Rail poll to collect techies’ inputs

The Southern Railway and Technopark authorities are jointly conducting a survey among techies on how to develop the nearby Kazhakuttam railway station.

“One of our major demands is to allow stops for more trains at Kazhakuttam railway station,” said Mr. Binu Shankar, chief executive officer, Group of Technology Companies (GTech). “Once that happens more techies will travel in trains and this would prompt the Technopark companies to invest in developing the station, which now lacks even basic amenities.”

An e-form is being circulated among employees of all Technopark firms seeking their inputs on various issues including trains they would prefer to have stops at Kazhakuttam and the facilities they expect.

The survey also seeks the opinion of techies on opening an unreserved ticketing counter at the Technopark premises.

“Based on these inputs, the railway authorities would be chalking out various proposals on allowing stops to more trains at Kazhakuttam and setting up more facilities at the railway station,” said Mr. Binu.

The Thiruvananthapuram divisional railway manager, Mr. Rajesh Agrawal, and representatives of leading Technopark firms, including Infosys, UST Global, IBS, TCS and Nest, had a meeting last month on jointly developing the railway station.

A demand for naming the station as Kazhakuttam-Technopark is also pending.

At present, only a few passenger trains and one express train are stopping at the station. The station lacks basic amenities and does not even have a full-fledged ticket counter.

Philippines is a wake-up call for Indian IT industry'

Thiruvananthapuram, Dec 8:

The Philippines emerging as the most-preferred destination for voice-based BPO destination is a wake-up call for the larger Indian BPO sector, says Mr V. K. Mathews, Executive Chairman, IBS Group.

The Business Processing Association of the Philippines (BPAP) had declared recently that its call centre business had grown over 20 per cent in 2010 to overtake India.

COST ARBITRAGE

Speaking to The Hindu Group of newspapers here, Mr Mathews said the Indian IT industry could not afford to sit back and presume that the ‘cost arbitrage' would continue to sustain its leadership in the non-voice BPO sector.

In fact, this could well prove its undoing given that year-on-year salary increase of approximately 8-10 per cent is fuelling wage inflation.

This could erode the level of cost arbitrage over time, and it would cease to be the key factor in decision-making process with respect to offshoring.

Mr Mathews is a member of the Executive Council National Association of Software and Service Companies (Nasscom), representing the first and only company registered in Kerala.

INVESTOR INTERTIA

With billing rates under pressure, there's evidence of investor resistance building in tandem with the overall poor business sentiment.

The enthusiasm about the Indian IT story too seems to be on the wane.

These are not welcome signs for the industry. It's here that IT products companies make a difference. They represent a manifestation of the non-linear growth model.

(Linear growth is referred to a model in which the more the number of people working, the more is revenue expected.)

GROWTH TARGET

The Nasscom Executive Council has been discussing how to push the non-linear model. Asked if this would get reflected in lesser hires/recruitment, Mr Mathews said that need not necessarily be the case.

“We'll continue to recruit, but we'll also ensure that the revenue per employee goes up.”

He said the downgrading of the euro zone, if and when it occurs, could impact the industry.

But he hastened to clarify that the Nasscom projection for 16-18 per cent growth in IT exports for this year has factored in this possibility.

IT sector prepares to move up value chain

With India losing the top slot in voice- based Business Process Outsourcing (BPO) to the Philippines, the domestic IT sector is gearing up to reinvent itself. The National Association of Software and Service Companies (NASSCOM) is spearheading the reorientation drive with the focus on innovation and enhanced employee output.

Talking to The Hindu here on Thursday, V.K. Mathews, executive council member of NASSCOM and chairman, IBS Group, said the stiff competition from aggressive rivals across the world was forcing the domestic IT industry to take a relook at its approach to business. The changes, he hinted, could include retraining the workforce to maximise output with focus on value- added products and services.

The Business Processing Association of the Philippines (BPAP) had declared recently that its call centre business had grown over 20 per cent in 2010, to overtake India.

Mr. Mathews said Indian IT companies could no longer afford an employee intake corresponding to growth. “With wage increase and inflation adding to the cost of IT employment, it has become imperative to increase the value and revenue output per employee. We have to move up the value chain.”

