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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.
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