Video: Small business IT spending predicted to reach $600b this year
A major irreversible shake-up is taking place in the IT services employment landscape in India that will have a big effect on how employees begin to size up their available options for the future.
The industry has gone through a tough few years, weathering the onslaught of a fundamental shift in their business model -- where the once-lucrative, bread-and-butter business of infrastructure maintenance and application development has been turned upside down and commoditized by the shift to digital and the advent of robotic process automation. These are now doing much of the low-end work for the industry. Plus, US President Donald Trump's onslaught against the H-1B visas has further imperiled their hopes for cushy overseas assignments that have often been the gateway to green cards and a better life in the West.
The change has come so fast, and businesses have remained so obdurate in their focus on milking the very last drop from the old model instead of correcting course (only 25 percent of their business today is originating from digital) that they have almost willed their growth rates to plummet.
One of the big casualties of this shifting landscape has been the fate of IT services employees. From entry level workers who have been replaced by robots to mid-level and senior managers whose skills have become suddenly and seriously become outdated by design-thinking prerogatives, these folk hav found themselves out of jobs while saddled with mortgages and an uncertain future.
The numbers speak for themselves. According to industry body Nasscom, the IT industry created around 170,000 new jobs in 2017, slipped to 150,000 in 2018, and is expected to fall to 100,000 next year.
Yet, there is a silver lining in this story and that is the rise of the global in-house centers. GICs in India added around 110,000 to 140,000 bodies to the workforce in 2018 versus 60,000 to 80,000 in the previous year.
These GICs generated approximately $23 billion in revenue annually, and some of these corporates -- like Standard Chartered, US-home improvement chain Lowe's, and oil corporate Shell -- have said that they will almost certainly boost their ranks by almost double.
Apart from the simple rationale of lower costs, there is another very good reason for this shift. "Technology is getting more complex... MNCs want their critical functions to stay in-house rather than outsource them," says Preeti Anand, director and practice head of engineering excellence at Zinnov.
The once sleepy, green city of Bangalore that has now grown into a traffic-snarled mess of some 30 million people that gave birth to the IT services boom has also predictably become home to GICs. Around 35 percent of the 1,500 GICs and 41 percent of the approximately one million GIC employees call the city home, according to consulting outfit Zinnov, with Delhi a distant second at 15 percent. The big difference, says the Times of India, is that other cities focus on the usual business process management functionalities, while Bangalore handles the more complex R&D work, with almost half of the city's workforce doing so.
So, for now, Indian techies can take some solace in the fact that while their world has been turned upside down in traumatic fashion in the past few years, this has been offset to some extent by another burgeoning industry that they can migrate to.
Until, of course, the next disruption appears on the horizon.
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