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Indian IT Industry: Time for new Sigmoid?

When will the business model of Indian IT service providers change from Labor arbitrage model to value arbitrage model?.

When will the delivery excellence be measured by the business value generated rather than number of new grads inducted into the team?

When will the innovation will be counted by the number of patents/ideas generated rather than the number of bodies ramped up?

Are Indian IT service providers too narrowly focused on Q to Q margins and not forward investing for future growth?

Isn’t the 90’s labor arbitrage business model has outlived and progressively getting less relavant?.

Isn’t it time for a new sigmoid?


On a burning platform

I highly recommend you to read through the recent letter written by Nokia CEO Stephen Elop to employees. Brutally honest and well written. Full marks from me.

We too, are standing on a burning platform, and we must decide how we are going to change our behaviour.
The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

See the letter here

Have breakfast or be a breakfast

“Who sells more cameras in India” was the question posed by my marketing professor Dr YLR Moorthy to the class. There were many enthusiastic hands that went up and the answers ranged from Canon, Nikon, Kodak to Sony. However, when the professor said that the largest selling camera maker in India is Nokia, it hit me hard that tomorrow’s competitors may not be the obvious traditional competitors. It can come from anywhere, anyone and any size. This emphasizes the fact that organizations need to be agile, continuously scan the landscape, innovate in products, business model and services to keep ahead of the curve.

Probably Sony never thought Apple as its competitor. Kodak never dreamt Nokia as its competitor. So who will be future competitor for Indian IT service biggies like TCS and Wipro?. Is it nimble players from other geographies like China’s NeuSoft or Mexico’s Softek? Or Is it that some new “innovation intensive products/services model” that will make the current “labour intensive IT services model” uncompetitive?. Or Is it combination of the above and more elements?. Only time will tell.

Dr YLR Moorthi’s Article

Re-living student days

Recently I have enrolled for executive management education at IIM, Bangalore. Couple of things that struck me are – the tranquility of the campus, profile of the professors, case study and interactive based teaching approach and the project work. It’s has been more than 18 years since I left college. I am re-living my student days now – again. I have another 6 months at IIMB and I am enjoying every bit of this great knowledge acquisition journey. Yes, I have learned few of those MBA lingo as well. 🙂

Poll: Key pain points in offshoring

What are the key pain points that you have experienced while offshoring IT services?.

I am looking for case studies for the research that I doing on this subject. I welcome a detalied note if you have a story to share. The details would be kept confidential.

Poll:Top reasons for offshoring IT services

What are the top compelling reasons for your organization to work with offshore IT service providers.

To Be Strategy canvas of offshore IT service providers

I have been pondering about the offshore IT service providers “as is” strategy canvas and the ways to improve the strategy canvas so as to improve the value and reach.

Below is the “as is” strategy canvas as I see it.
Strategy Canvas Present
In the current scenario, the top tier Indian IT service providers equal or better their global MNC peers in the spheres of offshore delivery capability, process maturity, resource/skill availability and pricing. However, the global IT service providers exceed Indian IT service providers in almost all other spheres as outlined in the above diagram. These include average resource quality, service offering range, consulting and domain experience, relationship management and project management maturity, employee diversity, employee longevity(.i.e less attrition) and cultural compatibility.

Below is the “to be” strategy canvas that I envisage for the Indian IT service providers.Strategy Canvas Future

Indian IT service providers need not mimic the global IT service providers as it is, since it would negate some of the inherent advantages of Indian players(for e.g. pricing advantage). I would like the capability in domain experience, relationship management maturity, project management maturity and service offerings to be drastically improved to match or exceed the global peers. However, I recommend only marginal improvements in other areas like employee diversity, employee longevity and cultural compatibility as these are non-compelling factors in the overall decision making. One area that I would like to emphasize is the deal structuring where Indian IT providers need to be more open to try new pricing models including utility pricing models(pay per use, transaction volume, user count, resource used etc) and outcome based pricing models(like SLA based pricing).

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