Where is global information technology held over the next year or so with the US economic slowdown? Will the budget tighten for the CTOs as well and where do Indian companies fit in?

An expert panel of global and local experts discuss where global IT is headed over the next twelve months and where Indian companies actually fit in into that picture. The panel includes Peter Bendor Samuel, CEO of the Everest Group who tracks the macrotrends in global IT and one of the Gurus in the IT World, Rod Bourgeous, a celebrated IT analyst at Sanford C Bernstein, which is almost a mover and shaker in the IT world from the equity analyst fraternity and Stan Gibson, Executive Editor of eWeek, one of the world’s largest IT publications.

For the local perspective, the panel has B Ramalinga Raju, Head of Nasscom and Chairman of Satyam Computers and Ram Mynampati is President of Satyam Computers. The panel discusses where global and Indian IT is headed over the next twelve to twenty-four months. 

Excerpts from CNBC-TV18’s interview with the panel:

Q: Where does the world stand on this whole outsourcing backlash? We just came center stage for a while and seem to have died down a little. Do companies, countries have issues with outsourcing as such?

Rod: If you look at the history in United States particularly, in the last round of political campaigns with a lot of backlash against offshore outsourcing, I think it helped the offshore trend, as it was basically free advertisement. Every time a reporter would speak about movement of jobs offshore in United States, I think it basically added advertisement to the offshore trend.

I also wanted to speak of a couple of points about labour arbitrage. What we are seeing is while five years ago the allure of moving offshore was labour arbitrage, lower cost labour, now it is not just cheaper labour, it’s actually the access to talent.

When I speak to a room of CIOs and ask them why you want to move in more aggressively offshore, the answer is rarely that it has a lower cost labour. Accessing some of these offshore labours in India and other countries, the ability to ramp up talent is much quicker and it could be lower cost. I think increasingly it's more of the demand driven by the need for access to talent rather than just cheaper labour.

Q: Is it a fine art pool that you sense or do you think the kind of graduates that we are churning out of universities, we are okay for the next four-five years because at many forums, many of your peers, CEOs of other companies have mentioned that if you need to keep on adding 5000-10000 people every quarter individual companies then you need far more talent coming out?

Raju: It has two dimensions to the whole issue. One is the shortage as it exists meeting the demand that has come India’s way. India produces two million graduates and about five hundred fifty thousand engineers every year. All told, the Indian IT and the BPO industry so far has employed only 1.3 million people.

Therefore, on one hand, there are quite a large numbers of engineers and graduates coming out of colleges and on the other hand, only 10-15% of them are being used to service global markets.

The rest are not global industry-ready today, but to make them that, it doesn’t take a huge effort. All it takes is the three-nine months of focused training and it has little to do, at least in 90% of the cases with intellect, as much as it has to do with discipline and a process-driven approach.

We have had a positive experience in promoting a couple of Gram ITs, village BPOs, where as a part of our social responsibility initiative, we have had about 100 graduates in each of the villages come together and provide services to Satyam to meet our internal demand. Our experience has been that they have come up to mark rather very quickly and the quality of services that they are providing matches the best in the world.

It is just that they have been able to spend the required time to prepare themselves and it happened. Therefore if finishing schools are put in place, which I believe will happen because the private industry is looking at this as an opportunity and they will take advantage of this large talent pool to prepare them for the large world markets, then in the longer-term, there is a potential to meet the existing demand better through greater human resource supply.

Contd on page 2....