Subba’s Serendipitous moments

April 18, 2008

Wave 3 model for Indian IT service providers

Filed under: Business,India,Strategy — Subbaraman Iyer @ 4:59 pm
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Sudhakar Ram of Mastek writes an interesting perspective on the growth options for Indian IT service providers here.

While I agree with his basic premise that most shifts are non-linear, and that they follow the S-Curve, it is not clear what the Wave 3 work would be! He just characterized that as strategic, value-added and non-linear. The examples that he gives — frameworks, components etc. don’t lend themselves to easy monetization. And I guess, that’s one aspect of the dilemma.

The other aspect of the dilemma is that some of the Indian IT service providers did attempt to move up the value chain by providing consulting services. Companies like Infosys and Satyam went that route only to discover that there are critical tensions between managing a IT service outfit and a consulting fit under the same umbrella. The measurement metrics like productivity, bill rates, price realization, competitive positioning done typically by the IT service provider cannot be applied in the same way to consulting. The net result has been that most of the standalone consulting teams in these companies have more or less disappeared.

Hence while there’s an opportunity and a business imperative to move to Wave 3, I am not sure whether the Indian IT service providers can overcome the execution handicaps.

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