What does an IT consultant do on a weekend? Discusses global economics with his friends and tries..neah gives consultant answers to 88.3% of questions of the world (you wont understand the arithmetic behind the percentage...it's too complex).
That's what I did to the best of my ability and knowledge. But my friend ( he has an MBA from the real world and no B-school crap) posed a question "How long will the tech. boom last?" and I heard it as "How long will guys like you keep receiving hyped up salaries?". That was a dream shattering question. I saw a Royal Enfield Bullet (the bike of my dreams) fading into the distance. Would I still be affording Rs. 1 Lakh for a bike, say three years down the line? Would I be flaunting proportionate income X years (which I hope is multiples of 10) down the line?
Well, my friend has a fair idea of M&As happening across the globe in BPO, KPO and ITES sectors. He also knows of emerging countries who can prove to be competitive threat to India in these sectors and he also has some number (suffixed with billion and trillion) to back up his claims. Now, being a consultant gives me the liberty to talk about stuff that I don't know. So I did just that!
The argument goes that other countries like Philippines, Indonesia, 'East European' Countries and other countries whose names start with Q, X, T etc. and whose total population (including children) is slightly more than North Goa, hold a competitive advantage over India. They are culturally more aligned to the west, some of them know French, or speak English in the right accent. And the biggest thing is, they are ready to work at cheaper rates. The differentiators being narrow and the cost advantage being huge, and the cost of switching being minimal, Indians will lose their business and Mr. Laukik Desai will pack his bags for home and g(r)o(w) bananas there.
I say "hell NO"! I can work cheaper. So can most of us. Unless, inflation makes it non-viable to earn any lesser. And the differentiators are far bigger that the ones above. After learning English, the competitors gotta outdo us in technical education. Then they gotta outdo us in experience. Indian Cos. have gained experience in various verticals over the past couple of decades. So they have quite a distance to cover. Till then consultants will find something else that the competitors can't beat.
But the question sure made me paranoid till i slept. But I am glad some one wrote a book "Only the paranoids survive!". So tension illa !!!
What says the yous???
That's what I did to the best of my ability and knowledge. But my friend ( he has an MBA from the real world and no B-school crap) posed a question "How long will the tech. boom last?" and I heard it as "How long will guys like you keep receiving hyped up salaries?". That was a dream shattering question. I saw a Royal Enfield Bullet (the bike of my dreams) fading into the distance. Would I still be affording Rs. 1 Lakh for a bike, say three years down the line? Would I be flaunting proportionate income X years (which I hope is multiples of 10) down the line?
Well, my friend has a fair idea of M&As happening across the globe in BPO, KPO and ITES sectors. He also knows of emerging countries who can prove to be competitive threat to India in these sectors and he also has some number (suffixed with billion and trillion) to back up his claims. Now, being a consultant gives me the liberty to talk about stuff that I don't know. So I did just that!
The argument goes that other countries like Philippines, Indonesia, 'East European' Countries and other countries whose names start with Q, X, T etc. and whose total population (including children) is slightly more than North Goa, hold a competitive advantage over India. They are culturally more aligned to the west, some of them know French, or speak English in the right accent. And the biggest thing is, they are ready to work at cheaper rates. The differentiators being narrow and the cost advantage being huge, and the cost of switching being minimal, Indians will lose their business and Mr. Laukik Desai will pack his bags for home and g(r)o(w) bananas there.
I say "hell NO"! I can work cheaper. So can most of us. Unless, inflation makes it non-viable to earn any lesser. And the differentiators are far bigger that the ones above. After learning English, the competitors gotta outdo us in technical education. Then they gotta outdo us in experience. Indian Cos. have gained experience in various verticals over the past couple of decades. So they have quite a distance to cover. Till then consultants will find something else that the competitors can't beat.
But the question sure made me paranoid till i slept. But I am glad some one wrote a book "Only the paranoids survive!". So tension illa !!!
What says the yous???
Comments
I beg to disagree with you and agree with your friend (atleast partly - although I am not so sure about the countries beginning with Q,X part :). And I opine not based on my (non-existent) experience - its based on what I have heard or read about from many credible and senior persons.
India is ceasing to be attractive, particularly so for outsourcing - remember that in the last "hike season" we zoomed past everyone in sight. With an average of close to 15% being added to our paychecks each year how long are we going to be sustainable for the MNC's? Brazil, Russia, Vietnam, Argentina are becoming more lucrative.
