Teknologisamarbeid med IndiaIndian IT/Software Professional Background and Recruitment

Rajendra Akerkar

www.vestforsk.no

www.vestforsk.no

If there was Justice in the world…..

Sorry, the Board is Outsourcing your job to guy in India who’ll be CEO for a 10th of your salary.

www.vestforsk.no

www.vestforsk.no

Ancient civilization : 2,500 B.C. 325 languages spoken – 1,652 dialects 18 official languages 29 states, 5 union territories 3.3 million sq. kilometers - Area 7,516 kilometers - Coastline

World-class recognition in IT, bio-technology and space. Largest English speaking nation in the world.(15.2%) 3rd largest standing army force, over 1.5Million strong. 2nd largest pool of scientists and engineers in the World.

INDIA – Basic Facts

Parliamentary form of Government Worlds largest democracy. Worlds 10th largest economy.

Source: UNESCO, 2011

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Historic Prelude…

1975 : After 25 years of democracy, Emergency is declared in India , following an electoral defeat of

the Congress Party. 1977 : Emergency is lifted . Public opinion swings in favor of a coalition government.1978 : The new Janata Government asks multinationals to

leave India. IBM and Coca Cola are heavily impacted.1979 : IBM India employees form a new company called

CMC to maintain IBM equipment.

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Historic Prelude…

Early 1970s

Tata Registry formed earlier to provide shareholder services, grows to Tata Computing Centre and then evolves into Tata Consultancy Services.

Provides services to companies outside the Tata group. Is hungry for growth.

Mid 1970s

Senses the widening gap between the government and IBM . Creates a structure and platform for Burroughs Corporation to enter India.

Enters into an agreement to provide services to Burroughs Customers in India.

Develops considerable competency in Burroughs platform of System software, Languages and Applications.

Leverages this skill base to partner with Burroughs to provide services to Burroughs Customers abroad

Late 1970s

Burroughs Corporation sees the opportunity and seeks to form a joint venture with the Tatas to form a new company called Tata Burroughs Limited.

Many other Indian companies follow suit and enter into similar partnership with Digital Corporation, Wang etc.

TCS decides to widen its skill base to IBM, Tandem and other platforms. Positions itself as vendor neutral and capable of cross platform work.

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The labored 1980s

Consequently the IT services industry develops mainly as a Manpower Services Provider and not as a Project bidder. Margins are low. Growth is slow.

The silver lining is the extensive development of Unix skills in India.

The going gets tough. Government policies make it hard to import computers , necessary to develop skill base. Foreign travel is restricted.

The telecommunication infra structure in India is primitive. Not conducive to provide quality offshore services.

Banks are unwilling to provide support to the software industry as it is not sufficient collateral.

Co-founder of Infosys N.R. Narayan MurthySudha Murthy

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The opportunity of early 1990s

The IT sector grabs this opportunity to expand aggressively. Imports state of the art systems; trains staff and seeks to enter international markets with project outsourcing. In the process the industry discovers the magic of Quality, Processes and Best Practices.

India faces a massive crisis of low foreign exchange reserves and the possibility of defaulting on international loans.

The Congress government takes a bold step to deregulate, liberalize, privatize and globalize the Indian economy. MRTP and FERA Acts withdrawn or diluted. Moves away from socialism.

Taxes are lowered. Import impediments are removed. Foreign investment and tie ups are welcome.

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Government initiatives and progressive policy reformsEstablishment of a nodal agency (STPI)

Software Technology Parks of India (STPI) was set up to provide:

Fiscal benefits like tax holidays to attract investment into the industry

Basic InfrastructureSingle-window clearances for setting up Export

Oriented Units (EOUs)Virtual model allows firms to avail benefits without

restrictions on location

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When Capability Maturity Model (CMM) was introduced in the late 90s, almost the entire Indian IT industry went for a re-certification and within a few years, many software companies matured to level 4 or level 5.

More than half of the total high-maturity organizations in the database of the Carnegie Mellon Software Engineering Institute (SEI) are from India.

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Key Players

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The Indian IT Advantages The Indian IT industry

started as a labor-arbitrage body shop, but is now moving into knowledge-intensive services.

