The BFSI Impact on Indian IT

Hi All,

Well just like Nouriel Roubini I have been posting since 2007 about the impending disaster that the IT Industry in general and specifically in India s headed for. Just see my blogs on 2007 which talk about how NASSCOM is projecting 10 Million Jobs in 2010 whereas the Industry and Technology are going in a direction so as to reduce the total number of IT Jobs.



Here are a few facts:



1) BFSI Contributes to 1/3rd of typical IT Revenue of Top Indian IT Companies. These companies are by far the largest spenders on Technology as the requirements from Reporting, Customer Service, Compliance and Security is highest in this segment. This industry has complex and multiple products to offer to customers. Apart from these technology, research etc.are other industries which spend huge amounts on IT.



2) BFSI segment has seen bankruptcies and mergers some of the big names have just disappeared. This has led to consolidation in IT Infrastructure and Applications.



3) Technology Innovations have led to requirement of fewer resources to deliver.



4) The rise of open source has led to small application development just vanishing, today you have out of the box portals and templates like joomla, phpnuke, drupal so on and so forth.



5) The Onsite Rates of consultants in US has crashed to approx. 50 USD an hour in some cases. India's blended rates (Onshore /offshore mix) has become costlier.



What can we do to counter this effect as an Individual:



1) Never Stop Learning, Cross Skill yourself and be ready to move to better, newer and niche technologies.



2) Hard work always pays, so now the time for those parties and dancing classes is over, you want to have a job, slog on weekends to learn and retrain.



3) As organizations Indian IT companies need to look beyond people supply they need to create PRODUCTS and INNOVATIONS and move away form hourly billing to Fixed Price.



4) Exhorbitant Salaries: Its time to say goodbye to those white elephants with fancy degrees an designations


The Times are Changing and they are changing now.

China Salary Survey for IT Professionals

Hmm, one of my friends said that China's salaries are not as low as being made out. Well I had to dig into google.com and this is what came out. Alarming :)

I wont drill down into details, just look out for yourself..

http://www.payscale.com/research/CN/Job=Software_Engineer_%2F_Developer_%2F_Programmer/Salary

SAP CEO on the escalating Costs in India

SAP CEO on the escalating Costs in India.

Escalating personnel costs in India - one of the world's largest markets for offshore software development services - have prompted business software vendor SAP to begin looking
elsewhere for lower-cost, skilled programmers.

Check out this article at networkworld
http://www.networkworld.com/news/2006/013006-sap-ceo.html?fsrc=rss-offshoring

Hi,
A few interesting stats about IT.

1) Turnover / Market Size

- Total Turnover of All IT Companies in India (Including MNCs, BPO, ITES, KPO) - 40 Billion USD
- Toatal Market Size of All IT Services in US (550 Billion USD)

Compare this with??

- Total Turnover of Reliance Industries 27 BILLION USD

2) Market Cap

- Market Cap of all Indian IT Companies Close to 60 Billion USD

Compare this with??

- Market Cap of Reliance Industries 60 BILLION USD (RIL alone not including Reliance Communications, Reliance Petroleum, Reliance Capital, Reliance Energy, RNRL etc. etc.)
So Reliance = All IT Companies in India put together.

3) Number of Emplyees

-IT Industry 1.6 Million

Compare this with??

Reliance = 12000 Employees, this year 24000 due to addition of Reliance Retail.

So now you know why Reliance didn't enter the IT Field.

How Many Jobs are there in IT (Actual Numbers)

Being in the IT Outsourcing industry, have we ever given it a thought on how many jobs are there in the market to get outsourced?

I think that this is an important number, for us in the Outsourcing industry atleast.

Here are a few statistics and yes I was startled when I actually tried to find the answer to the question above.

Current Data

- 1.6 Million Jobs in IT and ITES Segment. Out of which a Million in IT.

2010 Data :)

Nasscom Says that there will be 10 Million Jobs by 2009
http://timesofindia.indiatimes.com/articleshow/1195266.cms

Now where does that 10 Million figure come from? To be able to be 10 Million we have to grow at more than 100% in terms of people every year.

The Number of Jobs in USA today for IT Professionals?

How Many?

10 Million?
100 Million?

Well what's your guess. Just check out the actual figures of US Job data for IT Professionals.
http://www.bls.gov/oes/current/oes150000.htm

Add to it the following:
1) Tool Productivity is Increasing automation of Routine Jobs
2) Much higher use of Out of Box Tools / Packages
3) Higher People Productivity / Process Improvement

So, How many jobs will actually be there in 2009??

IT Industry in India

Hi Everyone,

So the IT Industry in India and its supremacy are reaching a plateau?? Its growing fast, how long, how fast, till when, these are a few of the questions that trouble the mind of an IT worker today.

I would like to share my views with you on this phenomenon so I will break this topic into some subtopics.

The first one is What started it all, what we did right to be here.

There are many things that went for India for it to become what it is today, am enlisting some of them here:

1) English speaking workforce

2) Close ties with the west, many Indians working in US and Europe. The immigration population in these countries is highly successful often in leading and decision making posts, so when the time came to outsource they looked at India. More or less following the trend when one brother who owns a retail store in US looks to his brother in India to supply him cheap goods to sell.

3) Availability of cheap labour (qualified cheap labour) well the IT industry just 5 Years back was the same as any other industry and people earned a pittance working for days and nights together. The skill level was good enough for low level programming, testing and web site jobs also for Y2K resolution.

4) Onsite lure: Most indian companies just started as Manpower consultants, sending people to US to work for US MNCs but this had a big impact. The people who worked with these MNCs brought back crucial process, product, managerial and technical knowledge to enable the Indian Companies to do business out of offshore. So the Manpower consulting companies had a very big hand in taking India in IT to where it is today.

5) Lack of opportunities: IT provided the much needed opportunity to youngster's here to get a job and a decent standard of living (at a time when getting a job itself was difficult).

6) Indian Currency (Re): The rupee was favourably placed for us to be able to export and get benefits of labour arbitrage.

7) Government Incentives: IT was one field where you had STPI benefits, Income Tax Exemption and this played a key role in making india an IT Destination.

8) Downturn in US Economy: The US Economy downturn actual helped India as companies in US looked at cost cutting and started offshoring. Loads of MNCs set up their shops in India to save costs and thus maintain their margins.


Hmm, so these are some of the reasons that India emerged as an IT power. Now many of these factors have gone against us and there are new threats emerging fast. Will discuss this in the following post What Ails Indian IT Industry and then would follow it up with what we can do to save ourselves from getting Shanghaied.

Till then happy coding.

IT Industry: What Salary Are You worth!!!

People are getting crazy salaries these days. Salaries they didn't even imagine that they can get or deserve.



So this got me thinking, actually spent quite a few nights thinking about the state of affairs these days and came out with a discovery of my own:



There are certain effects which can result in salary appreciation to unlimited levels. Let's look at some of those



1) The 99 Effect: Well the 99 Effect means that a company needs 100 resources and is 1 short so they would pay you a higher salary than you deserve bcuz. they need to complete that number and in a limited time, they wouldnt mind paying you more cuz. its 1 in 100



2) The Startup Effect: A company who is just venturing into a new business line would pay the guy who knows this business and is willing to join them for starting something from scratch a good deal of money, cuz. they are ready to invest and experiment and they have to find someone who is smart enough and yet willing to take the risk of a startup project.



3) Palika Bazaar Effect: Well it means that the company comes to a country to do business but does not know the local environment and rates so they end up paying huge money in the beginning simply because they have no idea and are new to this market.



So it means you can even get 5 times of what you deserve because of the above factors.



Keep thinking..........