{"id":729071,"date":"2013-04-04T10:23:20","date_gmt":"2013-04-04T04:53:20","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=729071"},"modified":"2013-04-04T10:27:48","modified_gmt":"2013-04-04T04:57:48","slug":"turning-coding-coolies-into-solution-architects","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2013\/04\/04\/turning-coding-coolies-into-solution-architects\/","title":{"rendered":"Turning coding coolies into solution architects"},"content":{"rendered":"

It hasn’t been easy for the Indian IT outsourcing sector since the global meltdown in 2008. Even as the recession abated and markets began improving, unemployment and economic instability in US and Europe compelled governments to create more favorable conditions for domestic markets. But that’s just the tip of the problematic iceberg that’s denting IT outsourcing growth in India.<\/p>\n

IT outsourcing has contributed significantly to the Indian economy. In the initial years, outsourcing came easy \u2013 Indian IT professionals were cheaper, work could be done faster with more people on less pay, and the Indian Rupee was not as strong. IT companies made huge profits while keeping 20-30 percent of their workforce on bench at a time. Today, the situation is quite different.<\/p>\n

Challenges galore<\/h3>\n

The demand for IT services from US and Europe (accountable for three quarters of the work and revenue that came India’s way) has dwindled on account of their recovering economies. Furthermore, the popularity of cloud solutions has enabled more SMBs and large enterprises to manage well with a smaller workforce. Businesses no longer need bulk IT labor from India. If they have expectations, they are for experienced professionals who will add measurable value to their business.<\/p>\n

Research firm Ovum reveals that the total contract value (TCV) of outsourcing deals in India fell by 30 percent during the last 2012 quarter. That’s a record low in 9 years.<\/p>\n

Indian IT<\/a> companies are seeing much slower growth; lesser attrition and higher productivity owing to enterprise mobility, automation and cloud implementations. Consequently,\u00a0recruitment\u00a0have frozen. IT freshers who were recruited on-campus in 2011 are waiting for appointment letters as their employers (like HCL Tech) try to cut costs and maintain profits. The golden dream of joining an IT company for a 6 or 7 figure annual package has just gotten tougher for college graduates.<\/p>\n

Another challenge for Indian IT outsourcing companies is the emergence of countries like the Philippines as alternative IT\/ITeS destinations.<\/p>\n

Opportunities<\/h3>\n

NASSCOM<\/a> has forecasted a reduced growth rate of 11-14 percent in IT outsourcing exports in 2013-14. However, the good news is that of the top IT outsourcing providers in India \u2013 Infosys<\/a>, Wipro <\/a>and Tata\u00a0Consultancy Services<\/a> (TCS) \u2013 only Wipro fell short of the guidance predicted for the quarter ending December 2012.<\/p>\n

Indian outsourcers like Infosys are promoting “mini CEOs” to tap their intellectual property to the maximum rather than hiring new people. The demand for experienced personnel who can adapt to changing environments and stay productive is growing and companies are taking steps to retain such talent. As Tech Mahindra<\/a> HR, Sujitha Karnad, points out \u2013 coding coolies are pass\u00e9, the demand now is for solution architects. That’s where the new outsourcing opportunities lie.<\/p>\n

IT companies are also diversifying their service offerings to stay profitable. Infosys has signed a 5 year agreement with RWE Supply and Trading (RWEST), a leading European energy trading house to provide technology services based on ‘gain-share’ \u2013 Infosys gets paid when RWEST makes a transaction on the platform.<\/p>\n

NASSCOM predicts that the Indian IT industry will generate $225 billion by 2020 by leveraging on emerging technologies, mobile and cloud platforms, social collaboration, SMB outreach, and the integration of core business applications. It’s not an\u00a0unbelievable\u00a0target as India is well placed to address new opportunities and emerging markets. For all you know, this shakeup could be the re-making of Indian IT outsourcing as it matures in value as well as viability.<\/p>\n

[stockquote]INFY[\/stockquote]\u00a0[stockquote]WIPRO[\/stockquote]\u00a0[stockquote]TCS[\/stockquote]\u00a0[stockquote]HCLTECH[\/stockquote]\u00a0[stockquote]TECHM[\/stockquote]<\/p>\n

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