In his brilliant novel ‘Lila,’ author Robert Pirsig makes the point that all good systems are the result of a harmonious balance between static and dynamic patterns. Static patterns represent forces of continuity and predictability. Dynamic patterns represent forces of change and experimentation. Too many static patterns in your system and you are headed for obsolescence. Too many dynamic patterns and you may descend into chaos. You need a healthy amount of both, but not too much of either.

Far fetched, as it may seem, the time is ripe for Indian IT organization to heed to this profound observation. The success of the IT services industry over the last decade has been based entirely on static patterns - the entire value proposition of our industry has been built on a foundation of process, repeatability, quality, and low cost. Rarely do we hear of Indian IT companies built on the dynamic patterns of intellectual property, innovation, and technical experimentation. Is this single-minded devotion to static patterns good for the industry? I would humbly suggest that it is not.

I believe Pirsig is right, and the most exciting IT companies of the near future will be those that focus on a blend of process and innovation, repetition and experimentation. Companies that build new products, or offer innovative services based on superior intellectual property, or allow employees the flexibility to experiment with new ideas while relentlessly focusing on customers are likely to be more successful, and therefore more exciting to work for. The days of IT services companies succeeding in the global market by simply waving the flag of process excellence and low cost are over.

Outsourced Product Development
Speaking of new IT, one phenomenon that is on the ascendant is outsourced product development (OPD). While most early outsourcing to India occurred with enterprise applications, large global independent software vendors (ISV) such as Microsoft, Oracle and SAP too have gone offshore with their core R&D activities. In the last few years, medium and emerging ISVs have embraced the offshore movement as well, and a growing number of specialized offshore service providers have appeared to service this nascent market. IT trade body NASSCOM estimates that close to $1 billion worth of product development is happening out of India today; it will rise to $6-7 billion by 2010.

What do product companies or ISVs do that is fundamentally more innovative than traditional IT services outsourcing? First, even when the starting point for an engagement is a specific technical activity such as testing or continuing engineering, the ultimate vision is to develop a rich ecosystem – a diverse range of high-end competencies offshore, from product architecture to design, product engineering to product management, professional services to customer care. For example, the product management group within a product company decides which markets to go after, and what functionality to build to address that market. In other words, it represents the essence of what the product company stands for. Furthermore, product engineering itself offers the possibility of world class R&D work, done over an offshore model. Similarly, the professional services group within an ISV tailors and customizes the product to fit the business needs of specific large organizations. When such activities are outsourced to India, it is an excellent opportunity for IT services firms to work on the cutting edge technology and business innovation.