Digital change behind IT job growth: The Tribune India

Subir Roy

Senior Economic Analyst

The country’s global IT leaders seem to have turned a challenge into an opportunity. In times of pandemic and lockdowns, the software giants appear to be heading for record hiring in the current fiscal year (2021-22). Since a service provider’s revenue (revenue or revenue) is a multiple of its workforce, hiring seems like a harbinger of a solid revenue year.

Now, as third quarter results for fiscal 2021-22 have just been announced, the headlines will be grabbed by Tata Consultancy, recording eye-catching revenue of $25 billion over the course of calendar year 2021.

According to analysts who track IT leaders, the Big Five (TCS, Infosys, HCL Technologies, Wipro and Tech Mahindra) have hired 83% more this year so far compared to the previous year. The new hire of 150,000 employees leaves behind the previous best figure of 90,000 in 2018-19, which was well before the pandemic hit.

But it’s not like you hire and the gravy comes a few steps behind. Massive hiring by all IT-related sections – like service providers themselves, Indian operations of global companies, start-ups and even companies that want to go digital internally – means that ‘there is a high turnover of staff (grabbing each other) . Infosys’ churn rate went from an already high 20% to 25.5% in a single quarter.

Departures must be compensated by new hires to allow managers to significantly increase remuneration. The resulting overall increase in payroll, the industry’s largest expense item, is likely to put short-term pressure on the bottom line – earned profits.

But the thing is, that’s the beginning of the story. During the pandemic, when working from home became the norm and service providers faced high demand to enable it, they responded to the demand and did more. Along with the current trend of businesses going digital, they are also being helped to migrate to the cloud, not only their data but also their applications. This process is simultaneously propelled by the heavy use of automation by the service provider itself.

The decision by companies to go digital is reflected in analysts’ estimate that Indian IT spending (the sum of all IT budgets) is expected to exceed $100 billion in 2022, for the first time in three years. This means that the pandemic initially caused a setback for businesses, but this has been overcome and the lessons learned in tackling business barriers have opened doors to new ways of doing business with the help of IT. .

Pandemic-induced digital transformation is here to stay, expert says. In the year just beginning, Indian CIOs will capitalize on the new interest in digital technology to survive the pandemic and will request and obtain new budgets to mainstream digital transformation. And as enterprise IT budgets grow, IT service providers will thrive. They are prepared and ready to seize this opportunity with their new hires.

The big step India’s IT service providers need to take to move forward is implicit in what they now offer — a ‘service’. They essentially perform clearly defined tasks and their skill lies in their ability to do so at lower cost with both efficiency of execution and also taking advantage of the lower wages that Indian technicians are willing to work compared to their American counterparts. . Ultimately, they work on a “cost plus” basis.

It now remains for them to engage in consulting, to define the tasks that service providers must carry out. There are two aspects to this. First, IT business consultants need to interact not with the company’s CIO, but with the CEO and his team to see how his business can move forward. Therefore, senior IT company executives must be “domain experts”, i.e. know the business the customer is in, advise the customer on how to move the business forward and develop a business plan to enable this.

The IT part of the job is part of the business plan. It is an indefinite mandate. The more successful IT companies are in designing global business solutions, the more they can create an IT role for themselves. It’s about reaping the benefits of what you have sown. The trick is to sow good seeds. For this, it has become imperative for Indian IT companies to go into consulting as many of the services they have offered so far are being automated. Thus, getting into consulting is becoming a do-or-die proposition for Indian IT companies.

The progress of leading Indian companies into consultancy has so far been fraught with challenges. Infosys acquired Lodestone Management Consultants nearly a decade ago, but that hasn’t transformed India’s IT leader into an equal or consultancy offering. The same goes for the previous acquisition of Axon by HCL Technologies. But instead of becoming a consulting powerhouse, the Indian leader has gone into designing products and platforms. Wipro acquired Capco last year to get into consulting. Tata Consultancy has taken a different path, seeking to develop its consulting skills organically rather than through acquisition. The jury is still out on the bottom two.

Indian IT has historically overcome many challenges. Many quashed it when the tech bubbles burst at the end of the last century, but the year 2000 opportunity came to the rescue. Subsequently, the challenges were overcome one after another. Turning to consultants will mean having to change the DNA. Difficult but not impossible! Wait and watch.

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