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Article by Mohan Babu

Market recovery will give way to pent-up demand

United States continues to be the destination for the brightest and the best, even though the number of HI aspirants has come down considerably, writes Mohan Babu

It is the time of the year when experts huddle together and go over the year that was and profess their thoughts over what the future holds. Experts in every area — business, technology or sciences - come out in the open and expound about the future. This year, unlike the previous years, we are not seeing too many predictions, perhaps because of the haze in the market. The IT industry that was known to spew buzzwords is getting tired of selling the old wine in a new bottle. After seeing a decade of spectacular growth, veterans of IT are re-assessing their role in a slowing economy.

Out of a personal interest in exploiting opportunities and hoping to find a method in the madness, I have been a keen student of the US technology and job market. The eternal quest is to find the opportunities even in this slowdown. One thing is certain, survivors of 2000-01 will look back at the slowdown and downturn and think of it as a learning experience. The next time we see a boom, it will be tempered by the memory of this downturn. From the viewpoint of an Indian professional, living and working in the US, a few things that immediately come to mind are:

US still continues to be a destination for the best and brightest: The number of people coming to the US on H1 visas has slowed down considerably because of a number of reasons. Companies do not want to spend precious dollars on paperwork, visa sponsorship etc, especially when they can find suitable candidates in the local market. However, people with good skills and specialisation in nascent technologies are still hard to find, and companies will continue to sponsor H1 visas for such candidates. H1 will no longer be a ‘get to the US quick’ passage but a tool that companies will use to leverage their talents and availability of skills.

There is a pent-up demand from IT projects: Business leaders think from one quarter to the next. The past few quarters have been really slow. During a slowdown, apart from laying people off and slashing costs, business executives are deciding on the basis of immediate business requirements. A vast number of projects were shelved precisely for this reason. The moment the economy starts to thaw, there will be a renewed focus on IT projects that users — internal and external, have been waiting for. One or two quarters of good results and companies will revisit their IT strategies. The survivors of this downturn will be around to pick up the pieces and help in the rebuilding process.

Outsourcing as a viable business model: In the past, Indian companies touted outsourcing as a model to capture the efficiencies of “cheap” labour. However this was really not true since experienced programmers and techies were making a beeline for the US, UK, Canada and Europe, leading to an increased cost (of hiring and retaining) back home. The slowdown is perhaps a blessing in disguise for Indian software houses which has now able to afford fine talent. Indian companies are also finding that they can get an audience with executives in the US who are looking towards outsourcing as a viable cost-saving measure. Skilful and innovative marketing will propel Indian companies towards bigger projects, especially as the economy heads north.

Core Applications: Bread and butter will continue to grow. Shorn of buzzwords, IT and software systems are nothing but a means to help a business to become more streamlined. It is only in rare cases that an IT system provides the “core competency” for a business model. Most of the time, software systems help businesses operate more efficiently. Businesses in the same industry use similar software systems, the extra benefit one acquires by computerising is negated when everyone is using comparable systems. Businesses need IT systems to perform at an optimal level and to keep up with competition. Requirement for professionals conversant with functional areas of business, be it telecommunications, web-enablement, CRM or financial planning will continue to grow. Even during the current slowdown, smart companies are consolidating their IT systems and not getting rid of them. As the economy improves, there will be a renewed focus on upgrading and enhancing the core systems.

2002 is going to be a year of B2B — Back to Basics. It is expected that the US economy will start seeing an element of growth towards the second or third quarter of the year; and when that happens, the B2B model will become stronger. I am not predicting the return of the roaring nineties but a return to steady, sustainable growth models. That’s the way it should have been in the first place.





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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    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©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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