Mar 3, 2003

On IT Services firms trying to become IT Consulting firms:

You know Mahesh, and others,

It makes me wonder sometimes why Indian IT services firms bother
about paying lip-service to the concept of "rising up the value
chain" especially now that people like Accenture are coming down the
value chain and competing in their own backyard.

Last year, I was with one of the top 4 Indian IT firms and we
started talking about this mythical journey of "becoming an IT
consulting firm" (for those interested in mythology, this sounds
suspiciously like the archetype of 'the hero's
journey' ...somethings in our collective unconscious, I guess ;-
) ....we did a series of focus groups in the firm trying to figure
out the issues and why should we be doing it in the first place...

The biggest challenges for an India Inc IT firm as it makes the
transition from services to consulting are:

1. Dealing with uncertainity : Typically most s/w engineers deal
with a fixed URD (User Requirement Document) that is signed off by
the client and is almost like a line written in stone, and if there
are changes to that the client pays or your BM takes the decision on
that...but the challenge for consulting is that you need to evolve
the same after dealing with a lot of fuzziness and
uncertainity....not a strong point with techies (sorry for the
generalisation ;-)

2. Domain expertise: Typically, the chasm of domain expertise has
been sought to be overcoming by the process of taking in senior guys
from the consulting firms ...but this does not help in reducing the
gap between the techie PLs/PMs and these newly recruited Engagement
Managers (or whatever they are called)...while the company hopes
that some learning will happen when a project is obtained...

3. The mindset: Most IT services professionals/firms operate with
the 'supplier' mindset, and this colors all their interactions with
the clients. Changing this mindset to that of an 'expert'
or 'partner/collaborator' is the biggest these mindsets
are not just in the minds of people....they are codified in the
processes and systems of these firms...and undoing that is an uphill

So the question was, does it make sense to rise up the value
chain...and the answer was yes...

It wasn't 'yes' because of the usual reason ....which is more $/hour
kind of argument that your strategy firms trot out...

As one PM said "If I become an IT consultant to a big Fortune 10
client, it gives me immense leverage and influence to ensure that
normal maintenance/ERP/development work flows into our company"

So there, they want to rise higher so that they can grow bigger
lower down ;-))