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Past Issue: SEPTEMBER 2011
From the Editor's Desk
The Times They Are A-Changin’
By Ester Martinez, Managing Editor
Sep 1st 2011
Are we going through or likely to go through a double dip recession? Or will there just be a short lull in global activity? Without attempting any boisterous predictions on that front, we look to offer our own take on the continuing debt crisis - that we are headed for a correction in global economic activity and much hinges at the global level on China’s plans to increase domestic consumption and shift focus into building a services economy.On the domestic front, there is a combination ... Read more »
Cover Story
IT/ITeS Winds of Change
By G K Kashyap & Ester Martinez
Sep 1st 2011
The $88 billion IT/ITeS industry faces challenges ranging from wage inflation, talent deficit to sustainability of being a preferred outsourcing destination. The turn of events in the US, a key market of the IT/ITeS industry, has further accentuated the industry’s problems. The question worth pondering over is how best can the Indian IT/ITeS industry turn the current challenges into opportunities and embark on the path of becoming an industry worth $225 billion by 2020. People Matters ta... Read more »
Cover Story View: China is not a threat at this point
By Ganesh Natarajan, Vice Chairman & CEO, Zensar Technologies
Sep 1st 2011
While on the demand side, there have been budget constraints from clients amidst uncertainty; on the supply side, there are signs of increasing protectionism with visas becoming tight in countries like USA, parts of Europe, Middle East, China and even Africa. Unless the global economic situation improves, we will see sluggish industry growth 2-3 quarters down the line, because there is always a lag effect between global slowdown and IT industry slowdown. This is not a good sign for industry gr... Read more »
Cover Story View: Emergence of non-linear models
By Hari T, CMO & CPO, Mahindra Satyam
Sep 1st 2011
In the Indian IT/ITeS industry, shortage of industry ready talent is a major challenge. Talent in India is overpriced and this will cause a significant problem for the industry and the annual increase of 15 percent in talent cost is not sustainable in the long-run. This increasing talent costs will make India less competitive. At the same time, China is nurturing its talent pool and in the medium to long term, it has the capacity to make great strides in the services arena in particular, as i... Read more »
Cover Story View: Despite being labor surplus, India suffers from talent deficit
By NS Rajan, Partner and Global Practice Leader – People & Organization, Ernst & Young
Sep 1st 2011
It is interesting to note that the very factors that have helped the Indian IT industry to flourish are responsible for the growth of its Chinese counterparts as well. Government initiatives and policies, sizable and low cost workforce, infrastructure, exports, etc have augmented the growth of IT/ITeS industry in both countries. However, China enjoys certain advantages that roll the ball in its favor. Firstly, unlike India, which is highly export-oriented, the Chinese IT industry has a huge do... Read more »
Cover Story View: Time to think bold
By Phanish Puranam, Professor, London Business School
Sep 1st 2011
Clearly, the erosion of cost advantage, which is itself in part driven by the limited employable talent pool, is the big issue. So far the Indian IT companies have relied on a model in which revenue is linear to headcount. To meet their growth targets and market expectations, they would end up having to grow in size to unrealistic levels. That cannot happen and they know it. Every one of them is trying to find sources of non-linear growth; from products, technology platforms, intellectual prop... Read more »
Cover Story View: Competition will propel innovation
By Raghavendra K, Vice President and Head, Human Resources, Infosys BPO
Sep 1st 2011
India needs to move up the value chain and look at building capability for high-end processes. The industry very clearly has to move from a transactional mindset to focus on driving outcomes and support a complete transformation to be prepared to take this industry to the next level. There is a growing realization that if we are not competitive, if there is no innovation, and if client sees no significant economic benefit, there is every chance that opportunities will move to newer geographies... Read more »
Cover Story View: The Indian IT-BPO Industry - ‘Shine-on’
By Som Mittal, President, NASSCOM
Sep 1st 2011
The phenomenal growth of the Indian IT-BPO industry over the last decade is a matter of pride for us, and an inspiration for other countries. Business leaders today realize the need for moving up the value chain to successfully deliver higher value, complex business critical services that are not transactional and require deep domain expertise.Drivers for growth India has the world’s largest pool of employable talent and service delivery infrastructure across multiple geographically di... Read more »
Cover Story View: Cost of talent needs to keep pace with productivity
By V. Laxmikanth, MD, Broadridge India Financial Solutions
Sep 1st 2011
The Indian industry has been active for over 20 years, and over time we have built a great amount of depth in terms of our systems and processes, and not just in terms of number of people. The maturity level of the business and process of off-shoring in India, being an early mover, is so in-depth that it is not easy for other countries to replicate. It will take time for others to surpass India’s potential for scale in business. The industry has undergone change through series of trying ... Read more »
Cover Story View: Build capabilities for integrated solutions
By Vasant Dhar, Professor, Stern School of Business, NYU
Sep 1st 2011
Increasing pace of globalization, focus on English language and soft skills, and cost arbitrage is what makes China focus on the IT/ITeS market. While the competition in the low-end jobs may increase, it is not a disruptive threat to the Indian IT/ITeS industry even though margins will continue to face pressure. The more significant threat is talent. It is becoming increasingly difficult to get good talent. Domain skills do not come easily, and hence poses a serious challenge in terms of movi... Read more »
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