Monday, October 23, 2006

Indian IT industry's (forthcoming) woes

Vinnie has a great post up on India's inflexion point. To summarize, he brings out three trends in Indian IT services environment which might hamper their continued growth:

1. Labor Shortages
2. Failure to develop significant competence in the business/program management domain, as opposed to technical domain
3. Shying away from new investments (Vinnie says Capex, but I believe that except for human resources, more an operational cost anyways, there is no significant investment in any key area)

As an aside, an intersting conversation is going on at Infosys Blog on talent shortages.

IMHO: I have written about this before here, here and here. I would also include:

1. Lack of focus: All Indian IT vendors want to be everything to everybody, consequently lacking the depth to tackle specific challenges

2. Underutilization of resources: Efficiency and productivity are frowned upon as I have written here.

3. Short term thinking: Quarter numbers are the most important items on every agenda, punishment from the market deeply feared. This manifests as a lack of forward, longer term thinking and hence obstructs development of competencies to face future challenges.

4. Walking the Talk: The use of IT inside the industry is abysmal. HR systems, and to some extent Financial systems are used, but in silos. CRM technology, Web 2.0 technologies, and other newer technologies are severely underutilized. These are the same technologies that we sell.

All in all, while there is a lot of buzz about the industry, the shortcomings pointed out above dampen the long term prospects. Playing Safe seems to be the mantra. As Seth would say: Playing Safe is Risky!!!

PS: Just shifted to the new Beta Blogger. So some of the Category Links might not work correctly. Do drop me a note if you come upon any such links.

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