Product thinking? Why is it a secret sauce for the IT industry?

By: and |
November 30, 2015 12:27 AM

When Stanley Biwott and Mary Keitany of Kenya signed off as the winners of the New York City Marathon on November 1, all Indians glued to the TV sets must have felt proud—not to mention the spirit of the marathon itself, but to see TCS written all over!

When Stanley Biwott and Mary Keitany of Kenya signed off as the winners of the New York City Marathon on November 1, all Indians glued to the TV sets must have felt proud—not to mention the spirit of the marathon itself, but to see TCS written all over! The IT bell weather stole the global lime light on that day by sponsoring one of the important athletic events of the year. However, it is still not very clear how many in the world really understood what TCS produces—the best guess could possibly be that “it has intelligent computer programmers who code really well”.

In the 90s, when Infosys, TCS and Wipro invented the “Global Delivery Model” of software development and set up off-shore development centres in India to cater to the requirements of overseas clients, the global perception about India changed for the better—no doubt. On the other hand, even after 25 years of this resurgence, Indian IT products are still evasive and there are strong reasons for the same. Though the Indian IT firms were doing cutting edge technology work for multinationals around the world, they never got to work on products end-to-end from conception to marketing and selling.

A key determinant of the location of product development activities in software is the location of the user. It is well established by many researchers that whenever a firm is not near to the users and the target market, it is difficult to conceptualise the features and functionalities of the product comprehensively and incorporate them into the product architecture. Hence, though the IT and business process management (IT-BPM) services sector has come a long way, contributing to about $130 billion in revenue, about 9.5% of country’s GDP, 40% of the total exports and growing at 2x in the last 5 years, we are yet to see a branded IT products coming out of India.

However, today, another revolution is in the offing and that of the startups in the IT sector. Graduates from countries premier institutes are no longer joining the organised large companies or multinationals, but prefer to join the fledgling start-ups. These startups, in contrary to the large IT services companies that focussed on exports, address local markets; even hyper-local ones and typically offer business-to-consumer services. Most of these startups have built platforms that connect sellers, hotels, hospitals, restaurants, drivers on one side with buyers, travellers, patients, foodies, and passengers on the other side. Hence these start-ups face the market and hence need to build products and solutions that centrally address its needs.

On a different note, the technology landscape has also changed dramatically in recent years: computers to mobiles, proprietary software to semi/ non-proprietary software, products to platforms, services to solutions, integrated to modular, and monolithic to apps. Time to market has also shrunk considerably. It takes only hours of

intense programming to build an app and push it into app stores to be downloaded by the millions which used to take years. In tune with these trends, the pressure on time to market products also has shrunk considerably, from years to months.

The moot question is: are we developing our engineering and management talents to align with the above trends? In services industry, engineers work on specified requirements to meet the needs of a single customer. However, products need to meet the needs if multitudes of customers. Hence we need engineers and managers, who can think algorithmically and abstract out requirements;

venture into the field and understand the real market needs; encapsulate them in to technical solutions; go out and sell these solutions; and scale up adoption.

Though Bangalore is ranked as No. 15 in Global Start-up Ecosystem Ranking (Compass, 2015), it ranks very low in grounds-up innovation or building the right talent for this revolution. Even among the start-ups, the failure rate is high (97%) as they attempt to scale a business before actual product/market fit, which is representative of the deeper challenges.

Realising these, industry associations such as Nasscom and iSpirit have started advocating product thinking, marketing and management. Companies such as Infosys have started bringing their engineers upto the mark on product thinking with training programmes from universities such as Stanford.

The IT industry is home to about 3.5 million engineers and professionals. Until now, the institutes have produced engineers who can program, though to be retrained substantially at firms to suit their specific project requirements. Now, we need engineers who can be innovative, solutions focussed, and create products that fit the market needs.

Digital products and platforms can help reduce inefficiencies in markets, overcome infrastructure bottlenecks, enable smart functioning of governments and cities, digitise corporations, and most importantly improve quality of life of our citizens. It is time that academic institutions and professional training agencies bridge the gap in product development capability to realise the vision of “Make in India”.

V Sridhar is professor, IIIT-Bangalore; Pradeep Nair is co-founder and CEO, Confianzys

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