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IT leadership- from Projects to Value Creation
Ramesh Loganathan
Thursday, December 2, 2010
The Indian IT industry is over 2 million strong now! Comprised of some of the best minds in the country (unfortunately, in that process also starving other science and art disciplines of good talent). That over the past two decades has helped create an industry that the world has now taking serious note of. Amidst all this, if one were to look back and see what we have actually residually created, it is just organizational and people capability to deliver on large scale IT projects. Just that! Nothing much else in terms of other value like IP, products and innovation! This is kind of a serious lost opportunity for such a large high-talent pool! And the only value that the industry leverages today is the revenue potential that the cost-arbitrage brings. With strengthening rupee and the rising cost structure, this is rapidly declining though! Industry has to recognize this and make some fundamental shifts, towards more of IP and value creation.

This puts serious demands on the IT leadership. Given the projects and IT management focus, the leaders were more “execution” centric. The IP and value creation imperative calls for a completely different mindset — one that is more innovation and solution centric. Leaders that are much more entrepreneurial and out of the box thinkers. Both in terms of starting new startups and products as well as intra-preneurs within organizations that take on a more innovation driven approach to delivering the business objectives of their organizations. Be it in looking for innovative approaches to the end customers solution requirements- as opposed to the earlier fixation of maximizing billing time-, or to look for common IP or frameworks t hat can be built and used across projects or even across clients, to even looking at carving out IP from projects to a more generic product platform to even persuading their managements to actually invest in new product opportunities.

To enable this IP creation, senior management in the IT industry need to look at this afresh. There cannot be an incremental shift from present models. It has to come with serious impetus from senior executives of the company, with funding and transformational empowerment of the middle managers to explore IP and other value creation possibilities, with the board and the executives pumping back profits into new product or IP creation and with the engineers in these companies rallying behind these initiatives.

The change in mindset has to start from colleges. Recently, at the NASSCOM product conclave, when a journalist asked me if the oft stated product-wave has actually started, I told her that one clear sign I would look for will be when a significant portion of graduating engineers look at either starting up by themselves or join a startup. Then this shift is real and based on momentum and perceived value in the opportunities. Lot of efforts are afoot all across. From Nasscom completely moving the focus at the Products Conclave from MNC majors to new completely on startups (this year’s edition had about 500 startups in attendance), to grassroots level startup eco-system movements like HeadStart and Proto, to other industry organizations like ITsAP (in Hyderabad) having a serious initiative to showcase and award good products the March 2010 edition had over 60 startups present). Few leading colleges in the country are now joining the IITs and IIITs in setting up incubation centers. One of the most exciting products to be built in Hyderabad, Notion Ink’s Adam that is touted to compete with apple iPad, is built out of an academic incubation center in Hyderabad. Central government has lot of initiatives like TEPP that promote incubation centers and product innovation. Even state governments like AP are taking a very forward looking approach to innovation and startups with incentives in the just released next version of the state IT policy.

While all this is good, it is still just a very modest beginning. We need the students, engineers and the leaders to completely buy into the need for the industry to majorly shift towards innovation and products. Need a completely change in the mindsets and attitudes. From just getting a high paying job at an MNC or a stint in US to now also look for the exciting challenges that IP and products pose. Work towards the adrenalin rush coming from taking the product to the first customers and onto the world market. From the fulfillment derived from creating a product or technology brand, to ultimately maybe some exciting IPOs and serious money made! This will happen. Initial shoots already sprouting. I was very impressed to be asked to join a pre-placement style talk at IIIT-H this week to talk about the opportunities and excitement in working for startups. I was surprised to find that about 15 engineering colleges in Hyderabad have incubation centers actively promoting student startups. And the participation at the startup events like startup-Saturdays is steadily increasing. I expect this to gather more momentum in the immediate future.

While we work on the student angle, as an industry we also need to encourage engineers in the industry also to think differently. Think value. Think beyond the T&M billing in a services project. Take it a step further to also encourage intra-preneurship. Industry organizations like Nasscom & ITsAP are actively helping in building an ecosystem to support product startups and IP creation. This must be extended to also get the leadership in IT bellwethers to recognize the need for this shift and actively encourage employees towards intra-preneurship. Companies like Google, Yahoo and Progress Software have formal programs that allow exploring new ideas thru to a prototype. These prototypes if successful are often funded to be full-fledged products. The same should be extended even within services companies. This change has to come from the top.

A combination of catching them young- excite students about start-ups, getting mindset change in the engineers in the industry and, rally support from the IT senior leadership to allow intra-preneurship will go a long way in enabling this mindset shift. If few hundred thousand engineers in the Silicon Valley, and probably much less in Israel, can create world class products, imagine what an industry of few million in India can do! Look out for this in the coming years.

The author is MD & VP-Products, Progress Software
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