Do IT leaders need glasses?

The authors, Was Rahman and Priya Kurien, who have strong credentials in the IT services industry and run a business consultancy, have produced a book with an unusual theme. At a time when optimism in the Indian offshoring industry is sky high, they are "bemused" that the industry and its stakeholders are "uniquely myopic" beyond a three-year perspective.

They find IT leaders are "generally upbeat and confident" and IT employees believe "the good times will continue". They continue that "the only significant assumption we could pick up is that the scale based business model will be necessary for future success, and moving up the value chain is a necessary part of exploiting that model".

Both IT services industry leaders and employees seem too busy relishing their success but things could change quite fast. Hence this "wake-up call". The authors believe that the industry can "create and share views... on where the industry could or should be in the coming years". None of this discussion may be happening because it can increase "fear and insecurity levels" but "ironically, increased knowledge of how the future could turn out is a way of reducing the same fear".

Why are the authors so worried? For one thing, the future is getting to the present faster than we may be aware. The brave new world of Star Trek is here. "Rapidly increasing hardware power (Moore's law), access to almost limitless information (the internet) people-like communication with computers (mainstream speech recognition) and built-in 'judgment' (personalisation)" have all enabled the world of Star Trek.

Underlying this is an ongoing change in the people and technology scenarios. The book foresees that people across the world will reclaim some of their personal lives, and firms have to give employees more balanced lives, whereas the offshore vendors have thrived on the Indian techies' willingness to live out of suitcases near the client's site.

Simultaneously, on the technology front, with code writing and testing getting increasingly automated, the balance is shifting back in favour of people from machines. What businesses really need is advice on process re-engineering. So in a decade, will we need that many software people as we think now or will they have the right skills? Everybody agrees that there is a need to go up the value chain but are you pursuing it to make more money or as a technological imperative?

Industry leaders acknowledge that fundamental changes may hit the industry at some point but they are confident, on the basis of their track record, of successfully coping with them. Right now they appear too busy chasing quarterly results. What is even worse is that CEOs have less and less time to prove themselves and studies indicate that this is down to 18 months. So how can they have a longer perspective?

In painting alternative scenarios for the future the authors list some of the developments that can bring about a game change. One is increased automation disrupting the current programmer-intensive application maintenance and development model. Another is the increasing adoption of software as a service and on demand computing making up the pay-as-you-go model.

But the point is, industry leaders are already actively grappling with these scenarios. In the last month two industry leaders revealed the flowing to this writer. Phaneesh Murthy spoke of a model called "people process technology on demand". It is made up of software as a service, shared services, business service on demand, including the process element. Significantly, he does not lay much store by consulting, which he sees as a way of improving the top line that does not break linearity (people multiplied by wage rate) or being wedded to scale.

Nandan Nilekani, in his post-CEO role, will look at how to bring in new business models. One is large transformational deals, where you have to bring in fundamental changes for customers. Another is platform-based solutions, where you don't sell intellectual property but sell a service, or sell per transaction, or sell some kind of content. Both are looking at decoupling business from scale in terms of number of people.

The book is not solely based on the Indian IT services industry. It seeks to provide a fresh perspective for understanding the global industry by comparing it with other industries, traces its evolution through six decades, profiles industry leaders like IBM, EDS and Accenture and challengers like TCS, Infosys and Wipro. And finally, what the future can hold for the industry. A discussion may not be obvious (blame the media for that) but some industry leaders are thinking the right thoughts.

subir.roy@bsmail.com  

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Blind Men & the elephant
Demystifying the global IT services Industry

Was Rahman and Priya Kurien
SAGE Publications
Price: Rs 395; pages: 317