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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

IT Leaders and their Challenges

Devendra Deshmukh
Tuesday, November 29, 2011
Devendra Deshmukh
In today’s fast moving and highly competitive era, there are several challenges that leaders in IT sector are facing. Here I share my views on these challenges, especially for those faced by in the SME sector.

Monetization:
Margins in IT business are going down. There are plenty of low cost providers, who are providing tough competition from all over the globe. When traditional industry is busy focusing on 6 sigma quality levels where rework and rejection is almost negligible, in my experience SME IT industry is lagged by around 30 inspection cost and around 25 to 30 percent rework cost. Today client is not ready to pay for it. Client also thinks that project management cost charged separately, is overhead and is unwilling to pay for it. Client expects to follow good practices which should be inherent part of the way we do business, which is indicating SME IT industry to absorb these costs in future. It is difficult to get people with relevant experience and then training cost gets added, which cannot be charged to client. This is and will affect bottom line as SME IT cannot charge premium rates like giants in IT. Leaders have to find solution to this by building their USP, making value addition evident and managing client expectations successfully, thus generating repetitive business.

Staying ahead of the competition: Thinking about future needs of customer and investing time to productize these services or products will keep organizations in existence. With ruthless competition around us and number of changing parameter which is not fully in our control it is essential for leaders to invest 50 percent of their time in solving problems of tomorrow. Observation is that leaders get engrossed in solving problems of today and thus lose touch with future.

Manage Client Expectations: Things in IT are changing rapidly. Technology changes, products keep changing, client expectations do change, concepts change, method of providing service change and above all the people working with the organization also change. It’s difficult to maintain and grow in this chaotic, ever changing environment.

Clients today are expecting much more than body shopping. IT industry in India is more than 20 years old by now. Client expects people assigned to his project as individual thinkers, innovative, adding value, understand business, priorities and self-driven. Client does not want people who are reactive. Baba Kalyani, one of the leading industrialists in India said some time ago: “If we do not innovate and are not creative then our country will be providing slaves”. I personally think there is lot of truth in it. I have seen clients doing comparison amongst same experience level technologist from India and his or her country. There is vast difference, cultural, time lag, knowledge, language, business understanding and many more. It is only cheap labor for which they get attracted to India. Once they start looking at the total cost, they find disappointing figures and start pulling out of the relationship. In many IT firms employees are sold for the position, which they are not capable of and that is where seeds of dissatisfaction are sown. Slowly all other shortcuts are taken to keep project profitable, start acting negatively and relationships fail.

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