IT Leaders and their Challenges Date:   Tuesday , November 29, 2011 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. Today IT leaders are finding this challenge difficult to cope with. They will have to find the solution within. Recruiting right talent, upgrading their knowledge, training them on various business domains, creating culture of customer focus and striking balance between client’s expectations and individual employee capability will help to great extent. Manage People aspirations about compensation and growth: In IT, people are the assets. In this business breaking work in elements, applying time and motion study and run it like traditional production industry does not help. Here creativity in people matter. Today challenge is to keep this workforce motivated enough for delivering what client expects. IT workforce is white collared one. I have seen employees leaving organizations just because they think there is nothing new to be learnt. As IT leaders have to showcase value addition to clients, similarly they have to do it for their employees internally as well. Creating culture of openness, empowerment, transparency and instilling sense of ownership and responsibility will help finding answers to this challenge. Developing environment in the organization which will constantly throw new challenges at people and thus allowing them to grow individually can be the key to meet this challenge. It is extremely important to create a culture of ownership and innovation to motivate people. Compensation definitely plays the role. One needs to work on this aspect as well. Having transparent, objective and fair set of rules to evaluate people help them to build confidence in the system and enhances attachment with the organization. One thing to be understood here is we are not dealing with machines but people. Human being is the most complex equipment ever designed. If leaders start dealing with people like machines, it will pave the road to failure. Developing leaders in the organization: In IT SME sector I find this is major challenge. On one hand it is difficult to hold on to good people for long time and on other hand there is just not enough talent or will to take leadership positions. People love to remain as a technocrat. They do not want to move to the leadership positions for the fear of losing their bargain-able position. Many times it is believed that if people are promoted to higher management position they will themselves learn to become leader. This can be true in case of technology understanding but not for leadership. One can be a born leader or can be developed as a leader over a period of time. Organizational leaders should have patience to wait for results and invest enough resources to develop these upcoming identified leaders. Everyone working in the organization cannot become leader. We need to select right interested candidates, nourish and groom them. Instead of focusing on attrition of entire organization, I will advise to minimize attrition in this group. After all we cannot satisfy 100% of the people but we can definitely delight this small group by meeting their aspirations. Once you have this framework with you, each developed leader has to percolate it down the organization. Undivided focus on this initiative will yield results over a period of time. Build dependable agile systems giving desired results: Building foolproof system is the most important job that leader has to perform. Leader has to involve people working in the system in doing that. Systems defined and not improved over a period of time to meet changed expectations of client will bring status quo and rigidness. This will also induce bureaucracy. Leaders who want to keep pace with the competition need to be on the top of systems and demand insistently from people concerned, to improve processes. Leader need to invest time in periodic reviews, guide, coach and integrate resources to make systems agile, deliver results and meet requirements of various quality standards.