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Part - IV

If the Indian IT companies are to have an edge over their transnational counterparts, they have to alter their business functions. Indians have a more versatile academic curriculum than their western counterparts. They have an extremely solid base in Mathematics and are very good in creative problem solving. Hence, there's little doubt that they can invest their grey matter in the field of consulting.

Fair Game

The business houses should follow the acquisition process more aggressively. IBM has acquired Pricewaterhousecoopers under the aegis of its consulting platoon. Accenture, the erstwhile Anderson Consulting has always been an astounding consulting firm. Indian companies like TCS, Infosys, Wipro should earnestly deploy a consulting aspect to their business process. They should aim to get a US front office, take on jobs as their US counterparts and then execute them as much as possible within the US by the on hand US employees of the taken over company. This can be the strategy to counter US software vendors who posing as American companies advertise jobs and subsequently get them done offshore. The business model is bound to change in this respect. The cost arbitrage deployed in the offshore environment, in order to benefit from the wage differential in the low cost countries, has to be curbed. In order to acquire consulting skills in a shorter frame of time, they should acquire existing consulting companies, irrespective of their size. They should also take care to absorb them within the parent structure. Thereafter, the absorbed companies should transfer knowledge to the parent company and get involved in consulting assignments simultaneously. This "Knowledge Deployment" model would allow the latter to grow within the organizational shell and also, help in posing a latent threat to the consulting biggies of the US.

Also, the Indian IT companies must climb the value chain and acquire domain specializations to be competent enough to address larger issues like business problems. They should offer consulting skills in a variety of verticals, namely, Finance & Insurance, Manufacturing, Telecom, E-business etc. They must not confine themselves to delivering technical solutions to solve IT related problems. Also, persisting on the Offshore Delivery Model for a longer period may help in managing scale and operational margins, but will stamp India's image as the IT-Back End support hub forever. Going up the value chain can result in a two-forked approach. One of them is the development of new technologies, thus keeping abreast with the software product companies worldwide. The other one is to put into use the consulting power to deploy this technology. Hence, the company benefits from the product development department as well as the consulting department. Also, the scale of recognition increases placing the company in the international business environment in an amazing position. But, traditional Indian IT companies are too parochial to make a proper distinction between services and software production. They are too compulsive on retaining their service status for time immemorial. This perception needs to change if one is really preparing to venture global.

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* Contributed by: -
Kamal Misra,
PGP - I,
XIM, Bhubaneswar.