The rupee keeps hurtling to new depths and there is no sign of an immediate resolution to India and the world's economic crises. In this context the IT industry can heave a temporary sigh of relief at the strong dollar but needs to be wary about 2012.
Does anybody here have suggestions - for NASSCOM, companies or even IT leadership ?
Does anybody here have suggestions - for NASSCOM, companies or even IT leadership ?
1 comments:
Yes. This is not going to last.
1. The Rupee Dollar divide will equalize. By Dec 2012, the Rupee should be about 48 to the dollar.
2. The companies that outsource to India, will know the exchange rate is doing us a lot of good and will insist on better pricing
In the long run, given that global volatility of commodities and exchange rates is here to stay, I think all contracts will move to being flexible and not fixed.
Our IT Industry, and Indian industry in general has to realize that the arbitrage advantage is gone, and we need to move in two distinct directions, which are still new land to IT companies:
1. Cost consciousness - High salaries and increments, pizza and coke parties, campuses that rival 5 stars are a thing of the past. Productivity, efficiency and cost control have to become the new mantra
2. Because businesses cannot survive on cost alone and because newcomers will disrupt us where we are, we need to be ahead of the curve in terms of the services and products we offer. As a result, there is a clear case for innovation in service offerings. And an equally and long-known case for moving into the product space. If the Indian IT industry has to continue to remain relevant AND maintain it's growth and toplines, it has no choice but to move the products route. In fact, if you ask me, we are at least 5 years behind on that one.
How do we do this? We collaborate. If the top 3 Indian IT companies put together one R&D kitty and staff one R&D center well. We can move mountains. On their own, they will not have enough muscle to take on US/China/Israel etc.
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