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Article by Mohan Babu

Working Abroad - Small players, big problems

Outsourcing has not translated into big returns for small players. It is the Big Ten that use their marketing muscle to land plum projects from the biggest international clients, writes MOHAN BABU as he recounts his recent trip to India’s IT capital

During my recent trip to Bangalore, I was prepared to expect a dynamic, buzzing software industry and I wasn’t disappointed. With dozens of multinationals and hundreds of small IT companies, it is definitely a vibrant place. There is a definite drive and enthusiasm here that I could feel while attending the TiE (The Indus Entrepreneurs) conference. I also got to meet a cross-section of people from the industry and media, and enjoyed the discussion with Prashant Rao and Akhtar Pasha, Bangalore Bureau representatives of Express Computer. A few random thoughts on my observations follow.

Nasscom, a big-boy’s club? Although industry bodies like Nasscom and CSI are active in issuing press releases and publishing regular industry surveys, there is a general feeling that these bodies are like a “big boys” club. This feeling might be stemming from the lack of co-ordination bet-ween the big players and the others in the industry. Another reason could be that Nasscom is trying to emerge from the shadows of its charismatic leader, late Dewang Mehta. The model of international bodies like ACM (Association for Computing Machinery) could be studied by powers-that-be to extend Nasscom’s offerings. Professionals and companies in the US find that ACM provides the platform for interaction and assistance with publication of technical white papers, journals and interaction among SIGs (Special Interest Groups).

Outsourcing has not translated to big returns for small players. A common refrain among smaller consultancies and IT shops is that the Big Ten, including the likes of Infosys, TCS, HCL, Wipro, et al, use their marketing muscle to land plum projects from big name clients. Given their lack of marketing expertise, the smaller players are unable to make inroads in the international marketplace. There is probably an explanation for this: During the heyday of Y2K and dotcom, it did not take much to start a micro-consulting company. With just one or two marketing representatives in the US, UK or elsewhere, even small companies could find talent in Bangalore and Hyderabad, sponsor their work visas, ship them abroad and start billing the client. This model has all but vanished although some of the erstwhile body-shoppers tried to morph into outsourcers. Without high-end project management skills and delivery capabilities, many fell flat leading to consolidation in the Indian IT industry. Interestingly, ru-mours of EDS’s bid for Satyam Computers were fuelled by just this kind of trend in the industry.

Where are the jobs? Not a week goes by without an article from a big company in India announcing that they are ramping up recruitment. This sometimes leads to a flood of resumes landing at the desk of the HR people at these companies. How they sift through thousands of resumes before zeroing in on a few hundred candidates is anyone’s guess. However, the high intake in engineering and professional colleges during the past few years is leading to an equally high number of graduates coming out, many without any firm offers finding the barriers to entry extremely high. Those lucky (and talented) enough to be selected in a round of campus interviews escape this drudgery, content to switch jobs after a few years experience under their belt.

Youth are still enthusiastic about technology. The movement of outsourcing and BPO jobs to Indian shores is creating a renewed interest in technology among the next generation graduating out of technical schools and universities. This trend, fuelled by offshore outsourcing is expected to continue for sometime in the near future. However, this also means that the young professionals joining the IT industry should not expect to be shipped to foreign shores anytime soon. The reason multinationals are moving to India is to capitalise on the low cost of operations here which will be negated if they start sending people overseas. Added to this is the increased restriction on visa issuance to foreigners in the US, UK, etc, due to the slowdown in their economies along with a renewed security consciousness. Therefore, an increasing number of jobs are moving to India making Bangalore, Hyderabad, Pune and Chennai technology hubs.

These trends and others make for an interesting environment for the Indian software industry that is hardly over a decade old. Considering the young age of the industry, we can and should expect some turbulence and at least for now the Indian IT industry seems to be weathering the global downturn with its characteristic zest.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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