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Updated: May 3, 2011 16:21 IST

IT consulting in India

D. Murali
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If you are a regular at some of the knowledge-oriented events in Chennai, a person you will most likely run into is Srinivasan Viswanathan (Vishy), Founder CEO, VTeam Global, and Executive Director, TiE Chennai, My recent meeting with Vishy, however, was at a polling booth in Mylapore. Interestingly, the theme of our discussion was ‘IT consulting in India,’ rather than politics. Our conversation continued over the email.

Excerpts from the interview.

Looking back at the evolution of IT consulting in India, what seem to you to be the most significant milestones?

I would say that the early seventies was the start of IT evolution in India with large organisations buying computers and establishing data centres. The Tata Computer Centre evolved into Tata Consultancy Services recognising the enormous potential for software services and applications. The initial breakthrough in “export” of programming talent (late 1970s) helped in establishing the quality of talent available in India.

The mid 1980s saw some multinationals (e.g. Citibank, Texas Instruments, Motorola) establish captive IT services organisations, and Indian entrepreneurship ventures, which led to a steady growth in the sector, even if mostly in staffing/ body-shopping.

Our IT services’ capabilities got a major fillip in the mid-1990s with Motorola, COSL and CITIL successfully assessed at higher levels of maturity on CMM. This enabled Indian service providers get more respectability and visibility and contributed to the growth of projects and products business.

The next key milestone was in the late 1990s with the Y2K market and the downward revision of telecommunication costs. This triggered the takeoff stage of rapid growth. Since then it has been a cruising phase for the industry. During this phase, due to organic growth as well as through M&A, the Indian services providers have been able to move into the higher value-add segment of architecture, IT strategy, etc., as well as value-added services such as tech support and testing. Additionally, during the first decade of the twenty-first century, the deal sizes have also increased and capabilities strengthened to manage multicultural workforces.

Is enough of IT consulting happening from India for the world? Would you like to highlight our strengths and recent successes in this regard?

The growth of IT and ITES has been phenomenal and has exceeded what any one could have dreamt of in the 1980s. In spite of competition from other countries, India has been able to hold its position as the most sought after destination. It is also heartening that more and more services are being sourced out of India, and these services are truly based on knowledge and capabilities, rather than just manpower numbers and cost arbitrage. I think India could offer a lot more in such KPO areas as engineering design, research, product development etc.

Our biggest strength was cost (the primary reason why the customers chose us in the early years), and it will still be a factor – but it is not any more the only reason. The other strengths – scalability, process, skills, and innovation (where the products arise from Indian market needs) are already equally important.

One other area where I think there is long-term potential is complete offshoring of IT management including data centres, capacity planning etc. We see mostly piecemeal capabilities in these areas today, though more integrated service offerings (solutions) are emerging from a few of the large service providers.

Where are the gaps and weaknesses in Indian IT consulting?

There are several gaps and weaknesses, in my view. For example:

* Many of new types of services (e.g. KPO) have evolved mostly from captive shops of multinationals. There is scope for many more innovative products and services, especially in non-technical, business areas, if our companies put themselves in their client organisations’ shoes, and thought about ‘what next.’ Thought leadership in managing business processes requires sound knowledge of the client’s business, and strong collaborative partnerships with clients.

* There is enormous market for applications/ services specially focused at the professional/ micro/small business sector; these include supply chain, HR operations, finance/ accounting, which can be exploited.

* Not having a scalable model for serving the small and mid-market segments (most companies concentrate only on the Fortune 100) is an area that can be improved. The big untapped potential is the mid-market; and its needs and constraints are different from those of the large players. What suits a big company buyer may be an overkill for a mid-market buyer. The sales, delivery and engagement models for mid-market companies need to be thought of differently to make inroads into that segment.

* Not ready yet for leveraging cloud computing in a big way.

* Escalating people costs, not just in terms of salaries, but in terms of overheads; especially the management cost escalations and layers.

* People attrition and short-term orientation, since this adds a substantial learning and knowledge cost to the cost structure.

* Communication skills in tier-2 and tier-3 cities, which adds layers to the supervision and management costs.

Are there takeaways from China, as regards development of IT consulting?

China has invested a lot in English education, setting up of Technology Parks and encouraging entrepreneurial ventures, specially attracting Chinese non-residents. In my assessment, tier-1 companies in tier-1 locations in China are fast catching up with Indian IT capabilities. However, the next tier companies and cities look about 15 years behind India’s right now. Raw technical skills are available in abundance and not lacking in quality. What is lacking are the project delivery and customer relationship management skills, besides domain and application knowledge.

What, according to you, are the skills that our IT professionals should seek to cultivate to be relevant to IT consulting?

Interestingly, the skills they need to cultivate are mostly non-technical! Some areas that come to my mind are as follows:

* Understanding the problem/ clients’ needs and business;

* Thinking one step ahead of client about their problem/ needs and possible solutions;

* Project management discipline; and

* Open communication on a real-time basis with client, not just relying on weekly reports.

Any other points of interest?

The growth of IT application and services needs in the local industry is a key factor for success, since the local market is a good learning ground, and it creates innovation.

IT is not any more the most preferred industry for fresh engineering graduates, from the IITs! We need to think about the impact of this on long-term resource mobilisation. This may /should result in more work-at-home employees (e.g. housewives, students) and further downstream outsourcing to tier-3 cities.


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