At a time when growth in IT is showing signs of revival, industry leaders are voicing the need to embark upon newer business opportunities like service innovation and intellectual arbitrage. Spearheading the new business bandwagon is R Chandrasekaran, managing director and president (global delivery) of US-based Cognizant Technology Solutions. The global economic meltdown has totally recast the outsourcing business proposition, and customers are increasingly looking for integrated services, where business-aligned technology services ranging from ADM (application development maintenance) to BPO and IT infrastructure can be bundled together with single-point accountability. In an interview with FE?s S Saroj Kumar, Chandrasekaran shares his views on the next course of IT growth following the downturn. Excerpts:
The current Indian IT workforce stands at around 2 million, according to industry leaders. Will the figure reach 3.5 million by 2011?
There are many factors that drive the adoption of IT-structural changes buffeting all sectors of the economy (such as digitisation in the media & entertainment industry, consolidation in the life-sciences industry and regulation in the financial services industry), newer industries taking to global sourcing (such as retail, healthcare, and energy & utilities), newer geographies embracing the global delivery model (such as the emerging markets), and newer services lines (such as BPO/KPO and infrastructure services). All this will result in the continued growth of employment in the IT industry, though the 3.5-million mark looks unlikely by 2011. Nasscom expects the IT sector to grow in the range of 4-7% this fiscal and adds that the industry is likely to see sustainable growth over the next two years to clock revenues of $60-62 billion by 2010-11, whereas earlier, the growth was pegged at $60 billion by 2010. One should also understand that non-linear models are being embraced by IT companies. This means that there will be a decoupling of headcount growth from revenue growth.
What is Cognizant?s perspective on the hiring scenario in the campuses?
Cognizant continues to recruit, based on its business need. In the September 2009 quarter, we saw a net addition of 3,900 professionals and our global headcount reached 68,100. We are now accelerating the intake of fresh graduates from the class of 2009. We are, in fact, bringing in fresh graduates sooner than expected and many of them have already been deployed on projects after their initial training. For the class of 2010, Cognizant commenced recruiting in the third week of November 2009. In the last few weeks, Cognizant has visited over three dozen premier engineering campuses across India. We plan to visit many more in the coming weeks and months. In all, across the campuses that we have visited so far, we have got the first slot, enabling us to select top-notch students from among the best institutions in the country.
What are the company?s hiring numbers in various regions, including tier-I, II and III colleges?
We do not disclose the numbers of campus recruits from B-Schools and engineering institutes. We continue to hire MBAs and engineers from premier campuses in India and elsewhere, based on business needs.
In the aftermath of the downturn will IT remain the largest employer for skill-based job seekers in the country?
IT and global sourcing has not lost any of its sheen and is even more attractive, in the light of what the global economy witnessed in the recent past. The pressure on companies to adjust to the new environment and adopt cost-optimisation initiatives will only benefit global sourcing. This will translate into greater employment opportunities with the IT industry. It also remains one of the fastest growing sectors in the country and this spells great career prospects for students and professionals from varied, and not just technical, backgrounds.
What are your views on course correction in the IT industry?
We believe that the economic crisis has further catalysed the adoption of the global delivery model. Clients are looking to get more done with the same or a lesser budget. However, cost is not the only motivation for outsourcing. It is more about the ?value? that outsourcing delivers. It is true that when contemplating the benefits of global outsourcing, cost savings usually top the list in most organisations, more so during times of economic uncertainty. However, beyond saving money by way of ?labor arbitrage? or improving processes through business process optimisation, the value equation for outsourcing has moved to a new phase of ?intellectual arbitrage?, where the goal has moved beyond simply improving existing outcomes or making them cheaper and has shifted to using global talent to create new outcomes, which were not previously possible. There is also a greater adoption of outcome-based pricing to drive value and innovation. As clients reasingly recognise the business value of the global delivery model, they are taking a more strategic approach to outsourcing. Outsourcing is increasingly about partnering on a global scale to meet strategic goals and win market share. We are seeing a matrix of locations being used to deliver customer value. Further, customers today are looking to tap the right talent wherever it is available. Just like the manufacturing supply chain has gone atomically global, we are now seeing the services value chain going global as well.