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December 26, 2006

Wake-Up Call to India

Steve Hamm

Here's a comment from P.A. Zarami that came in over the weekend that really hit me hard. It's a wake-up call to the Indian tech services industry. Rather than leave it in the comment queue for the posting it responded to, I think it's worthy of publishing in the main thread here.

Here's what Zarami wrote:

A number of Chinese posters have written about how the Chinese are low key and just go about doing their work, while Indians just brag arrogantly. I'm of Indian descent and have worked with both Chinese and Indian companies. Sadly, I have to agree with the Chinese posters. I have dealt with mom & pop small Indian consulting firms and I have dealt with large companies like TCS, Infosys and HCL. I can tell you without a doubt that Indian companies are bragging more than they should. To hear them talk now, one gets the feeling that it was due to their brilliance and strategic thinking that they got to this place in outsourcing. How quickly they have forgotten that the only reason they got their foot in the door was because they were brought in as low cost labour to fix the Y2K coding. The fact is that coding produced by most Indian companies is not worth a whole lot. The pricing advantage is a myth, especially in relation to the cost. Let me quote a simple example. To get a relatively straightforward website with Content Management System incorporated, I contacted a number of Indian and Malaysian based development firms. On average, I found that many of the Indian companies were not even aware of what a CMS was, much less about using OPensource CMS products like Joomla and Mambo. Furthermore, to do the same scope of work, Indian companies on average were 3-4 times the cost of the Malaysian companies. India has a chance to do something good in the IT space. HOwever, the head honchos of the major firms are all infatuated with technical people running everything from sales to accounting. If they would get their heads out of the sand and entrust the sales process to professional salespeople, like they do in the U.S. or other Western countries, Indian companies would be truly formidable. However, as long as they continue to rely on engineers to do their selling, they will not succeed to the level they can and they WILL be overtaken by the Chinese at some point. The one thing people don't understand about the Chinese is that they work under the radar. They are actively working towards beating India, not just for strategic competitive purposes, but also for the sake of improving their base. Towards that, the Chinese government will provide the necessary strategic support, e.g. the ability to import the tools necessary to get the job done faster, to learn better, etc. In India, we have a bunch of thieving government bureaucrats who are not worth as much as toilet paper. THey sit and make up rules to stifle growth. They don't allow anyone to import things freely that will help the IT industry or any industry for that matter grow. Just look at the pathethic quality of Indian manufactured goods. You can couple that with the Indian lack of creativity and you have a recipe for disaster. I for one predict that the Indian edge in the IT outsourcing industry will be lost within the next two decades. Having dealt with IT firms from the U.S. to Malaysia, Hong Kong and India, I can emphatically state that every other Asian country nipping on India's heels will make tremendous inroads into the Indian book of business. It will not be just because they can code better, it will mainly be because of the Indian arrogance and hubris over their percieved superiority. My advice to all Indians on this blog and all Indian companies, Get off your high horse and get innovative. Get real good trained sales people to do your selling. If necessary, pay the money necessary and get good American salespeople. Provide for better education and foster better creativity. Finally, learn best practices in coding, as opposed to simply relying on the crutch of CMM certification. I have heard that CMM story in many presentations and we used to laugh about it. It was the typical technical engineer turned salesperson thing to do. Talk about meaningless CMM certification to business people who were more interested in solving a business pain, rather than hear about technical certification mumbo jumbo. Wake up India, and get moving on these things, because before you know it, the Chinese will beaten the crap out of us.

09:00 AM

India

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This letter is irrelevant. Indians are smart. Chinese are smart. Indians have a advantage moving into software faster then the chinese, just like the chinese have a advantage in manufactoring because they built that up first. Indians realize the chinese have great technical skills, most, if not all indian software vendors will venture into china and set up software shops. Mr. Hamm I continue to be baffled as to why you posted this letter. Your column is on Indian business yet your obessed with the chinese. Maybe you should trade jobs with Bruce Einhorn in Hong Kong. Instead, I hope in the future your column talks about business links and collaberation between India and East Asia. India doesnt have alot to be proud of in worldly big business news but the tech industry is a shining star. I continue to regret the complete degeneration of the indian industry and indian peoples by posts like this and on the commentary there-after.

Posted by: Vishal at December 26, 2006 05:07 PM

I agree with Mr.Zarami's statement in spirit. Yes the Indian industry needs humility combined with a lot more hardwork to be able to maintain/consolidate its position in the global outsourcing industry. However, I feel that his comments about the lack of awareness around CMS is in my opinion a reflection of the quality of companies he contacted in India -- probably mom and pop stores -- to say the least.