Highlighting the need to provide better services and products, he said it was important to understand customer needs and come up with a business innovation approach.

“The Indian IT sector evolved from body shopping to projects to ODCs. But we are still at the low end of the value chain. We do only what we are told to do. This has to change. We need an innovative approach based on value enhancement that appeals to the customer.”

Value addition, he said, would obviate the need to increase headcount corresponding to business growth. Asked whether this would lead to a reduction in employee intake, he said, “We can continue recruiting as long as there is need for recruitment. We need to grow in value rather than just numbers. In the BPO sector, we have already lost, because of rising costs. We cannot maintain the cost advantage in a globally connected economy”.

Mr. Mathews, who is also vice-chairman of the State council, CII (Confederation of Indian Industry) and chairman of GTECH, the industry body for software companies in Kerala, said the Indian IT industry would have to utilise people better if it was to maintain the momentum of growth. “We need to be innovative. One way of innovation is to promote entrepreneurship.”

Sticking to a success formula, he said, takes the excitement out of the industry. “Our IT service model is driven to death. That is responsible for the lack of excitement. Even for executives, the excitement is gone out, they are bored of doing the same thing. They have to be able to do something they love to do. Innovation and entrepreneurship create excitement”.

Mr. Mathews said entrepreneurship and mentorship were crucial for India's transformation. NASSCOM, he said, had promised to mentor 50 outstanding Akshaya entrepreneurs in Kerala. “Entrepreneurship cannot be taught in a classroom. Nine out of 10 attempts will fail. Society has to be more forgiving. Failure has to be seen as a step to success.”

He said the Eurozone crisis could impact on IT spending in India if it extended over a period of time. He, however, termed the NASSCOM forecast of 17 to 18 per cent growth as realistic.

Terming the government decision to scrap the STPI scheme as a disaster, Mr. Mathews stressed the need for a more supportive tax and regulatory framework for the IT sector. The government, he said, has to take an industry-friendly view and allow the sector to grow.

Nasscom to take up mentoring of IT units in Kerala

Thiruvananthapuram, Dec. 9:

The Kerala Regional Chapter of the National Association for Software and Service Companies (Nasscom) will promote mentoring and entrepreneurship in the State's IT sector.

The risk-averse nature of people coupled with the public resistance to accept failure have conspired to nix entrepreneurial initiatives in the State, says Mr V. K. Mathews, Member of the Executive council of Nasscom.

FORBEARANCE NEEDED

Society has to be more forgiving. Failure has to be seen as a step to success, he said while speaking here to The Hindu Group of Publications.

Entrepreneurship cannot be taught in a classroom. Nine out of 10 attempts will fail. But entrepreneurship and mentorship are vital for industry transformation.

Mr Mathews is the Executive Chairman of the IBS Group, Vice-Chairman of the State Council of the Confederation of Indian Industry (CII) and Chairman of GTECH (group of Technology Companies), the industry body for software companies in the State.

The Nasscom Regional Chapter has decided to take head-on the challenges on this front by meaningful intervention in the grassroots Akshaya e-services delivery model.

UNIQUE MODEL

Describing Akshaya as a unique Government-to-Citizen (G2C) interface, Mr Mathews said 50 best performing Akshaya units in the State would be selected for mentoring at the hands of Nasscom.

Mentoring would help these units to firm up business plans, chart out a course for revenue growth, access technologies and even arrange finances, Mr Mathews said.

This would lead to ‘better conversions' at the entrepreneurial end.

The local chapter of TiE (The Indus Entrepreneurs) is also engaged in a similar exercise aimed generating deployable business plans and models through a contest.

VALUE CHAIN

Giving a historical perspective, he said he Indian IT sector evolved from the body shopping concept to hosting offshore development centres.

“But we are still at the low end of the value chain. We are order takers. This has to change. We need to home in on a fresh new strategy driven by value-addition,” he said.

We need to be innovative. One way of innovation is to promote entrepreneurship. Sticking to a success formula takes the excitement out of the industry, he added.