Recession has made a lot of people start thinking. Thinking is one of the first few things one does if you need to innovate. Does that mean more innovation will come? Unfortunately it doesn’t seem with a study done in some large, medium and small IT companies in Bangalore. Large would be companies with more than 10,000 employees, medium would mean between 3,000 and 10,000 and small would mean 1000 to 3000 employees.
This study was based on interviews with some of the employees in the various IT companies in Bangalore. It seems that a pattern seems to emerge from most of the conversation. 1. Times are bad, recession in the US has hit us real bad, 2. There isn’t going to be promotion and no hike in pay packet for this year, 3. Company top brass are racking their heads to figure out how to overcome the bad business situation.
It is clear that 1 and 2 are consequences of a certain input conditions. We probed into point 3 as we felt we would get some meaningful insights. What then comes out is a strong focus on cost cutting. Leave very little meat, but make sure you don’t hit the bone is the mantra. So what are the top brass racking their head on- innovate on cost cutting. Workshops are held among senior management with the agenda- 1. Get rid of the paraphernalia. 2. Why are there so many managers? 3. Get rid of experienced people, anyways the kind of work we are doing now we don’t need them. 4. Maintain Senior (people with greater than 8 years experience) to junior ratio (people with less than 3 years experience), this is one is the favorite. 5. Get rid of as many people as possible in the name of performance.
Conclusions- Did innovation happen? Not really. Even if some claims it has happened, it is purely from a cost cutting perspective. Companies are going to look like walking skeleton. I guess this is more less the case with most Indian IT companies.What we need is some positive spiraling innovations.
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3 comments:
It will be interesting to do a study on how Indian companies have used IT during recession? In my view, most of what one does during recession are also useful when the markets look up. What recession provides are new opportunities and triggers that did not exist before.
Such IT innovation can be for saving cost (which is often the obvious) or creating growth. Specifically, a study focused on IT users in India can be very useful. What recession is doing to the Indian industry? It is making IT service companies look at India as an opportunity, as their international opportunities have shrunk. It is also making IT vendors more hungry for business. Is this situation fanning innovation among Indian IT users? Are Indian non-IT businesses leveraging this to invest in IT for efficiencies and growth in *thier* business?
SN, thanks for the comment, I agree with your views. You have opened up a whole lot of discussions.
As a remark, i would like to add, while the Indian IT companies were looking to get business from abroad, multinationals in India were busy establishing their operations and understanding the domestic markets. They now have a fair chunk of large projects catering to the domestic requirements of India. In particular IBM has done remarkably well. The visioning and strategic thinking on part of their leaders needs to be appreciated.
In India, the government spending on IT is very minimal. Most of the governance is still done in age old paper format. Take for example the land registration. There is so much scope for IT to increase the transparency, accountability, prevent fraud, double registrations etc. Of course IT companies need to convince the bureaucratic central govt at a higher level. Of course, there wil be stiff resistance from some sections of the government (babudom). That is another side of the story. TCS, Infosys have done well to capture the domestic market. In times of recession, they can tap the government for projects. It will be a booster for the govts in times of elections to showcase the development story.
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