Noose is tightening on Indian IT companies

indian it companies alok kumar
Indian IT companies traditionally have been depending on US and European countries to grow and generate jobs.
Last three years of recessionary effects have brought forward the real need for these countries to have a relook in their operations and reduce cost at all levels. Needless to say, past and prolonged affluence has resulted in these countries taking things for granted.

“ Inflation is adding to their problems further but attempt to change is very slow. “

High standards of living, easy jobs, good salaries and a lot of energy consumption became order of the day. Last few years have put realities in front of these countries compelling them to rethink their strategies to reduce cost and be more effective.
In past, history reveals that these countries have enough will power to change whenever they have faced any adversary. I am sure they will certainly change and that throws many possibilities in few years to come. One of the possibilities is that of bringing back IT jobs. BPO jobs are slowly moving back to US and Europe apart from Philippines.
The main reason cited so far has been the quality of work added with ever increasing cost. I was surprised to find that few companies in US are getting very competitive cost as compared to Indian IT majors who charge a bomb for their services for BPO operations. Although industry leaders in India are pushing aside any concern, it is true that the cycle would complete with jobs going back to their countries of origin primarily because of the quality and eventually having no cost advantage.
Similar problem can be seen with IT service providers who are no more as cost effective as they were initially. Inflation is adding to their problems further but attempt to change is very slow. Indian companies still look at profits of 30% as their benchmark and the account managers try to achieve their targets by hook or crook.
Infosys has been losing customer trust in market mainly because of such attitude of their staff and others would also not be far with things becoming tight in near future. The only way they can retain the advantage is by reworking the cost to a far lower level and working transparently with customers to give the values they really need from IT providers.

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Picture Credits : capgemini,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 ¬ 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.

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1 Response

  1. Saurabh says:

    Acquisitions can help maintain the current geographical distribution of jobs for Indian companies like Infosys and they can still be billing profit of premium above the operating cost.

    Its high time companies like Infosys focuses on Indian Market and check its foot print.

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