Friday, March 07, 2008

How to write about Indian IT

The Indian IT industry is a pretty big industry by most standards. It is an industry that will employ close to 4 million people, contribute about 7% GDP for the country in 2008, give or take a few (Nasscom).

But there are many who simply cannot stomach the fact that this is, in fact, an industry. They are those who missed the bus either in the job market, stock market or even in setting up a similar business. The choices they made in hoping for something better did not work out and the IT industry happened and India suddenly found itself on the growth path, much to their chagrin. By creating of millions of jobs (and for every job it creates, there is also a multiplication factor) resulting in the improvement of standards for millions of Indians, it has made them envious. So, if you are asked to write about the Indian IT industry now, heres how you go about it.

Start off with the facts and figures, (Nasscom is a great site for facts on the industry). Then add almost immediately that a billion dollar industry be built by pure luck or pure circumstance or both. Of course, it is as easy as Ctrl+Alt+Del. So, wear your blinkers.

The cost advantage is the first thing to attack. With the rising value of the rupee and the increase in wages in India the cost advantage has to come down. This much is true. But even taking it at face value, a 1:3 gap is still a big gap - effectively you can hire 3 programmers for the price of 1.

Then, make a general assumption that Indian IT services does only data entry. Will low value added jobs and easily automatable tasks go out of the door. Of course, they will sweet people. And guess who is doing it? Those idiot Indians themselves - many companies have automated themselves out of data entry jobs. Ask around and those dumb call center guys will tell you. They will tell you how they did not like data entry work and how they innovated and created an application that did the work for them. Guess who made money on it? Guess whose productivity improved? Guess which customer was happy? And guess who is managing those applications? Guess who got some more work.

Indians in IT dont think. Indians in IT cannot think. Indians in IT are stupid. Repeat till you are convinced. That was easy, wasnt it? But how did they automate their work? Did they think about it, did they? But isn't India the back office, those million minions, who just do? How did they think? Well, like anybody and everybody else, they have a head and they often use it, some times more than a hat stand. Now, most of these thinking does not result in VC deals - because they were executed for their customers. Some of them will and some of them are.

Now, you have to get a bit angry that the standard of living has gone up and you are unable to get cheap servants and drivers and houses anymore regardless of the fact that you too benefited out of this equation in some way. The employees have everything, a job, a family, a house, a cook, a maid. Well, did you ask the cook and maid where they were working before this? Maybe you should. Also check how their kids are doing in school - since they surely would be going to school? Check with these employees about the condition of their fathers offices and working conditions. To say that the present generation is not thinking or complacent is somewhat less valid than a statement that all journalists who write about Indian IT are stupid.

There is a talent shortage, there is a talent shortage, there is a talent shortage in India only. Philipines and China, apart from Morocco and Hungary are the best destinations because there is no talent shortage there. How? Any figures on attrition in China?

Finally, paint a simple forecast that the industry will die in 2015. So, like I said, the industry is dying because of the dollar value reducing, the Indians refusing to think, rising wages and because everybody has a good standard of living. It will help if you also take a piece of data and use a minuscule piece of data to come up with this grand analysis.

Once in a while it will help if you include that the industry is dominated by upper caste Hindus, there is caste discrimination. A comparison to sweatshops (like the ones in more progressive countries) or children working in IT companies might be helpful if you want to sound particularly odious. And there are more facts you can include - let me know if you need more info.

Anyway, here are some facts: Did you know that in many companies salary is adjusted to company performance? Not sure in how many industries in the world, will you see such a radical compensation structure. Count on the fingers of one hand please.

Also, future contracts exist and are available, so currency risks are hedged - somewhat, but this is a big risk. Did you know that some of these companies have margins of some 30%? They can bring it down to 5% if they wish - and they still havent, not as of 2008. Why? Because customers are willing to pay. How can you assume that currencies will move only in one direction?

Did you know that many of these (stupid, dullard, non thinking) companies are present in "nearshores" and "smartshores"? Already? To take advantage of lower cost or proximity to customers? Did you also know that some of them sit with an excess of 2bn USD in cash which they can use to buy out companies - as they have already done (yes, they have) - consulting firms, BPO operations, chip design firms - the whole hog.

Even if you do, act as if you dont care. You are out on a hatchet job remember.


5vd33p74 said...

Absolutely agree :), very succinctly put. IT has also helped the pseudo-statistics that are weekly generated by many of our mainstream media. Adultery, social disbalance, crime, skewed-relationship surveys are easily made to sound convincing by just including junk data about the IT demographic.
Another thing that is perturbing is the assumed implicit equivalence of BPOs and software companies.

Anonymous said...

You left out the part where they are supposed to ask: How come India hasn't produced a Google or a Microsoft. Pompous, Muslim-hating Jackasses like Atanu Dey have been after the IT Industry's life for ages, as have unemployed ivory tower morons like Dilip D'Souza. What more can you expect of tabloid Rediff, when these so-called 'intelligent' bloggers decide to put something down just because so many Indians are proud of it. It is pure 'Tall Poppy Syndrome'....

Shreyash said...

I have been reading simimlar articles for more than a couple of years now. Initially they used to say that India cannot produce something like an Accenture or an EDS. Now most Indian biggies can buy EDS and 3 are comparable to Accenture.
Not producing a Google or Microsoft is another argument. But frankly - for the benefit of the country - we need more TCS's and Wipro's and Infy's as they mean more employment.
We have grown from nothing to 50-60 BUSD in 15 years and even if we stabilise around 150, that would be a great success. That does not mean the death. It just means stabilization because of market forces!!!

Data Entry India said...
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Guha Rajan said...

Good post....No doubt, Indian IT industry acheived great heights, but Indian IT industry cannot rest on its laurels. Its a testing time now for IT services company.

I had written about this in my blog as well

Cignus Web Services said...

That's is true. Indian IT is at a position where we have to use our experience and skills to reach new heights.

It's not time to rest but to push harder to stabilize and gain more respect and faith in Indian IT.

Comments please.
Cignus Web Services
- a Data Mining Company

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