The next Dinasaur - Revisited

Could't help but revisit the article which i wrote sometime back. Its getting more and more relevant to any IT organization in the current economy . As the clients expect more from less , its becoming more and more important for the companies to drive efficiency in the processes , reduce redundant layers(THIN) , and hire and retain multi skilled talent. Needless to say only the most multi skilled and nimble survive this 100 years floods :)

--------------------------------------------------------



Is the Indian IT Industry the next dinosaur? . Or unlike the dinosaurs they will be nimble and adoptive enough to adjust to new business scenario and will evolve in a efficient and long lasting companies ? Will the basic strength of the Indian IT companies will become there weakness .. i .e low cost human resources ? These are some of the thoughts which will be explored on this blog as i think indian IT industry is at a cross road and is going to go through a paradigm shift which will weed out the lead footed IT companies .How is today's business scenario different from Year Y2 K when the real Indian IT boom started ?



Key per me are listed below .1. Cost benefit on pure head count basis : This was 1:4 in 2000, now its close to 1:2 due to increase increase in salary in india and depreciation in $ value

2. IT was the only high paying area in 2000 : Now with a booming economy there are many other areas which are more high paying at lower stress.. Like mfg, telecoms, aviation. IT is not the only neither the first choice

3. "World is Flat " : It has become more flatter in last 7 years . Event in one part of globe directly affects another part. In other words if india becomes less beneficial to client , they will move to other countries.

4. Indian Companies in 2000 were small hence the pyramid was balanced, today the Base is very big, which means more people at less experience level, leading to inability to go up the value chain , hence not able to demand higher billing to overcome the increase in cost.

5. In 2000 IT industry hired from the Best and mostly engineers, in past 2-3 years to increase headcount they have added non -engineers from other colleges also. These resources will help increase the base of the pyramid , not help go up the value chain.

6. In 2000 the within India IT market was next to zero, now with economy booming , and increased IT'ization from within india, there is a requirement for IT industry to divert there resources. Otherwise some other outside companies will take this.These are are key drivers which are driving the paradigm shift.



Need of the hour for indian companies are



1. Increase in resource utilization efficiency so that they can demand better billing at lower head count

2. Rationalize the Hiring : In today's environment Head Count Increase does't directly add's to revenue

3. Retain the experience people even at higher cost : These people will drive the billing.

4. More focus on within India IT projects to reduce dependence on external projects.There are few companies which have started thinking on above line , Infosys is one, otherwise this shakeout is going to wipe out a few companies.