India 2008: responding to the growth imperative

As one of the world’s largest and most populous countries, India continues to rapidly transform to a market-based economy – and SAS is well-positioned to help companies across numerous industries.

By Sudipta Sen

With a sweeping and ambitious vision for liberalization, privatization and globalization, India threw open the doors to economic reform in the early 1990s – and the staggeringly successful results continue to accumulate. Ironically, only after thousands of years of culture, higher education, innovation and other important contributions to humankind in engineering, science, the arts and philosophy, India is now the world’s overnight success story. With 1.1 billion people living peacefully in the world’s largest democracy, India is emerging as one of the truly great economic and political nations of the 21st century. 

Unlike perhaps any other country, India stands as a shining testament to the power of globalization. India’s GDP is growing at an astounding 8 percent, and most industries are facing the pleasant challenge of managing exceptionally high growth rates. As the second most populous country in the world and the seventh largest (by area), India already boasts the world’s 12th-largest economy and the third largest in terms of purchasing power. And by most indications, its best days still lie ahead.

The financial services foundation
For decades, India operated under a protected, heavily regulated economy. It was common to wait years for basics like telephone service or an automobile. In the early 1990s, our government recognized that deregulation, competition and a greater commitment to capitalistic markets could fuel the growth of the Indian economy. While there is still a strong regulatory framework in place, competition has begun to produce long-sought gains across the country.

First and foremost, India needed a strong financial services foundation, and the momentum in this sector has been broad. We have well-regulated banking systems and a global stock exchange – the third largest in the world – that offer great transparency. The confidence that comes from knowing that money is appropriately managed in a robust system has had two important effects: It has attracted outside investment to help expand our economy and help other businesses grow, and it has created many first-time customers for banking services in India.

For instance, Indian banking and telecom industries are witnessing rapid growth in customer acquisitions, recruiting hundreds of thousands or even millions of customers every month. Although that’s a challenge almost any executive would love to have, it’s a challenge nonetheless because these organizations cannot simply target or accept any customer. They must identify and pursue higher-value customers and prospects through appropriate campaign management and analytics. This presents SAS with an excellent opportunity to enable them to analyze their customers and intelligently identify those who have a greater propensity to respond to cross-selling and up-selling offers.

Data quality is paramount
In their efforts to obtain a single view of the customer, Indian companies – in financial services, especially – are hampered by data quality challenges that are, in many ways, unique to our country. In India, it’s not unusual for a surname to be spelled five or six different ways in English. And there is no standard addressing scheme across the country. Our city names have changed – for instance, Bombay is now Mumbai. Street names change, too – but most citizens will still use older street or city names. 

At SAS, we responded to this complexity by creating a “quality knowledge base” that sifts through the various permutations and combines common records to produce a single view of the customer. While somewhat less glamorous than strategic or customer-facing systems, this knowledge base is a key enabler for moving business in India to the next level. 

Competition arises
In many respects, India is still an early adopter’s market when it comes to business intelligence (the BI market is expected to grow by 25 percent annually). However, with a continually strengthening financial system as its foundation, the Indian economy has been fertile territory for a variety of companies across virtually every industry.

SAS BI solutions are finding strong acceptance in several key industrysectors, including:

Telecommunications: Approximately 20 percent of the Indian population owns a cell phone. This represents a tremendous untapped business opportunity. Large players in this market are turning to SAS for solutions to help them develop and expand their market presence. Similarly, satellite television service providers are bypassing expensive centralized infrastructures to deliver their services to tens of millions of people.

Retail: As the Indian economy continues to grow and mature, demand for high-end luxury items and high-value services is quickly escalating. A recent report found that 100,000 citizens have assets of more than US$1 million. 

Automotive: In the face of the rise of a broad and durable middle class, more than 70 different autos are available in India – from the traditional Marutis and Hyundais to high-end Bentleys. Sales of luxury autos are expected to rise 30 percent in 2008.

Manufacturing: In the growth story of India, manufacturing plays apivotal role. With a domestic market of more than 1 billion people, there’s tremendous internal demand for automobiles, consumer goods, white goods and more. From a foreign trade perspective, India’s exports are expected to reach nearly $200 billion in 2008, with cement and steel among the chief export goods.

Pharmaceuticals: Clinical research organizations are drawn to India, which is home to both local companies and research facilities of some of the world’s leading pharma companies. Market watchers predict India will, in the next five years, become home to a $5 billion life sciences industry. For instance, Indian companies are contributing to the drug discovery process, and SAS tools play instrumental roles in helping them aggregate and analyze their critical data.

Information Technology: According to NASSCOM, the IT trade association in India, IT was a $48 billion industry in India in 2007 – and it’s expected to reach $64 billion in 2008. That growth comes from both outsourced services as well as product development and innovation in semiconductors, application software, networking, communications and more.

Government and Public Sector: The challenge for our country is to achieve a broad style of economic growth – what Prime Minister Manmohan Singh calls “inclusive growth.” SAS tools can help in a broad variety of areas, including public health, customs and excise, statistics, and more.

What’s more, merger and acquisition activity has become an important driver behind SAS’ own success in India. For instance, HDFC Bank recently completed a major acquisition of Centurion Bank of Punjab. Such developments lead to a reassessment of an organization’s risk profile and risk-management policies – which plays to the strengths of SAS solutions.

SAS: a strong presence in India
SAS India employs 350 trained professionals in Mumbai, Bangalore and New Delhi, with an R&D center in Pune that provides key research for the global SAS community and concentrates on industry-focused solutions.

SAS customers in India span industries and include organizations like Novartis, Standard Chartered Bank, GE Capital, Citibank N.A., Pfizer, ICICI Bank, HDFC Bank, Reserve Bank of India, Centurion Bank of Punjab, Bajaj Allianz and GlaxoSmithKline to name a few. According to IDC India, SAS India is the leader in India’s business intelligence market.¹

¹IDC’s India BI Software Market Report , June 2007.

Bio: Sudipta K. Sen is the Chief Executive Officer and Managing Director of SAS Institute (India) Pvt. Ltd. and is responsible for setting the company’s strategic direction. Sen joined SAS in 2004 and has established SAS as India’s market leader for business and enterprise intelligence.