Wednesday, March 4, 2009

The Grand Indian IT brigade

India and IT are somewhat synonyms in one way or the other. India, being the leader in outsourcing (more about it later) boasts of high revenue from IT. Till 1991, India used to be a big importer. Only after a lot of amendments to the existing tacky policies, India could retrace all its past glory (YES! India used to be a lavish exporter even before the British came to India).

A lot of companies emerged and eventually flourished as a result. Companies like Infosys, TCS, WIPRO, Tech Mahindra, Satyam, Patni, LnT Infotech and umpteen other small Indian IT enterprises became the front runners amongst exporters in India.

So what exactly do they offer?

They benefit from something called as outsourcing. Now, what is outsourcing? It would be much easier to understand this strange business practice using certain analogies.

Consider a shirt making company that makes variety of shirts. Now, is it required for this company to necessarily manufacture buttons, threads, collar material and other stuff? No not at all, pertaining to various constraints they avoid manufacturing all such stuff by themselves.

So, what they do is - They outsource (out + source) such material from some industry preferably devoted to manufacturing of that particular stuff. By doing this, they can focus on their core competence instead of thinking about other mundane stuff. This practice removes the pain off the shoulders of the shirt manufacturer and let them focus on their shirts.

In IT scenario, the big organizations of US of A and European nations prefer to get their IT operations outsourced, so that they can focus on their core competency - be it Banking, Manufacturing, Marketing, Advertising, or whatever.

They could have a full fledged department for carrying out their IT operations, but in that case their focus would be diverted and also they would require a lot of skilled professionals to carry out miniscule works (Compared to their major business flows, IT is just a small section).

One more reason for not doing their IT operations themselves is – Transformation of the business knowledge into IT panorama. So vendors come into picture, these vendors provide that ‘IT competence’ for the businesses. And where are the major IT vendors based on this planet - Ofcourse India!!

Now the question arises - why India? Because we are cheaper than our western counterparts; we know their language very well and above all we have learnt the tricks of trade over the period of time. The internal competition has made us smarter and more practical.

Before presenting another analogy about this scenario let me throw light upon some of the familiar IT companies:

Oracle: the Giant Database

SAP: the ERP pioneer

SUN: java fame, open source giant

MICROSOFT: who on earth has not heard of MICROSOFT

IBM: the real hardware giant, much into software development nowadays

YAHOO: the pioneer search engine, email provider

GOOGLE: the Giant search, the API/code provider and much more

ADOBE: .pdf fame, front end beautifier (particularly with FLASH)

All of these are the driving forces of the IT. I would like to do a little more detailing with the aid of another analogy that would explain the IT scenario as a whole.

Consider all the companies mentioned above as car manufacturers. They manufacture both customizable as well as non customizable cars. They design, innovate, and refurbish these cars from time to time.

And all the Indian companies (IT VENDORS) are either drivers or mechanics or both for these cars. As IT vendors, we drive the cars manufactured by some of those WESTERN car makers, we also modify, service, maintain, beautify, manage, buy/fix accessories for the owner of the as per his needs.

Now the drivers can also be put into varying categories based on their driving styles or the kind of car they prefer to drive:

  • Some are good at driving the robust and reliable JAVA cars (INFOSYS, TECH MAHINDRA)
  • Some are good at driving and customizing the automatic SAP cars (TCS, LnT Infotech)
  • Some like to drive the legacy vintage cars (Patni)
  • Some like to do a mix of all (WIPRO)
  • Some are significantly into servicing (SATYAM- yes after all the ups and downs it is still a major player)
  • Some provide stylish chauffer driven services (MINDTREE and many other small companies)

Some prefer to drive big cars, some small; some drive petrol cars, some diesel; some drive ready-to-use automatic cars; some others modify them according to the needs of the end customer and some offer chauffer benefits. The entire-grand-Indian-vendor-brigade is like a driver to the cars manufactured by US or European companies (particularly German and English).

All of these cater myriad of customers, aiding them in various IT tasks related to various business processes and existing at various stages of the business-process-life-cycle, in brief their operations can be pointed out as:

  • they modify and customize the ERP systems as per their needs,
  • they provide support and maintenance for the existing systems,
  • they provide solutions to ease out the businesses using latest technologies
  • they help customers to migrate from an old car(some legacy system) to a new one (some new technology).

But the only thing that trips me is being a Vendor - we don’t really get into R & D and bring up new products on our own.

I am not suggesting that the driver is not important. The driver is certainly an integral part of this complete process because the customers are unwilling to drive/service the car themselves; they have to have a driver cum service guy to do all this as per their needs. But how great it would be if our own IT giants (vendors) also try their hands at some R & D and develop newer technologies for themselves to work upon.

This is not like Indians are not a lot into product building but they do all this being in one of the ’car making companies’. Most of the guys in those western companies are Indians only but not in any Indian company that could develop such new technologies.

Have a look at the ‘credits list’ of Acrobat reader:


And you will find every third name in the team is that of an Indian. So, ultimately Indians are driving everything everywhere in IT, but not the way that can help Indian companies come out of the garb of being a service provider.

The car manufacturers do listen to the drivers extensively because ultimately they are going to drive the cars and not the manufacturers or the real Customers.

But my urge to the Indian IT vendors is to spend more on R & D and develop newer technologies to cater the clients more ergonomically; provide solutions that help them in planning and creating a clearer picture of their businesses and ultimately helping them gain benefits where they actually want, that is - the BOTTOM LINE (i mean in monetary terms).

P.S.- Please put in your thoughts to provide a new direction to this debate.


niket said...

yeah i agree with u... its the Indians who are actually driving the IT industry around the world.... but still as a company we are lagging behind the west... i don know whether they (Indian Companies) had tried to develop products in the past or not... it seems as per today's conditions that they has not even tried.... we dont have a single company which can compete with the west giants...

Debashish Mukherjee said...

i think i'll agree with niket..we can't compare ourselve with some of biggest west giants....
India is the only country which produces cheap and skilled labour, and yet we lack somewhere.
May be the politics....or investors are terrified with the fact to invest the money to any new venture.
I am damn sure if bill gates started his venture in india he would have failed to do so.

The car is driven by big bullies in world market..we are just forbidden spur gear which lets the car rolling.