Nov 10, 2003

On ISTT I wrote about ITES in India

The ITES industry leaders can make a difference if they are thinking about further growth, ready to tackle the emerging challenges in the field from players like Phillipines, China and a whole lot of others. For reasons of Business Continuity and Risk Management Indian ITES segment would also need to slowly become global and maintain data centres across the world

Coming to the HR issue in ITES the situation is quite similar to the pre-Y2K days of the IT services firms. The team sizes are large, the work is monotonous and the average project cycle is long (similarilites with maintenence work)

As soon as organizations can reorient business models to take into account niche outsourcing work and work becomes more project oriented
(shorter projects, more value added , like compiling reserach reports for global research firms, and giving recommendations) more people with high end skills (PhDs, MBAs etc) will move into the operations functions of the ITES sectors.

For example at a payroll outsourcing centre data miners and business analysts would slice and dice and analyse data to come up with recommendations for a new compensation systems based on trend analytics.

The quality of this work will invariably pass on skills to the fresh graduates who do the 'maintenence' version of the job and as companies seek to ramp up their skills with facilities like part time or satellite studies as a buffer for the scarce high end skills they will result in better and higher wages.

While now the work is coming for a cost arbitrage model as soon as these skills become more numerical maybe the very low end data entry and answering calls kind of jobs might migrate to cheaper countries (which has still not happened in the IT services industry, there does happen some amount of gravity :-) their ability to duplicate these kind of skills will be very low (qualitatively or quantitatively)

There will happen some kind of shakeout after this boom, when people who have entered this industry just to make hay while the sun shines, who do not concentrate on quality and customer understanding will go down the way of the hundreds of small time IT firms which vanished mid 2000 ...but they would have created a talent pool from which the bigger players will select and become still bigger.

My Monday morning hopes about the creation of a sustainable industry :-)