Nordic deals fuel digital transformation surge in India’s IT sector
NEW DELHI, INDIA — After a two-year hiatus, digital transformation projects are making a significant comeback in India’s IT services sector, with a notable focus on cost-saving measures. This resurgence is largely driven by a series of high-profile deals originating from the Nordic region.
Over the past four to five months, Indian IT giants like Infosys, HCL Technologies (HCLTech), and Tata Consultancy Services (TCS) have secured substantial contracts involving extensive transformation work with Nordic companies.
Infosys has partnered with Denmark’s TDC Net, a digital infrastructure provider, and Sweden’s Ikea.
HCLTech and Wipro also inked deals with Finnish companies Oriola Corporation and Nokia, respectively.
TCS, on the other hand, landed multi-million-dollar contracts with Denmark’s Nuuday and Ramboll, both leaders in digital connectivity and communications.
Nordic region’s growing influence in IT
The Nordic region’s prominence in the digital transformation landscape is expected to continue growing.
Gaurav Vasu, CEO of UnearthInsight, predicts that the Nordic market will expand by over 10%, driven by transformation deals secured by TCS, Infosys, and HCLTech. He anticipates that the top four IT firms will close the year with over 25 deals in Europe, with 40-50% originating from the Nordics.
Peter Bendor-Samuel, CEO of Everest Group, cautioned that while the Nordic region is ripe with transformation opportunities, the current surge may moderate as the most accessible opportunities are exhausted.
Global expansion beyond Nordic deals
While the Nordic region is a significant contributor to the resurgence of digital transformation deals, other regions are also playing a role.
TCS has signed a $355-million deal with U.S.-based Xerox, and Cognizant has secured three contracts with UK-based Hays and Whitbread, as well as US-based Victory Capital.
Further expanding the global footprint, LTIMindtree and Wipro have won transformation deals with South Africa’s Absa Bank and U.S.-based Hanesbrands, respectively.
Shift to savings-led transformation
Industry experts highlight a shift from cost-takeout deals to what is now termed “savings-led transformation” deals.
According to brokerage Motilal Oswal, clients are moving away from purely cost-cutting measures to focus on high-impact transformation initiatives. This includes resuming data and ERP modernization projects that were previously delayed due to inflation concerns.
Sudhir Chaturvedi, President of Markets at LTIMindtree, noted during a recent earnings call that key clients, especially in the banking sector, are now prioritizing high-priority transformation projects. These projects, which had been paused last year, are gaining momentum as clients aim to reduce technical debt and enhance their systems to better support their businesses.
Nitin Rakesh, CEO and Managing Director at Mphasis, echoed this sentiment, stating that “transformation and savings combined is kind of, I would say, the trend right now.” He emphasized that clients are leveraging artificial intelligence (AI) to save money while accelerating their transformation efforts.
