IT market would grow on similar terms. Many companies, especially MNCs, succeeded in getting their piece of the pie from the telecom boom.
''The Indian IT companies should not let go this chance go out of their hands and capture this local market with good future planning.
The potential is there and we have to conquer it,'' he said.
Mr Mittal said India should be proud of being low cost destination and this was the reason it had achieved an IT exports of 65 billion US Dollar. ''While the US IT companies pay 80 per cent of their cost towards salary it is only 50 per cent in India. However, we have to bring down other costs,'' he said.
The challenges for the IT companies were to scale up to offer end to end solutions and exploring new markets.
The government should help the industry by quickly bring in more reforms in education and skill building. ''Inefficiencies in ecosystem should not come in the way of the industry's competitiveness,'' he said.
Mr Mittal said it was time the IT industry spread to tier two cities and other smaller towns. Only seven cities including Bangalore (36 per cent) Delhi (17), Chennai (16) and Hyderabad (15) delivered 95 per cent of IT services and products and this should spread to small cities.
''By the year 2020, 65 per cent of growth will happen in these seven cities. The local authorities cannot wish away the IT industry. They have to provide the industry which is contributing 5.5 per cent to the GDP suitable platform,'' he said.
Mr Mittal said the industry-faced problems like 'tradable talent', which needed to be made employable. The problem posed by the demand for the skills in other sectors will soon hurt the IT industry even more.
Some way must be found to solve the problem of high lateral hiring which was leading to higher attrition, he added.