Celebrating 10 years of CIO Independence
On 15th August, India celebrates 60 years of independence. India gained independence in 1947 as a unified nation after an intensive struggle for independence. As you probably know, India is the second-most populous country in the world with an estimated 1.19 billion people in 2006.
The Indian software industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 39.6 billion in 2006-07. No other industry in India has notched up similar growth or had such a progressive effect on India’s economy.
Driving the industry in the future to a $60 Billion in FY09-10 target will be the following factors:
· an addressable global market opportunity of around US$ 300 billion
· growth in existing businesses and new services lines
· India’s status of “most preferred destination for global IT sourcing”
· The country’s talent pool, top-quality management and security and quality focus
So why is this important for Global CIOs. The last 10 years in particular have seen India emerge as the favorite destination (65% share of the global offshoring market) for CIOs worldwide. CIOs who were stuck with lack of scale, talent-crunch, flexibility and high costs suddenly found an avenue for success. Most of them actually succeeded in leveraging Indian talent successfully. Most of them found freedom and independence.
Moreover, as a result, India gave birth to several successful global multinationals including Infosys ofcourse, that went on to establish a strong presence in multiple countries and established themselves as global leaders. Large Global IT Services giants in the last 10 years have suddenly discovered India as a hub for their operations as well.
While the future outlook for the Indian services industry appears bright, the sector will need to grapple with certain short- to medium-term challenges such as the appreciating rupee, paucity of “suitable, employable,” talent, infrastructure development and sustenance of a positive policy/regulatory environment. These require timely, consistent and continued effort from all stakeholders including the industry, government, and academia.
As far as the next agenda for the same CIOs: After successfully using the “value for money” wage arbitrage advantage and then making the transition from on site to off shore delivery through the perfection of high quality processes and the ability to migrate technology development and business process management to Indian centres, the third wave of success for these CIOs may well come from innovation using the global delivery model again leveraging India and other emerging economies successfully.
Cheers to 60 years of India's independence and 10 years of Global CIO's independence. Cheers to the Global Delivery Model.
Comments
I might add that as the IT export market grows to an estimated $300B, a vast majority of global clients will look to strategic advisory capability from their offshore/outsource partners (such as Infosys).
Simple reason for this is Clients are no longer looking for point IT solutions , they want vendors to provide business solutions (which may have IT building blocks).
Posted by: Saibal Sen | August 15, 2007 03:24 AM
Last 10 years has been great for India and its IT service industry but it is time to look forward from here. Indian tech companies need to "think big" apart from "thinking flat". Big players like IBM are making inroads into Indian market, so Indian companies need to leverage their advantage and keep a few steps ahead by constantly innovating. This may cost companies initially but big investments are needed for future growth of the industry.
Although, this doesn't mean having regulations on foreign companies because competition is indeed good for the industry as it opens new ways to collaborate.
Cheers to India's continous success in future years to come.
Posted by: Ricky | August 26, 2007 07:33 PM
India's success was also due to the turning point event of June 1991, when our foreign exchange reserves were exhausted and gold had to be airlifted to London. It was then that the dismantling of the license-permit-quota raj started. And the citizens of India got the opportunity for passionate working. It is passion that produces great results. But passion requires the right kind of environment. Or else passion can get classified as over-enthusiasm and passionate individuals would normally get suffocated. With the free market globalized economy one needs more of passionate people to produce results. So India's growth will go on, thanks to the free market led environment that will encourage passion and passionate people of India.
Posted by: Sunil S Chiplunkar | September 3, 2007 05:17 AM
Hi Sandeep,
There are certain dynamics which are helpful, in managing and driving the growth engines when you are the only and sincere competitor in the market. This happened to India in the last 10 years in IT, and believe me, we have earned it and taken this very intelligently and confidently to the next level, where competence and challenges have grown further and beyond for a new player to contest with India, but belief is something that only gets shattered till the time you haven't known your next competitor or challenger.
For this simple fact and how this gets driven inside the industry is a million dollar question; but its definitely gets done. Innovation, Information and real complaince are the building blocks of the next generation IT companies. For INDIA to rise and perform to this occasion requires it to benchmark and innovate what it has learnt and put them for use to the global IT market - just like what Toyota did with JIT.
For me it would be very crucial and important to see how the Indian IT strategies and governance are implemented and improved upon to benefit the global IT frameworks; and then truly India would become the driver of IT & Internet Revolution in the next decade. The spirit of Indian Enterpreneurship and Management requires focus and intellect to make the globe its playground.
Posted by: Gaurav Sharma | September 3, 2007 06:03 AM
I have noticed China exports a lot of inexpencive merchandise to the US. I don't know about India. But what I have seen in the past. Japan did the same after the second world war. I was just a kid and when I would see on the back of an item made in japan I would laugh. I think it's because they made cheap products. inferior to the US. To me China and India are making the same mistake. Japan learned over time it was more profitable to make a good product, and a high dollar product, to be competitive and be profitable. Now they rank with the best or are the best in automobiles tv's audio and vidio equipment, large appliances, etc. Why make the same mistake Japan made, it took them a long time to figure out quality sells over cheap workmanship that's why they lead in so many differant areas that we can't compete, or we can but don't want to invest in R+d To be copetitive. In the auto industry ford comes out with a pinto and gm comes out with a vega to compete with toyota is that a joke. It;s not the blue collar workers fault it's management.
Posted by: mike melley USA | October 4, 2007 06:05 AM