Crain's New York Business - 24 January 2011 by Rance E. Crain (Editor)

By Rance E. Crain (Editor)

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Sample text

A joint analysis by Nasscom and McKinsey43 has identified the following four long-term possible scenarios for India’s export-oriented IT industry: • Scenario 1: Offshoring pulls back. The adoption of global sourcing slows down considerably due to protectionism by Western governments, perhaps driven by political pressure through increasing unemployment. Nearshore destinations, which are part of the same economic zone, could be favoured and promoted. com - licensed to Taiwan eBook Consortium - PalgraveConnect - 2011-03-03 In USD billion Intelligent IT Offshoring to India threat of terrorism bringing problems for effective business continuity management (see Chapter 4).

The candidate would then be asked to solve various programming tasks in his domain expertise. On successful completion of this second interview, the project manager in the third room would decide whether to recruit the candidate onto the project. In the year 2009 and in the middle of an economic downturn, this now sounds like a fairytale of a long-forgotten past. Nonetheless, these stories are true and I had the opportunity to witness these market dynamics myself. At that time, I was an (expatriate) project manager in India and hired quite a number of good employees through this channel.

For now, we need to understand more about India’s IT industry, how it has suddenly evolved from nowhere, its current status, and where it is heading in the next few years. India’s IT story Late start in 1991 In 1991, the long running fiscal deficit precipitated an economic crisis in India, the country was de facto bankrupt, and the government was forced to relax controls over the movement of foreign capital. Indian IT firms, led by Infosys, Tata Consultancy Services (TCS), and Wipro, which were beginning to outgrow the limited domestic market, took the opportunity of starting to serve the IT needs of foreign customers by sending their employees as temporary workers to onsite assignments as ‘landed resources’; this business model quickly became known as bodyshopping.

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