Labor arbitrage business model has inbuilt sunset

India based IT service providers are largely banking on wage arbitrage
rather than on efficiency or productivity or excellence as the business driver. While labor arbitrage is good starter to attract business, it is a flawed business model with inbuilt sunset to it. It is a ticking time bomb in other words.

Just throwing low cost resources to a problem is no longer impresses customers. Customers are expecting vertical solutions from providers. End to end integrated solutions with outcome based measures rather than effort based measures are going to be the future business model.

Very thoughtful perspective by Peter Allen in an interview published in IT Business Edge. I completely agree with this view point.

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© Dhandapani Ammasai, 2011. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given with appropriate and specific direction to the original content.

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