One of the key issues confronting the top Indian IT services firms is how to differentiate themselves from one another. If the top five companies all offer essentially the same array of services, how does a corporate customer chose between them? On the surface, it seems like that leaves only price as the deciding factor. And, in many situations, I'm sure that's the way it will work out. But I don't think that means that price is the only lever. Over the long haul, customer satisfaction will be the key differentiator that separates the best IT services companies from the pack.

This issue came up last week, when I conducted a "fireside chat" at the big Software 2007 conference in Santa Clara, Calif., with S. Mahalingam, TCS' chief financial officer. I asked him about how TCS differentiated itself from the other top Indian outfits, and he ticked off the array of services TCS offers. But Infosys, Wipro, and Satyam offer the same portfolio, so I asked him again. He really didn't have an answer.

My answer is this. Delivering IT and BPO services that truly satisfy customers is extremely difficult. Over time, the Indian companies that do this consistently over a wide range of service offerings will gain the reputation as organizations that truly deliver the goods. TCS recently began a global branding campaign and is spending a ton of money on advertising. I'm sure that will increase awareness of the company and help it win some business. But that's not how it will gain brand equity. Customer satisfaction is how.

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