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Share of high-end IT workers zooms to 26%: Nasscom-McKinsey study

Kanchana Suggu in Bombay

The allegation has been disproved and the myth challenged.

Jason Pontin, Ashok Soota, Pawan Nigam and many others may not have thought very highly of the quality of India's infotech journey so far, but the Nasscom-McKinsey report had a surprise in store.

Here's what they found out.

The share of high-end software workers has grown substantially, the report said. In 1997-1998, the share of high-end Internet applications of the top five listed companies was 5 per cent. In 1999-2000, the figure has gone up to 26 per cent.

"Deep domain expertise is critical. The business model adopted by the leaders in the market has changed. The best companies are now concentrating on front-end skills and vertical domain expertise," Ramesh Venkatraman of McKinsey announced at Nasscom 2001.

"Forty to fifty per cent of the top-tier companies are concentrating on project work and this number will surely increase. The trend is surely towards CRM, data warehousing and package implementation. Strategic work is surely on the rise," Venkatraman told rediff.com.

The McKinsey report also revealed that there are a lot of new growth areas emerging and companies are now concentrating on building world-class organisations and going in for a prime contractual role.

Acknowledging that in the last few months, several projects have been put on hold owing to the US economy slowdown, the wave of IT spending driven by enterprise resource planning has started to taper off.

"Companies have started thinking of themselves as global players and are now slowly getting in mergers and acquisitions," Venkatraman said.

The report said that foreign companies that have been exposed to India and understand the Indian business model are going to increase their outsourcing and their IT budget would increase by 4-5 per cent.

"The Indian IT industry is well established abroad. Lot of companies abroad are asking how they can use the Indian software services," Venkatraman said.

He said that the US economy downturn is now beginning to precipitate into outsourcing which they never considered earlier. "In the next two years, lot of people will begin ramping up their offshore activities," Venkatraman said.

The report said that 15 months ago, intellectual work was not really contemplated in India. But today there is a migration from low-end work and people are looking at much more complex tasks.

"Today, India looks like what Israel looked like some time back. A new wave of IT service opportunities are breaking," Venkatraman said.

Pramath Sinha of McKinsey said that India has made a substantial progress in the telecom industry.

Warning that China poses a huge threat to India, Sinha said that there is a great need for telecom regulation, creating a talent pool and stimulating an environment rich with ideas in India.

SEE ALSO:

Nasscom 2001: The complete coverage

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