10 Rules of upcoming slowdown on IT companies in India


So far, Indian IT companies have not only managed the recession but also to outgrown them. However, the prolonged effects of recession would need much more than what has been done so far. Some of the rules which will govern the next two years in IT industry may not be just the same which had been in the past recession.

Rule #1 Overseas companies are slowly realizing that there is much more than the large IT vendors in India. There are smaller players who can provide the same service at far better rates and cost. This will distribute the work to smaller vendors from the larger ones.

Rule #2 Captive companies in India had been hot in the area of BPO and KPO. However rising cost and need to reduce the cost of high end work, companies would look out for setting their own captive companies in India. This will give a boost to creation of companies which will focus on higher value added work instead of just BPO work which were the key work areas for Captives so far.

“ Trust building will be the key for sustained business, Onshore work will reduce considerably “

Rule #3 IT boom resulted in a lot of manpower entering IT. In many cases the quality of such resources are nowhere near the expected standards. However such candidates ended up getting jobs just because there was no one else. These next two years would have a lot of shakeup which will effect mostly such low skilled resources who ended up getting more salary than they deserved.

Rule #4 This is the time when Indian IT industry will have to have more hands on senior members. Scope of managers alone will reduce as clients will demand each and every resource to add value. Companies will be forced to get flatter and pressure will be higher on senior managers to prove their worth again.

Rule #5 Trust building will be the key for sustained business. All IT companies who had been exploiting customers earlier just because there was easy money may have to face the tune now.

Rule #6 Onshore work will reduce considerably. Even if customers are willing to pay, US government may not like more IT professionals to travel. This will affect the profit margins and also test the abilities of vendors to manage with a lower onsite ratios.

Rule #7 Talented people and value for money companies will be in higher demand. There will be higher demand for Indian senior IT mover and shakers who can take the team through this change smoothly.

Rule #8 Body shoppers will be edged out by companies who add value. Indian IT companies will have to work hard to change this image and prove that they can make a difference.

Rule #9 IT companies will have to forget the old dollar rates. They will have to work on lower rates else have to prove their worth. Cost will be the key to getting new business and this will be challenged every time it is reduced by others in fray.

Rule #10 Fancy salaries and high increments will be more sensible. For those who are already in high salaries and not proving their worth, have to really worry about their jobs. Salaries will be paid based on the worth the person can demonstrate and not the demand based on the last salary drawn.

Have something to add? Share it in the comments.

Picture Credits : readynutrition.com,For representational purposes only

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by IndiasGreatest.com ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

You may also like...

2 Responses

  1. Ajay Patil says:

    Agree.Challenging times ahead .

  2. Joyce says:

    Cheers pal. I do appreciate the writnig.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.