I have seen teams at my own company handling some pioneering work in the area of CMS both with well known packages like Vignette,Documentum, Interwoven, Filenet, MS Sharepoint and any number of open source tools like Magnolia, Joomla, Alfresco, Jahia, Open CMS etc. If Mr.Zarami is interested I can share case studies and client references too with him.

How I wish Mr.Zarami approached us during his time of need and I am sure we would have been able to help him in his endeavours not just in the area of CMS but probably in other areas too

Posted by: Vishweshwer M at December 27, 2006 05:59 AM

Hi Hamm,

I am surprised by this statements, well i would say Indians have track record and right techinical skills with them.

Allmost all top companies from US outsourcing to India is lamenting the fact that we are known for coding,testing and we are best known protectors of Intelectual properties.

I guess you will be happy to recieve and post comments from Indiduals rather then you posting your view !

Posted by: Praveen at December 27, 2006 07:25 AM

To me this is nothing more than the frustration of someone who wanted to get cheap work done by some Indian firms and everyone refused to either supply bodies or do the work at dirt cheap rates.

Today if you were to ask a CIO why does s/he outsource to India you are highly likely to get innovation, productivity benefits or transformational benefits as one of the top 3 reasons.

It was really hillarious to read through the "support of the government" argument. If Knowledge Industry needs government support and intervention, and China is counting on that, my sympathies are with those who are waiting for the miracle to happen. One of the key reasons of tremendous success of Indian IT industry has been a hands-off approach from government except for provision of tax sops.

As far as threat from other Asian countries is concerned, all top tier Indian focussed IT companies see it as an opportunity more than threat. In a global environment a company will perish if it were not to develop global delivery capabilities in a sector like IT.

If the world were to go by anecdotal evidence of P. A. Zarami then India would not be such a large global delivery centre for Accenture, EDS, IBM and CapGemini.

Indian IT industry must still thank cynics like P. A. Zarami who do not allow the industry to sit back on its laurels, and provide motivation for further improvement and innovation.

Posted by: Sanyog at December 27, 2006 07:32 AM

I think the perception of bragging is due to cultural differences. Chinese are brought up in typical Asian environments where modesty is often mixed up with unwavering respect to elders & others perceived to wise men. Probably, that is why they are so comfortable with the Communism, as they perceive their leaders to be wiser and lead them to a right path.

Though it appears good & romantic, it often leads of indecision and timidness, and this is often visible in their managerial skills, where Indians beat them handsomely. For its smaller economic size, India has much more successful managers and entreprenuers than of China.

Though, a lot of Indians are like the Chinese with full of modesty & timidness, much of educated Indians are more grown in the reflection of American society. Thus, the perceived bragging is due to the emphasis of American system where self representation is appreciated.

In yet another thing, India and China doesnt warrant a comparison. Educated India has a lot of cultural resemblence to US (like the emphasis on service sector, stronger equity markets, education oriented economic development) and simply comparing India with China, blindly wont take us anywhere.

Posted by: Balaji Viswanathan at December 27, 2006 06:28 PM

The author seems to have some sort of inferiority complex. Any business runs on this principle that "if my method delivers better results then mine is a better business model".

Till now Indian IT companies have been doing pretty good compared even with American companies. It is the assumption of the author that a good engineer cannot be a good salesman or a CEO. Look at Jack Welch!

Also a good or near good salesman can be from India even if he may not be "as good" as an American salesman!. This I know from my experience in graduating from MIT.

Still Zarami's comments can be taken in the good sense to come down the earth. But you know the key thing that was required by India till a few years back was the ability to take on the world. The feeling that they are not inferior!. I think Mr. Zarami should also learn from the comments posted!

Posted by: Harish Mukundan at December 27, 2006 09:56 PM

I think there are four points from Mr. Zarami worth noting here:

1) Indians companies Brag too much.

2) Quality of Indian coding is bad

3) Indian government works against business.

4) Real good "trained" sales people are the need of the hour for Indian software companies.

Now Mr. Zarami Here are my views:

1) Indians companies Brag too much: May be yes. But if they brag and then they deliver also on whatever they bragged isn't it fair. I think it's called Marketing.

2) Quality of Indian coding is bad: Mr. Zarami do you still think that quality of code decides the outsourcing vendor. If your answer is yes then I think you are bragging about you position and experience and you have no idea of how big corporations take strategic decisions.

