Is India IT industry really safe ?
DATE: November 11th, 2008
Indian IT industry is safe: NASSCOM
Reading a recent press statement by NASSCOM will make you believe that all is well in the IT world and the downturn will not affect the IT industry. It seems like the IT industry does need to keep it’s chin up but wonder if statements like this do reflect the true depth of the problem or is the leadership sending wrong messages ?There is also this believe that rushing away from the US markets to explore other geographies will provide the necessary growth momentum needed by the industry and firms should be looking beyond the US. A number of firms which are in the middle of the crisis are already doing that so I don’t believe they need to be told to look elsewhere.Indian IT industry has been one of the biggest beneficiary of the globalized , coupled world and I believe it is wishful thinking to believe it will not be affected by the downturn.The global economies will never be the same, at least in the short and medium term. With nationalization playing a major role in all the countries across the world, federal government owning large industry leader, globalization is going to take a whole new meaning and form. How and what shape is anyone’s guess and there are experts out there (not me) which will tell you how it will evolve – but I believe at this stage many of them are just guessing intelligently (or not)!As industry players, IT vendors need to be prepared for that rather than sit on the sideline hoping all will turn well.Job creation, preservation and security become central theme to economies going through the crisis and with politics mixed in creating local jobs will take priorities over global operations. India is a key example where we saw the intervention of politics in Jet Airways layoffs and have heard the politicians ‘warning’ infosys, wipro, satyam and the likes to avoid layoffs at the cost of profits (Employees on rolls must not be retrenched)It is hard not to expect the same out of the developed countries where the crisis is worse and the government visibility to ‘do something’ high. When countries across the globe follow a similar model now, it would wrong to cry foul about protectionism.
The question I believe the leaders in the Indian IT/ITES industry need to be working to figure out is how the new globalized world will offer them opportunities to grow. Yes , the margins will not grow like they did in the good old days, yes the hiring will be slow and yes the industry has to offer more than cost saving rather than promises of more than cost saving. I believe a number of Indian vendors large and small are attacking this problem with a multitude of tools , including better cost management, reducing dependence on certain verticals, geographies, offering additional services at higher end of the spectrum, managing cash and forex better. Some like Genpact and Cognizant have managed to pleasantly surprise by re affirming guidance’s. So the industry is hard at work and the leadership organization within the country needs to provide a more realistic scenario with the right dose of optimism.
For current workforce or people aspiring to enter the workforce in the IT/ITES space , the realistic scenario is that the opportunity has slowed down in the short term and they are all wondering is there a light at the end of the tunnel. This is very real and a number of people I have spoken with, see this effecting them personally and question themselves on their future prospects. The world today is a knowledge economy and having a skill set which is global will always be valued. Skills built in IT/ITES combined with right education will continue to offer opportunities within and outside the country. What the workforce has to realize though is that the growth story last few years was just that – growth story and should not taint their views of how a long term mature industry behaves. Pay hikes of 30% year over year, moving companies because someone offers you a better lunch menu – were never and should never be considered long term career moves. Some people were at the right time at the right place and got those benefits but that should not be looked upon as an entitlement or industry best practice.
The industry and the global knowledge economy still offers a very compelling reason to be a part of the industry, even though in the short term the prospects look hazy.
Mohit Sharma is an experienced entrepreneur and a globalization expert. He is currently the CEO of Corrystone Global Partners, a globalization firm helping firms build and execute their global operations strategy, manage outsourcing compliance activities and provider globalization partnership opportunities. contact info: msharma@corrystone.com.
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