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 it builds its bi-lingual skills to service the English speaking markets. As China builds its capabilities it will be able to displace some of the businesses that have been a traditional Indian stronghold.
In the light of above challenges and in a bid to stay competitive and service the evolving market needs, Indian IT/ITeS companies are graduating to offerings that provide a scope for non-linear growth. Companies are now investing time and effort to develop non-linear models, wherein revenue growth is not tied to headcount. This is being done through solution platforms that are replicable and provide outcome-based pricing. Companies are now far more aggressively experimenting and investing for this.