3) Indian government works against business: Yes. But in case of IT industry I think they don't do any good or bad and we thank them for that. Please remain that way.

4) Real good "trained" sales people are the need of the hour for Indian software companies: Why Indian companies are getting multi million dollar deals with very decent margins and compete successfully against companies like accenture and EDS. Is it just English speaking cheap labor? Think and I believe you need to think a lot.

The Mr. Zarami Story(Hypothesis)

--------------------------------

Mr. Zarami wanted to make a site with CMS. He thought of India being the China of Software and he can get a deal at 1/3 to 1/4 of the prevailing rates. For a wafer thin margin no large and medium sized Indian company must have been favorable to Mr. Zarami. This must have infuriated Mr. Zarami and he would have gone for a third or fourth rung company and some of them must have no idea of a CMS. Mr. Zarami Must have contacted some Malaysian companies who would have given him a quote which must have been much less then a top tier Indian company. After this Mr. Zarami writes a mail to Mr. Hamm.

Posted by: Prab at January 3, 2007 03:14 PM

If you peruse the comments it typically reflects the hubris Mr. Zarami is referencing. While there is no dispute on the achievements of the India IT industry, a collective sense of arrogance permeates many of the letter writers. It is this arrogance coupled with poorly trained mid level technical and project managers that will lead to the failure of the India IT industry. Quality of talent is deteriorating across the Indian spectrum and to be in denial is self defeating. Indians should be humbly aware that other countries are equally competitive.

Posted by: rh Mayo at January 4, 2007 08:13 PM

I think all the comments are missing the point Steve is trying to make. Creativity and quality are two key areas to improve if India has to lead global IT industry. It's not a question of only China, but any other developing country with low cost labour and good technical skills can flourish with outsourcing. We have to abandon "chalta hai" (it's OK) attitude and have to deliver everything which can be claimed best in the world.

Posted by: Amit Gadkari at January 5, 2007 02:38 AM

I should agree with Zarami on how we (Indian IT majors) boast about CMM, CMMi, Quality certifications. We add this in all our sales pitch to the customers, but it depends on who sells it. If a person selling has a deeper understanding on these standards, then I am sure he/she would be able to impress on the importance of the following these and thereby the benefits derived by the customer.

However the US customers are also becoming aware of these certifications, it would not be possible to do the business without these credentials anymore.

Posted by: Sureshbabu at January 7, 2007 02:30 PM

With the rising wage costs and such low efficiencies in utilization of capital one can safely say that China's manufacturing leadership will soon be threatened by countries like India. The Indian IT majors are equally conscious of domestic skill shortages and competitiveness of other countries like China, Philippines etc. The hubris and arrogance is again a percieved one and borne out of a basic inferiority complex among many asians who some how believe that only Americans have a birth right to "Bragging". Fortunately most managers of Indian IT outfits behave and communicate more like American managers and this obviously infuriates several people. How can these lowly indian guys "Brag"?!!Interesting effects of globalization!

Posted by: Sam at January 9, 2007 03:17 AM

I supposed this is the difference between Indian and Chinese culture. Indians feel that their recent accomplishment have earned them the bragging rights like Americans do. We Chinese feel that with our measily $1,500 per capita GDP compared to $41,000 for Americans, an almost 30 times difference, we are in no position to brag. Even the PPP figure of $6,000, which is a rather unscientific measure, the difference is still staggering. This is not inferiority complex, it is called simple math, reality check, or whatever you call it. We Chinese are not going to delude ourselves into thinking that we will overtake the US, Japan or Europe any time soon.

Posted by: Shen at January 11, 2007 12:09 AM

While the Indian software industry does indeed need a wakeup call, the article from Mr. Zarami is not the correct wake-up call. Clearly the engineers are doing a wonderful sales job (there is no sight of a fall in sales). The CMM pitch has great by-in from CxO level decision makers.

The real challenges faced by the Indian industry are as follows:

1. Given the explosive growth of offshoring to India, the demand for people has also exploded. This means that the caliber of people coming into the industry today may not be as high as the people who came in some years back. How will the industry continue to maintain its output quality when there is a dilution in the input quality?

