Sunday, May 11, 2008

Creating meaningful technical leadership roles in Indian IT services industry

In the previous post titled “Rs.15 Lakh salary dilemma” I articulated the fundamental issue Indian IT services industry faces in developing technical leadership. Let’s look at various approaches the industry is taking:

· Creating account based roles: Delivery team for a large account is typically has anywhere from 500 to a few thousand engineers (e.g. see Acc1, Acc2 etc in BFSI vertical in the picture). A senior architect in an account would typically be responsible for managing business requirements, proposing solutions and associated architecture, partnering with customer’s technical experts, identifying growth opportunities in the account by connecting dots and partnering with sales in converting them into business, developing talent etc. Such a person may or may not be billable (or sometimes partly billable). However, the value created by such a person in terms of ensuring C-SAT and identifying growth opportunities more than justifies the investment from the organization. The challenge in making these roles work is that they require deep domain expertise and product depth which an offshoring team typically lacks.

· Creating practice based roles: Practices are horizontals which cut across multiple verticals. For example, Oracle, SAP, Peoplesoft are practices in IT horizontal in the picture. This is an area where there is more scope of creating experts. Architects in a practice work with domain experts in creating a technology solution. They are consultants to an account and usually get billed for the consultancy they offer. Depending on the organization brand, one may command differential billing for such people. This justifies their salaries relatively easily. Typical challenge is that many times it is not enough to know say Oracle well. One should be able to do a comparative analysis of Oracle, Peoplesoft and SAP. Experts in Indian IT industry are yet to get to this level (many have a tendency to identify themselves with one technology such as Oracle).

· Fixed price projects: As the organization matures in its capability to manage a complex project all by itself, it gets into fixed price projects (FPP). In FPP, it does not matter whether you have 10 people in the team or 15. What matters is whether you are able to deliver the result in a given cost. Focus shifts from maintaining an average cost per person to building a highly productive team. This justifies having senior technical leaders in the team.

· Developing solution accelerators and/or Intellectual property: Many IT services companies (all Tier-1 companies) are developing re-usable frameworks (also called solution accelerators) in order to reduce time-to-market for the customer. This is an area where senior technical leaders should play a key role. Many times this responsibility is with a group which is separate from horizontals and verticals (e.g. Corporate Technology Group).

Many of these situations need a mindset which is value-oriented rather than effort oriented. For an industry that has succeeded with a time-and-material model for a couple of decades, it is going to take some time before this becomes a serious force.

1 comment:

  1. Vinay,

    The other significant thing is the services for local market. Here the team gets play a complete end to end consultancy/implementation where we need senior folks to play the solution architect role. In typical outsourcing jobs, most of the end-user requirements/scoping is managed by the client (there big deals where this is not the case also) and the companies get to play the scoping role for only their part (which is not necessarily at the final customer level). Whereas if it is a local market case, there are more chances that the companies get to play more end-to-end roles and hence there is a huge need for these senior technical folks.