Indian IT sector has to move up the value chain

December 10, 2011: With India losing its first position in the Business Process Outsourcing sector to Philippines, the Information Technology sector in India is preparing to reengineer itself. National Association of Software and Service Companies (NASSCOM) is leading the re-engineering drive with highlight on innovation and improved employee output.

The intense competition from aggressive players from across the world has forced the Indian IT industry to take a re look at its attitude towards IT business. The new approach will include provision for retraining of employees to maximize output with focus on value added products and services.

The Business Process Association of the Philippines has recently announced that its call center business has grown at a rate of 20 per cent during 2010, to surpass India.

According to V.K. Mathews, chairman, IBS group, and executive council member of NASSCOM, Indian IT companies cannot continue to hire employees in par with growth. The increase in wage and inflation has added to the cost of IT employment, and now companies need to enhance the value and revenue output per employee. He added that it is time for the IT sector to move ahead in the value chain.

Focusing on the need to offer better services and products, he said it is necessary to understand the customer requirements and come up with a business innovation approach. The Indian IT sector has traveled a long way and has undergone evolution from shopping to projects to ODC’s. In the current scenario, the IT companies do what they are asked to do and nothing more is done to enhance value to delight the customers. This practice should change and companies should come up with practices that improves value to the customers and attracts them to the Indian IT industry.

The process of value addition would help companies to prevent the increase of headcount with respect to business growth. In this context recruitment is expected to continue as long as there is need for recruitment, but the industry has to grow in terms of adding value rather than adding heads. In order to maintain the momentum of growth, the industry should be able to utilize the man power in an effective manner. The role of innovation is important in the IT industry and to bring in innovation, entrepreneurship should be encouraged.

The IT service model that we follow is forced to death. Employees are no longer excited about what they do. They are bored with doing the same thing everyday. One way to create excitement is to promote innovation and entrepreneurship.

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