The market is finally beginning to show signs of recovery, and we are seeing many signs of that- many interesting deals have been signed in the last 2 months- The Lehman Brothers deal with TCS and Wipro, valued at a $70 million, is probably the most recent and high profile one. Other equally significant deals include the $83 million contract won by Covansys from Sirva and Euro 22 million contract won by Hexaware from Deutsche Leasing AG . But that’s not all. Many mid-sized and smaller companies are also slowly but surely gaining market traction, and that is good news.

Having said this, everyone realizes that the rules of the game have changed forever. We reiterate that companies have to be more market focused. Investments in sales and marketing have to go up, while enrolling new clients is becoming tougher as competition has definitely intensified, and spread across borders.

Given this situation, it is about time that IT companies adopted a twin pronged business development strategy of growing existing accounts along with acquiring new clients. Some of us may say, so what’s new about this- this is one of those motherhood statements! Sure, but most Indian companies, including the large ones, have not quite figured out what it takes to partake of a significant share of their client’s IT budget.

Consider these facts-

• Infosys has over 300 clients, but the proportion of million dollar clients is less than 30%.

• Wipro has added over 100 clients between September last year and this year, but they have contributed only around 15% to the overall topline.

Clearly, Indian companies are doing very well in terms of new client acquisition, but not enough is being said about client penetration and growth.

We need to learn a few lessons from global consulting companies, for example, Accenture. More than 80% of the firm’s top 100 clients have been with Accenture for more than 5 years, and more than 50% of its clients have been with the firm for over 10 years.

Indian firms need to focus much more consciously on building stickier relationships and ways to do that is the main theme of this issue of Confluence. We have a company that stands out in terms of adopting a strategy of nurturing few large clients and penetrating them, as opposed to the more prevalent strategy of adding numerous clients and increasing the client base from a derisking perspective. This issue carries an interview with Mr. Vipul Doshi, COO, Interglobe Technologies, and formerly VP at Kanbay. At Kanbay, Vipul successfully managed and grew the HouseHold Bank account, which is their largest account.

While on the topic of key account management, we believe that companies need to focus a lot more marketing efforts on nurturing customer relationships. In times like now, the tendency would be to allocate all marketing dollars on initiatives aimed at lead generation. While this is important and required, companies need to invest in wooing existing customers as well. Few companies in India have a focused program aimed at existing customers. Infosys stands out in this respect with its highly regarded annual customer meet “Milan”. Started about 5 years ago, the event has improved year after year, and starting this year, Infosys holds annual customer meets in the US and Europe. Other CRM activities could include the increasingly popular webinars for customer segments, newsletters and one-to-one events and programs for key customers.

In our last issue, we had mentioned that innovative and creative ideas, backed by relentless execution, would be required by companies in crafting marketing initiatives. There cannot be a better example of this than the “Wharton Infosys Business Transformation Award (WIBTA)”.

We feature this initiative in this issue’s Best Practices Section.