Indian IT engineers have not only learnt how to solve problems, but have gained experience in re-engineering processes and making process flows more effective.

The Indian IT Advantage

Heritage: World's largest democracy,

open to West, mathematical competency

CMM/ISO: Quality & reliability, common

vocabulary, professionalism

Government: Tax breaks, software technology parks,

simplified regulations

Investment: Foreign direct investment,

presence of MNCs, good corporate

governence

Language: English as a business

language, English as a medium of

education

Talent: Qualified engineers, IITs, IIMs,

private training institutes

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Genesis of the Indian software industry

Infrastructure Management

Application Development

Application Maintenance

Business Process Management

Network & Data Security

System and Data Base Administration

Package

Implementation

Consulting

IT Services Segments

It is a 400 Billion dollar industry now.

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Infrastructure Management

Application Development

Application Maintenance

Business Process Management

Network & Data Security

System and Data Base Administration

Package

Implementation

Consulting

IT Services Segments

These segments have evolved over decades. They were unbundled over years. The skill sets needed have diversified and have given rise to specialization over time.

Genesis of the Indian software industry

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Indian IT Industry – Innovating Constantly

Wipro Example: Global Delivery Capabilities

Wipro Example: Global Delivery Capabilities

1. India pioneered the Global Delivery Model

2. Talent Development – A critical success factor

Pioneering the Global Delivery Model

Wipro Example: Strong 360º PortfolioWipro Example: Strong 360º Portfolio

1. Indian IT Industry: Value added Offshoring

2. Leading IT companies have transformed into Full Service Providers

Building complete services portfolio

PackageImplementation

12%

Infrastructure Services

10%

Vertical Focus

IT Enabled Services /

BPO10%

Consulting 5%

CustomApp Dev &

Maintenance 30%

R&D Services

26% Testing

Services

7%

Others10%

Telecom Service

Providers5%

Finance18%

Embeded15%

Telecom OEM17%

Manufact-uring12%

Energy & Utilities11 %

Retail12 %

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Moving up the value chain India, earlier the primary global

offshoring destination for low-end back-office services, is now emerging as an innovation and research hub

India is estimated to continue attracting substantial investments in the sector, with the cost-arbitrage factor expected to prevail for another 10 to 15 years

IT/ITeS sector: From the back-end services location to the global innovation hub

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Value propositionBreadth of service offering

Service offerings have evolved from low-end application development to high-end integrated IT solutions

Range of services offered by leading players spans a wide spectrum cutting across multiple verticals

Quality/maturity of processesHost to more than 55 % of global SEI CMM Level 5

firms Expected to host the highest number of ISO

certified companies

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Value proposition Cost advantage

Cost of an engineer is about 20 – 40 % of comparable cost in European Union (EU)

Selling, general and administrative costs approximately 80 % of comparable cost in EU

Average offshore billing rate of US$ 20 to 35 per hour; about 50 to 70 per cent lower than EU

Ease of scalability 6,75,000 technical graduates per annum, of which 4,00,000

are engineers Over 50,000 MBAs graduating per annum Leading firms add more than 10,000 new employees per

annum

Global and 24/7 delivery capability

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Firm foundations in talent and infrastructureDedicated cost effective quality real estate in the form of

Software Technology Parks (STPI) and Special Economic Zones (SEZs)

STPI infrastructure available across the country demonstrates government’s support to the sector

High quality telecom infrastructure with cost of connectivity declining rapidly and service levels improving significantly

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Firm foundations in talent and infrastructureReal estate, air and road connectivity, hospitality

registering impressive growth and providing supportive business environment to IT sector

Infrastructure availability is set to complement the industry growth, with the Government of India working towards capacity building

India possesses an abundant talent pool, producing 6,75,000 technical graduates per annum, of which 4,00,000 are engineers (Source: AICTE 2011)

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Firm foundations in talent and infrastructure Industry stakeholders including individual firms,

associations undertaking initiatives to address issues concerning suitability of talent

Some such initiatives includeNational rollout of skill certification through NAC

(NASSCOM Assessment of Competence)Setting up finishing schools in association with

Ministry of HRD to supplement graduate education

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IT hubs in India Foreign investors see

India as an attractive investment option, despite the uncertain global economic climate, according to the second edition of Indian Attractiveness Survey.

