6/28/2010 The Hindu Business Line : Paradox of…

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Front Page
Columns
Amit Garg
Index New Business Opportunity
Archives It's one of the paradoxes of our time. India is the go-to country for the world's IT requirements, but Get Our Play School Franchise. Make A
Indian companies are among the least IT-enabled. Why is this the case? Difference While You Make Money!
Features www.IPlay ILearn.com
To start with, demand lagged the global market for a long time. While the world transformed its
Investment World processes and invested in technology, Indian businesses were happy to rely on manual Offshore Sourcing
eWorld processes and shunned investments in technology. Forced to look outwards, Indian professionals Wholesale Price from Manufacturers Join Us
Brand Line discovered a world hungry for their talent. The industry grew rapidly and software became the Today & Inquiry Directly!
Mentor career of choice for a generation. Ironically, this created new opportunities for Indian businesses Made-in-China.com
Life — which started benefiting from the world's rediscovery of India and the potential of a growing
Brand Quest domestic market. Meanwhile, they were plagued by a shortage of quality manpower and needed to Stories in this Section
The New move towards system-driven organisations. Here's where the happy story ends. What's in store for Mobile
Manager telecom?
BL Club When domestic companies start looking for IT talent, they struggle. Most of the talent is drawn by
Smartbuy the large IT service providers or the back-ends of global technology players. These companies
Books offer a brand, global exposure, career growth and skill up-gradation. A domestic company Paradox of buying IT
Gallery struggles to offer any of these — and certainly not the overall package. Unfortunately, even services services in India
firms focused on the Indian market struggle to attract talent for similar reasons.
Move over, iPad?
Stocks
An Indian company has a difficult choice when it embarks on the technology journey. Attempt to
create its own IT capabilities — a battle it will almost certainly lose — or outsource the work to a Top Indian firms need to
Quotes watch out…
SE Diary domestic-focused IT provider. Many companies oscillate between the two models. Few
Scoreboard companies are able to build their own IT capabilities. Even those that manage this task are often
Tech role in right to
Open-End Mutual grossly inefficient. In our experience, they function at 25-50 per cent of the efficiency of a top-line IT education
Fund services provider. Most companies have the Hobson's choice of going with an outsourced service
provider. But which one? The top Indian IT firms do not really serve the domestic market — at least
Got the message?
Foreign Exchange not the SMEs. So, one has to choose amongst a bunch of smaller providers — who are typically
struggling with organisational issues themselves, and offer very variable quality. Quiz
Rates
Make the best of it Explore the white space
As an Indian SME, one's options may appear limited. However, there are several practices that can
Shipping Cartoon
be used to make the best of this situation. Some of these may seem obvious, but it is surprising
how many companies try to do it differently.
Ports
A company must strategically distinguish between IT infrastructure management and application
development. Today, it is almost impossible to internally develop a high-quality, scalable
Archives application development organisation. One has no choice but to outsource. Infrastructure
management is different. Even though several outsourced providers exist, it may be possible to
Yesterday manage this internally.
Datewise
Resources While outsourcing, spend a lot of time on vendor evaluation — this is a partnership, not just a
In Focus contract. Opt for companies that have overcome the basic scalability challenges — and are no
longer one-person dependent. Many companies prefer to work with smaller vendors as they are
easier to “control”. In reality, however, such companies face too many growth challenges of their
own to be long-term partners.

Look for the crucial middle-management layer and the quality management systems that allow a
company to scale effectively. (“Rocket Singh” kind of companies are good for the short term, but
Search are too dependent on one person). If needed, hire trained vendor management people for the job.
Importantly, don't be swayed by the sales pitches or personal relationships — buy what you need
and not what is being sold.
Group Sites
Approach costs differently — think of the sustainability of the relationship and the health of your
The Hindu vendor. Unless the vendor makes reasonable profits, he will find it hard to invest in his people and
The Hindu ePaper will be hit by attrition — and his service standards will lower themselves over time. It may be a little
Business Line counter-intuitive, but sometimes it may be better to be soft in the negotiations.
Business Line
Think of your IT strategy as one that involves a series of interlinking blocks — rather than a
ePaper
universal solution. It is easier and faster to build the blocks, and any problems can be localised.
Sportstar
Universal solutions are hard to find, and very difficult to create.
Frontline
The Hindu Avoid re-inventing the wheel for products that are already available in the marketplace. One can get
eBooks multiple vendors to service an established product — and cannot be held to ransom by a
The Hindu developer. In general, a global product may provide better value than a home-grown solution. The
Images initial cost may appear high, but the long-term cost and, more crucially, reliability is almost always
lower.

For companies that are in the process of moving to an ERP, start with plain-vanilla
implementations. First get the processes automated, and then find ways to improve them. Trying
both things at once rarely works.

Build a programme management layer within the company, or ally with companies that can
manage IT projects with outsourced vendors. Even with the best-of-breed vendors, it is critical to
have the right programme management capabilities.

It's still a rocky road, but following these practices can significantly improve the chances of
implementation success for an IT buyer. However, if this market is to truly improve, IT suppliers
must find a way to crack the Indian market. More on that subject in another column.

The author is a Director at MXV Consulting Pvt Ltd and can be reached at amit_garg@mxv.in

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