“Great Indian IT Product Story” – what is stopping us?

I am sure my friends from the IT community will be able to relate to this. I have read a number of articles and have heard many people giving their insights on this topic. Some will say ecosystem matters a lot and start blaming the government and the state, some will allege “skills are missing”(some will state India produces less PhDs compared to other countries) , and some will say “they need proper funding”.

Let me not get into all these for the time being but, let all of us for sometime start thinking from a different angle.

To start with I want to make a simple statement “You don’t need to invent, rather innovate”

It is completely wrong to say India do not have products (IT products are not included here). Let me give you some examples of products, which are built on Indian innovations and are now slowly moving into world markets (developed countries) – a) Ford, Toyota want to sell their India designed low cost cars globally b) Maggi noodles – a low cost and high nutrient product of Nestle which have been primarily developed for India is on its way to Australia and New Zealand c) General Electric’s low cost versions of ECG and ultrasound machines primarily for Indian markets are now moving to world markets d) Pepsi’s – Kurkure and Nimbooz e)  McDonald’s Aloo Tikki Burger. The list can go on. All these products are “innovated –in-India” and then slowly are moving towards the global markets.

So how such innovations (non-IT) are possible? Why cannot the same happen for our own IT Industry?

If you analyse carefully – traditionally products were designed in developed markets and adapted by the rest of the world. Technology came first followed by price. But what is happening now and will continue to happen is called “reverse innovation” that is low-cost but high value products being developed primarily for emerging markets (like India), which will eventually graduate to the developing world. Now technology is tailor-made keeping cost in mind.

Now back to the IT Industry. Indian IT companies (start-ups and SMEs) are unable to build a product on Indian innovation and then scale up globally. But MNCs or foreign companies have been building products (example many MS products are build from India development centre, many small start-ups in India are working on product development, which have been outsourced to India) How is it is happening? In my opinion “Cost” is a major factor. I totally do not agree with the fact that “we do not have ideas”, we do have ideas but the “cost of execution” and “scaling it up” is a hindrance to this.

By the year 2020, total IT addressable market (NASSCOM-McKinsey Report- Prospective 2020) from new geographies – BRIC region (Brasil, Russia, India, China) will be around USD 380-420 billion ( For India – USD 90-100 billion). That means we will see a lot of IT Innovations happening in Indian Markets. But the question is can our IT start-ups/SMEs do it? US IT Companies can achieve their growth, build products and reduce cost by outsourcing it to India but how can we (Indian IT start-ups/SMEs) innovate? – outsource (how? and to whom?) or focus on our frugal engineering skills (Jugaad)?

Because of these numerous questions I sometimes see a bad dream quite often – Re-birth of East India Company .

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What can you do? I am a B.Tech.!!

How many of you have heard of people (especially students) saying, “I am a B.Tech (or M.Tech)” when you have asked them what can you do? I have heard this “n” number of times especially in this industry (IT).

If you ask your cook “what can you do?”  He will say “I can cook food for you” and then he may get into his specialization – North Indian, South Indian etc.

If you ask a driver the same question “what can you do?”  He will reply, “I know driving” and then he will talk about his area of specialization – 3 wheeler, 4 wheeler, 6 wheeler etc.

If you ask a plumber the same question “what can you do?” He will reply I know to “fix the leaks” of the tap.

When I ask any candidate fresh out of college (sometimes even experienced IT Professionals) “what can you do?  He/she will reply “I AM A B.TECH.” But what can you do? The same answer “I AM A B.TECH.”

I am not making fun of anyone but trust me this is a serious problem.

When do we move from “qualification” to “skill set”? When will the time come when students, fresh out of college, will approach IT companies saying “I know programming in PHP, and I can build a particular solution for you in 72 hours”? When will the time come when students will start saying, “I want to work in a small medium company and learn a particular skill set”?

Some suggestions to the student community:

  1. Mention you skill set rather than qualification when someone asks you “what can you do?”
  2. Before visiting any company with your CV, write on a piece of paper 5 points – why that company should recruit you?
  3. Do not increase your “price” – remember you are just a new product without any brand value, just launched in the market. No one will buy you if your rate is high unless you have a particular skill set.