2. The current reponse of the industry to Channelge #1 is to make people work longer hours. On the other hand, salaries have skyrocket and that has brought about a sense of entitlment. If I am making good money, I want to enjoy that money, and not work harded in the office. Thus, there is a attitudinal shift in the workforce; the new workforce is no longer as motivated as the older workforce was. A double whammy. (Here is where Prof. Anjani Koomar's thoughts could make an impact)

3. Contrary to popular perception, technology work is becoming more complex by the year. From Client/Server to Internet technologies, complexity increased by an order of magnitude (we now have to worry about performance, scalability, availability which were never an issue with Client/Server). SOA is not making things any easier; we now have to worry about interoperability. Development tools are nowhere near as productive as good old VisualBasic or PowerBuilder. Given challenges #1 & #2, how can the indian industry continue to meet these complex demands?

Posted by: Kishore at January 20, 2007 03:05 AM

@Steve:

I think you derive sadistic pleasure by naming ur post as "Bangalore Tigers" and then go about highlighting only the downside of Indian tech companies and their employees.Probably it boosts ur non-indian readership!

@Infuriated Americans who have lost jobs:

Guys blame it on ur greedy companies which not only outrightly offshores all the jobs but also hires us indians in america/europe becoz we demand lesser salaries than u guys.We are just enjoying the party..but we are aware it wont last till eternity.

@All the bashers of Indian programmer's quality:

We would have taken all the bashings if Windows never crashed or Oracle's products never had any bugs which it conveniently fixes using patches..just two examples that self proclaimed intelligent american programmers have coded.So shut the crap.All the guys who are talking abt quality programming, havnt got a clue wat programming is,let alone having written a single line of code. Thrs one simple truth "In a s/w,as in life, bugs always exist!" .Any hardcore programmer will admit it and that too with all the humility in the world.

@chinese guys:

u guys are masters of copying, even indian companies which are usually low on R&D ,have slapped copyright infringment cases on u guys. And abt being modest and stuff, let me tell u..u guys have nothing to brag, so u guys dont brag.Period.

@ppl wanting to go to malaysia/ukraine etc etc:

Pls go, we'll anyway take over some companies over there and send the jobs back to India..and that too at higher billing rates :P

@Indian guys:We have to take the criticism on chin..nobody here is perfect, but hey that shudn't stop us from trying to be one.

Posted by: v at February 2, 2007 12:22 PM

To begin with I am an "INDIAN" programmer. Much of what Steve has said is true. Here people go for IT jobs simply because it pays much better than any other sector. Every body from an Engineer (irrespective of his stream/specialization) to Science graduates queue up for IT jobs. This is what I have believed. If you really love something you will do it the best. If you work for other reasons ..well.. Here a baccha (kid) joins an IT firm and in two years he wants to be a team lead , next year a Project Lead and a manager within the next couple of years. In between he wants to go to abroad and rake money. Also if at times he feels like earning more, just get a couple of job offers and threaten the boss that you will quit unless... With the deadlines ahead and the delivery schedule in jeopardy the management usually obliges with a few big fat carrots !! If you look at the engineers being churned out (notable exception of IITs and, to some extent NITs) the quality is substandard. One often gets shocked during interviews !! Really makes you wonder as to how such a person could manage to survive aka hide for so many years in the industry, he must surely have done nothing other than filling up timesheets (billability and headcount) and warming the bench at other times. ( Some managers would have made sweepers and secutity men billable if permitted ) It is a serious time for introspection. Being patriotic and jingoistic is fine, you have just managed to put up a politically correct stance, but the bare truth cannot be denied any more. When I had entered the industry seven years back, people were still very particular about work, any mistakes frowned upon.

But today if something doesn't work, the programmer hardly cares. File a bug and I may look at it ! After all in this big imperfect world why should I be an exception ? The sab chalta hai (anything will do) attitude , call it hubris or confidence or arrogance is really something to be ashamed of. And it is not just China, there are countries like Brazil and Russia to contend with. In general the average Russians are technically superior and Chinese work much harder than an Indian IT pro.

( I can already hear loud moans of protest ;-) ) The day those folks pick up English, sluggards out here will finally know what competition is all about. Don?? say that these countries don't have entrepreneurs, you just have to look at the growing list of millionaire businessmen in Russia !!

To Shen: Apart from lacking a sizeable chunk of English speaking Software professionals, the political climate of China doesnot inspire much confidence in the west. The RED threat is always looming, notwithstanding the recent loosening of controls. Even if you consider the trade between India and China, the balance it tilted strongly in China's favour (without accounting for the illegal flooding of cheap Chinese goods into the Indian markets' China Bazaars) Having said that may the best man (or woman) win.

Posted by: Francis Ouseph at March 1, 2007 09:22 AM


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