Indian IT Service & Innovation

Over past two decades several of Indian IT companies had a good rise in their fortunes.  They inched closer to Big 5 consulting companies.  All these happened because of several factors

  • Low cost alternative
  • Global presence in several countries
  • Offering 24×7 services
  • Better and bigger talent pool

While all these helped Indian IT services to grow faster than brick and mortar business anywhere.  Along with this growth came some problems such as

  • Higher salary
  • Lower productivity due to attrition
  • No Innovation
  • No / minimum investment on newer technologies
  • Management focused on cost savings

All the above has caused profits of some of the Companies such as Sonata, Mindtree to drop.  This trend might continue for the other tier 2/3 players if they focus on openration costs as way to survive.

IT service providers need to revisit their strategy, focus on innovation and new technologies as

  • Cloud becoming dominant in SaaS, PaaS and IaaS most the IT services players will feel the pinch.  The SLA’s will be managed by cloud vendors and this might cause loss of revenue in managed services or reworking on cost for IT service providers.
  • Innovation such as iCloud, Google sync will draw customers to look at a new paradigm where Network, System and database administration are more so managed by Cloud players than IT service providers
  • With less investment in newer technologies and more focus on cost savings the management will have staff with no knowledge of latest trends and happenings in the Industry.  This might lead to retrenchment of work force.

Gone or the days where IT services will develop large applications.  Force.com, Amazon and Google Apps have applications which are ready and can be customized to needs.  There are thousands of these applications which can be used as is.  IT service providers bubble is sure to burst if they do not think of innovation, Cloud as path for transformation to their clients.

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Strategy – Steps for Future

Strategy is a long term plan to achieve a particular goal — Wikipedia.

Every company needs a Strategy in place to make sure that they survive threats from their competitors, shield themselves from economic crisis.  For example   some US Car makers knew the dependence of their automobiles on oil, they still went on with usual course of manufacturing  huge cars and trucks.  Only to realize that there is no future for their automobiles.    Toyota & Honda were smart enough to explore alternate ways of reducing dependency.   The US car makers either failed to strategize or implement the strategy they had drawn up.  Other example is demise of walkman’s, CD Players.  Only Apple stands out of the rest of the crowd who started these products.  Though Sony started the revolution it did not innovate enough to stand out as a leader.

Every Organization should think on following lines

  • What should we do to make sure we stand ahead of the curve.  In short Where are we going
  • How will we get there and track if the strategy we designed is being implemented.

Listed below are some of the high level steps for developing and implementing a strategy

strategy-steps3

Please follow this post for detailed steps

Role of CTO in a Consulting Organization ?

CTO’s are business savvy technologists,  responsible for Technical Strategy and identifying technologies that provide competitive advantage for their Organization.  

Each Consulting Organization percieves CTO role in a different way.    CTO’s are hired to head their R&D office and competencies.   CTO’s are appointed based on Organization structure and investments in areas of Research.  The focus of these organizations are to make sure they have competencies in new technologies,  their investments are in line with the vision.   

 Having CTO in an System Integrator / Consulting Organization has its own drawbacks.

  • Most of  the clients have their own CTO’s and they drive the strategic direction with regards to their projects.  
  • Consulting Organization having  Research wing at departmental level which report to their Delivery arm.  In that case CTO role just becomes a namesake
  • Setting up of CTO office comes with a price tag, so it should be a carefully thought out strategic decision. 

When does a Consulting Organization / System Integrator need a CTO?

  • When the vision of the Organization is forward looking with respect to Technology and Clients requirements
  • The Company has definitive ideas on what CTO is supposed to do.
  • Alignment of all R&D and Competency under one office or person.  This might require an Organizational change.
  • CTO Office should not be counted as money makers this might hamper the R&D
  • Sufficient investments to make sure that the set vision is realized.