The only chance we have is to tilt the scales away from a cost-based advantage in favor of a quality-based advantage.
This is all the more relevant when u realize that most MNC's are extracting junk work from us anyways. We are hardly innovating, miniscule R&D is going on - and we are even working for like a fraction of our "western" counterpart's pay - So what if this pay affords us a comfortable living far beyond what wouldve been thought possible few yrs back? I'd rather we secure the future; and add some value to this world rather than survive on left-overs and crumbs.
Ok, that was a harsh way of putting it, but it more or less drives home the point (I hope so :). U know, I am beginning to feel this topic merits a much more detailed post of my own - so keep watching my blog ;-)
On the other hand there are a few threats. What is called the BRIC countries is where most of the population of the world does, or will reside. Brazil, Russia, India and China. Now you can do a comparison of all those countries, and while India has a headstart in IT/ITES, they might just catch up. Truth is though, nobody need be worried. Offshoring/ outsourcing is still showing an upward trend. The pie is increasing, and there is enough to go around. Like there is enough room for, say textiles, for both India and China. India still accounts for only about 3% of the worldwide IT market, and it is termed a superpower in IT. This is not a zero sum game, remember that, and sleep like a log with no worries, and hopefully no snores. Have fun, the bananas can wait. Get that Bullet before the oil runs out. :)
Anurag
Paranoids not only survive...but thrive!
On a serious note, I think we can compete with any other country both in terms of cost and quality (more on quality since we have been around for some time). IMHO, whatever experts say, whoeveris getting paid more n more every year is not spending it on his bread n butter any more. It is going into deluxe apartments and Nikes n Gucchis. So if worst comes to worst people will chose to keep their jobs even with a pay cut. SOunds weired but will turn out true if there are no alternatives. We can do this so long as the hike in fuel prices does not overtake the hike in our salaries. Then all prices will go up and we will have to work at higher salaries for our bread and butter.
@Anurag:
I agree with you that the competition is not from Europe or somewhere - its mostly from our counterparts in BRIC - and a few others (I mentioned Vietnam and Argentina as examples).
I have heard accounts of how projects (particularly services ones) are being lost by Indian "teams" to teams in China because they bid lower and quote lower "labor" rates - and mind you: this is within the same company!!! However, the rocketing economies in both India and China, and the resulting high pay increases, will eventually weigh against them. Thats where Brazil, Russia et al come in.
And well, I had not thought from the "Scale, experience, and a young employable work force" angle; but now that you have brought it up; I should say I absolutely agree on that one. Its one of the few hopes we have yet!
@Musafir:
I'm not so sure of how we will score on the quality front. Of course, the competition in this case comes not from the other "emerging" forces, but from the established ones themselves. We can hardly compete with US, Germany - even Israel when it comes to real R&D work (read "product development").
The root of the problem lies in that we have been so carried away as an outsourcing destination that we have barely even given a thought to go one step beyond that and establish ourselves as a manufacturing (in the IT case this translates to R&D, product development) hub. I would even say that this was done on purpose - the US-based MNC's didn't want us to get a whiff of the real thing! They only wanted to use us for cheap labour.
This is the way I see it: If I were an outsourcer; I would start looking at countries other than India and China mainly because of the cost and ever-increasing salaries. So it is up to us now to lock horns with the mighty forces themselves by providing quality. And oh! I wouldnt expect actual quality work to be outsourced here to India. Oh No! We have to create opportunities to do real quality work on our own - in-house.
Rounding off, I remember reading one article (by a senior Indian guy in one of the big IT MNC's - dont quite remember which one!) who gave a timeline - 8-10 yrs for us to put our act together. Thats when he believes we have to switch to the quality-based advantage or lose it all!
Migration & Immigration helps survive economy ... this has happened in Eurpoe & America to starts with....
India itself is so big that migration between the states helps this phenomenon,,,
I wonder when will we have everything at a STABLE POSITION...
this theory is a bit scary and i dont know the possibility of this happening while iam alive...
Let me tell you my STABLE POSITION or EQUILIBRIUM ECONOMY means,,,
that all prices are same everywhere in the world...
PETROL, GAS, CLOTHING.... when will we have a stage where everything cost the same amount of money no matter where you go in the world...
Will this happen....????
please give me your expert opinion Mr.Dessai.....
Kalpesh Sagalni