20% Foreign Direct Investment (FDI) increase in India in 2011.

Nearly 255,416 new jobs created by FDI projects in 2011.

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Established IT/ITeS hubs in India NCR - Delhi

Total STPI registered units by 2010-11: 1,400 (150 added in 2010-11)

IT/ITeS majors: IBM, Genpact, Oracle, Am Ex, Convergys, HP, General Motors

KolkataTotal STPI registered units by 2010-11 : 166 (28 added in

2010-11) IT/ITeS majors: IBM, Cognizant, TCS, Infosys, Wipro

MumbaiTotal STPI registered units by 2010-11 : 630 (40 added in

2010-11) IT/ITeS majors: TCS, Infosys, Wipro, Siemens, Accenture

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Established IT/ITeS hubs in IndiaHyderabad

Total STPI registered units by 2010-11 : 1,060 (130 added in 2010-11)

IT/ITeS majors: HP, Amazon, Verizon, Convergys, EXL, Infosys, TCS

PuneTotal STPI registered units by 2010-11 : 635 (108

added in 2010-11)IT/ITeS majors: Cognizant, Convergys, EXL, KPIT,

Msource

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Established IT/ITeS hubs in India Bangalore

Total STPI registered units by 2010-11: 1,700 (201 added in 2010-11)

IT/ITeS Majors: Infosys, Wipro, TCS, HP, Siemens, HSBC, Compaq

Cumulative software exports from Bangalore are estimated at US$ 11 billion, positioning it as the leading IT hub of India

ChennaiTotal STPI registered units by 2010-11: 900 (131 added

in 2010-11) IT/ITeS majors: Infosys, Wipro, Accenture, Cognizant

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Emerging IT/ITeS destinations Transitioning to the Tier 2 and Tier 3 cities

Indian IT-ITeS industry is primarily concentrated in seven clusters: Bangalore, NCR-Delhi, Hyderabad, Chennai, Pune, Mumbai and Kolkata

Most IT companies started their operations in India in tier 1 cities, and have subsequently expanded into tier 2 cities

Emergence of tier 3 cities like Chandigarh, Mysore is prominent in the ITeS-BPO segment

Tier 2 and tier 3 cities are gaining importance in the IT/ITeS industry as these locations offer higher savings in administration, maintenance, real estate and infrastructure costs and human resource availability and costs

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Indian Education Structure

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Distribution among rural and urban area

Central Universities: 18 Indian Institute of Technology (IIT): 14 Indian Institute of Management (IIM): 6 State Universities: 280 Deemed Universities: 121 Undergraduate Colleges : 40,725

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Special Training Indian IT companies keep aside

between 3% and 5% of revenues for training programs

Certifications like PMP® by the Project Management Institute, or application technology related certifications by Microsoft®, Oracle®, SAP®….

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Generalized IT & BPO career matrix

Source: AICTE

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Typology of Employment

Study by Global Talent Metrics in cooperation with the Indian Institute of Management, Bangalore

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Salary structure

(source: NASSCOM 2010)

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Recommendations for Effective Recruitment A study-cum-recruitment tour to India

Suitable time for India tour: October/November/December 2013.

Duration: 6 to 8 days

Regions to visit: Bangalore and Pune/Mumbai

1st and 2nd day: Visits to companies in ‘Electronics city campus’ in Bangalore IT Services Majors - Accenture, Cognizant, Infosys, IBM India, Mastek, TCS, Wipro.

Mid-size Companies - Birla Soft, Celstream, NVIDIA, Patni.

Academic Institution: International Institute of Information Technology, Bangalore 3rd day: Recruitment workshop and interview of potential candidates (specially

experienced software professional in the required field)

 

4th day: Visits to companies in Pune/Mumbai. IT Services Majors – TCS, Cognizant, Infosys, Mastek, Persistent Systems.

Mid-size Companies - Mphasis, Cybage Software Pvt Ltd, Cosmos eSolutions Pvt Ltd, Patni.

Academic Institution:  Maharashtra Institute of Technology (MIT) Pune/

C-DAC Pune / IIT Mumbai 5th day: Recruitment workshop and interview of potential candidates (specially

experienced software professional in the required field)

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Thank you!