The appreciating rupee and anticipated US recession has claimed its first victim. IT major IBM recently offloaded about 700 trainee programmers to offset the dollar . It came close on the heels of Indian giant TCS reducing the variable component of salaries by 1.5%. Does this signal the end of the era of India's IT dominance ?
Probably not. However, the explosion of ITeS is likely to be revised to a mere surge. Fools die and only the Strong survive, said Puzo. This will be tested in the current market. Startups and niche companies will face the brunt of the shockwaves. Organizations which have spent effort and time to increase functional and technical resources, expand into new technologies and avoid a bloated organizational structure will survive. In short, free lunch has ended - the guests who saved and invested can pay for the meal, the moochers will be out on the street.
This applies not just to organizations, but also to individuals. Performance will now be scrutinized under a microscope. The other professionals will heave a sigh of relief as IT salaries are right-sized to more manageable proportions. While this may hurt in the short run, it will ensure the long-term survival of the sector and help maintain its cost advantage.
But it is time that Indian companies gradually grow out of their cost-center mentality. Indian IT professionals have given ample evidence of talent and motivation while working as a backend for American innovation. Why do Indian companies not recognize the value of product innovation and use the same cost-pressure tactics in the product development domain ? As realization dawns, Indian will be suitably poised to take advantage of other emerging cost centers while at the same time retaining its strategic position.
We are in for some exciting times ahead. Just hope that the knee-jerk reactions can be avoided and cold reason applied.