Continuous flow of “Low Cost Skilled Talent” is the NEED of the hour– Simple Case Analysis

A simple case analysis to find out the need for continuous flow of low cost skilled talent(human resource).

Let’s say there are 5 IT companies who are into web development. Each of these companies has 10 IT employees. Out of these 10 IT employees – 2 are designers and 8 are developers. Assume all of the 8 developers are working on open source technologies.  So that means total existing resource = 2*5 = 10 Designers and 8*5 = 40 Developers. Total = 50 resources. Now imagine cost of a designer is Rs 5k per month and for a developer it is Rs 8k per month. As the business requirement increases, resource crunch takes place in a particular organization. Due to lack of flow of fresh talents, the company tries to pull resources from other existing companies. So the same designer whose rate earlier was 5k per month, now is hired for 8k-10k. Hence the cost goes up.  So a project/work which the company was previously doing at X amount of money, now to do the same kind of work it costs 2X. This is because the resources hired are now costlier than before. But, the company at the same time also has to make profit.  The companies are unable to find fresh talents with required skill sets because they are not available. Hence, flow of fresh skilled low cost talent is required.

Lets look into another case, with the example as above stated company structure – 2 designers & 8 developers.  In most cases a single developer can handle a maximum of 2 client projects (if the scope of project is more, then minimum of 2 developers can handle a single project).

Development is not just coding, but it also includes documentation, client interaction and testing.  Hence a single developer has to devote almost 10-12 hours in a day to work on 2 client projects. Question is why the developer is working on 2 projects and why not 1?

The answer is very simple; the company does not have any other options.  Companies cannot hire fresh talents because they are not skilled as per the requirement and the companies are not able to hire from outside(other companies) because to hire the resources they have to be paid more and if the resource cost(hiring cost) goes up, the project cost will go up and ultimately the company will lose the  project/client.

And those developers who are working on 2 client projects, does not get time to do self study, their quality degenerates and productivity gets affected and all these ultimately affects the clients.  Hence continuous flow of fresh skilled low cost talent is required to stabilize the situation.

Remember the keywords: Continuous, Fresh, Skilled, Low-cost. You cannot ignore any. To achieve the exact match continuously is  really a challenge, which most of the SMEs are facing all over India.

Note: Companies here in the study denote SMEs with employee strength 1-20.

SocIeTy

I know the title looks odd but there is certainly an inner meaning to it. After few requests from my well wishers, I thought of sharing my views on the young “Indian IT Industry”.

The next immediate question in the mind will be why the title is written as “SocIeTy”.  To understand this you need to read through  this first post of my blog. Before I start, let me inform you that my views are based on the following:

  1. Daily interactions with industry (IT) people
  2. Spending some time with common people on the road
  3. Mixing with friends, relatives
  4. Reading books,newspapers and journals

If you see the meaning of society in Wikipedia it states: “A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations.” You will also get to read lot of other definitions of ‘Society’ by various world renowned sociologists, philosophers and leaders.  Even there are diverse type of societies, but, I am not digging much into the details. So let us accept that we are currently living in the age of “information society” and this society is slowly evolving into a “knowledge society” but I am not sure how much time will it take for this transition to complete.

Our IT Industry is young and vibrant with an average age of employees working in this sector is approximately 27 years. We have some brightest engineers and entrepreneurs working in this industry (currently 2.5 million).  Now let me pause for a moment and ask you these questions (which I have encountered many times) “Does the Indian IT Industry” really understand Society? Does this Industry know the problem of our society?  Can technology really address the issues of the society? When will the Indian IT companies build “some solutions” for the Indian society?  What is stopping them or who is holding them back?

And before you try to find out the answers or encounter similar kind of questions take a deep breath and ask yourself “are we attached more to technology and detached from society?” When was the last time you have spent some time with the people on the road, travelled in buses and auto rickshaws, gone to the nearby market to observe the behaviour of the consumers and sellers, spoken with normal people in their language and tried to find out their problems, took some time to explain your parents and grandparents about IT, motivated some young students to join the IT Industry?