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.
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