IT business slowdown in India due to economic turbulence in US/UK is not a new issue. We faced similar troubles, couple of times before and managed to survive. But this time this has not just affected IT but made other industries too, vulnerable

Unfortunately we have not learned anything from our past mistakes. Retrenching (or the latest buzz, out placing) employees or the closure of operations is the last resort but would definitely spoil the corporate image. Still we are not addressing the root cause of this problem or in a better way, not searching for a lasting solution. We are aware of the fact that why we are getting huge IT support/development projects from developed countries. Our IT professionals may argue that we got super brains to design complex architectures or write millions of lines of code. Even though competency is a plus point, the management decision to outsource would be their intention to reduce cost of operation and to add more value to the core processes.

Many IT firms had offered 100-200% hike in compensation packages just to woo skilled people from their competitors. The huge salary and perks offered and hundreds of cold calls made IT folks to go for job hopping(don’t get shocked...there are people who worked for more than 3 firms a year,thanks to mushrooming recruitment firms). Anybody will agree that we can't find this kind of indiscipline and opportunism in any other industry. For sure win in talent war, companies are forced to maintain 20 to 30% people as backup(bench folks) and their prime responsibility would be to wait for projects,swipe and collect salary. Now the reverse is happening...if you compare the number of Job Advertisements of IT firms’ published in news papers for the last1 year with that of 2005 or 2006 or 2007, you'll feel the difference. Today,for most of the IT firms, attrition would be less than 10% or negligible.

Because of market pressure on pricing, companies are forced to reduce billing rates too. The industry is becoming more and more volatile and many companies are struggling to survive. I would say this is the high time to think about reducing operational costs in IT. With people as the most competitive advantage in this industry, streamlining compensation structure and realistically aligning it with the revenue streams is very important. Utilization of people should be increased and performance standards should be high. Now many companies are adopting zero tolerance on performance but it should not be mere justification for lay off.When you layoff 1000s of people with the reason '' poor performance'',definitely there will be questions on your quality of hiring, training and induction process [why you failed to produce poor performers?], how do you justify allocating the so called poor performers on various projects (with million dollar billing) etc. Also when resource team puts somebody on workbench for months because of non availability of projects, appraisal process itself will become a mockery. I would say operations team, resource team, sales team...all responsible for this and end of the day how can you blame only one particular person – employee for ‘no performance’.

Wealth destruction is happening across the globe and market correction is happening across business verticals and compensation structure.Globalization coupled with technology education and telecom/internet boom helped us to get lucrative business. But we should be bewaring of 'survival of fittest' phenomena. We can expect more competition from China in the coming years. Chinese are good in mathematics and when they manage to handle English for IT business, the result would not be unanticipated. Today we can go for a brand new mobile handset for Rs.1500 (nobody can deny the Chinese impact). An IT enterprise operating from a Chinese plug-n-play state of the art It park (with 50% less operational costs than India) with IT folks trained Britisher English teachers would have the potential to wipe away many of our dreams built up on unrealistic expectations [Chinese guy may not ask 100% hike every year, may not change 3 companies a year, may not dream for a premium duplex apartment at the age of 25, may not dream for a luxury sedan at the age of 21].If we fail to reduce operational costs, either our investors will shut the shops in India and migrate to China or some other location with cost advantage. What do we do...shall we show the same sort of frustration of people those who've lost jobs in US/UK when their jobs got outsourced or do we force our government to show ' protectionism'.

So in the coming days we may need to focus more in to Internal IT. There is big scope for process automation, e-commerce, e-governance,IT Services, systems for government and public sector establishments etc. Why don't we explore it? Also we should discourage people those who are coming to IT just to make money whether it is employees or investors. We need energetic people in this industry, those who can innovate and create world class products and services.

I would say recession is not the end of the world. We need to explore ways to survive but can't expect the comforts of old days at the cost of customer. We may need to put more efforts, sell the product with 10%discount and adjust that loss in sales incentive, stay one hour extra to finish some job before schedule, call a customer and show patience to learn their issues, send one extra follow up mail to client to ensure that the problem is resolved etc.


I strongly believe that we’ll succeed and retain our dominance in IT. What doyou think? What else we can do to support IT Industry and thereby our economy