Indian IT has a Hobson’s choice

While Indian IT services had abundance in demand, over the years it has been on a slow descent. With explosion in investments on digital services and change in global policies around off shoring, the rate of descent has accelerated. It is time to stop ‘digital washing’ traditional IT services. Digital has left us with only one way ahead, either realign or rest.


Chetan Shinde

Sr Vice president, HR

Times are changing and the days of Indian IT maintaining large margins seems unreal. Let’s face it, there are too many global players who can do what was once exclusive to Indian services industry and increasingly they are doing it at a lesser price. Eastern Europe is a big indicator of this, and they are nailing the coffin for Indian cost arbitrage. With enterprises reluctantly welcoming the disruptive era, it has been touted that automation and service on digital technologies like AI and ML will undoubtedly redefine the outsourcing industry
While, the Manufacturing and Auto industries have been privy to the wondrous works of automation and robotics in transforming the way in which their businesses operate, it is no more exclusive to these sectors. AI driven Bots are gaining traction across healthcare, insurance, banking and BPM industries. It is time to think beyond off shoring and exciting opportunities lay in front of the Indian IT industry.

“Although there is a steady 3% rise in technology spends, these investments are now going towards high end digital services like IoT, AI and machine learning.”

The question of the hour is how prepared are traditional Indian IT companies to thrive in digital. Furthering their business in the unpredictable tides of innovations, older service companies are now slowly but surely backing on indigenous products, big data and coding.
Digital initiatives are skill driven and don’t need more coding hands, they need more hands on data. We are heading into an era where there is no glory in algorithm and a vast majority need to be working on data. However, vast numbers in Indian IT aren’t close to even algorithms, they are close to bug fixing and ticketing. The divide between what digital services need and what the Indian IT workforce has is huge.
High end digital services are not offered en masse. They require a concentrated set of highly specific skills that many of our engineering candidates are not trained in. Digital services don’t require workforce pyramids with heavy middle and bottom levels. A promising indicator of this can be found within India, and surprisingly amongst the much considered examples of tech laggards, the banks. In the past 6 months, almost all prominent Indian banks are showing partnership intents with fintech start-ups offering digital services on cyber security and blockchain, and exploring new idea on boarding ways like a hackathon.
There is a mismatch in understanding resource dynamics of digital services, and pink slip counts in multiples of thousands is a silent indicator of this. While re skilling exercises might soften the blow, there isn’t much it does above softening.
Not every aspect of this transition is clear, but we do know one thing for sure. Technology is perennial and has emerged as the sole survivor in any tide of market transition. Today’s tech teams are versatile, unique and networked. They aren’t about just coding. Surviving the off shoring revolution requires a good understanding of how product/tech teams operate and what makes them truly different from the good old Indian service engineers our households have bred over a decade.
We see a radical shift in the IT landscape and outcome with quality is going to dominate over effort with process. In these changing times, the preparedness of companies to attract and retain the purpose seeking and learning driven workforce will largely determine success and will lead to positive outcomes.
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