Guest Post: Navin Jaganathan on “India’s IT Companies”

A guest post from Naveen Jaganathan marks the return of this blog from vacation.

R.A. Mashelkar once said “Even if India does not do anything it is inevitable that we will emerge as the knowledge power in the next 5-10 years. If you look at our successes in the past and our emergence in the field of software technology, then this is fairly clear”.

It didn’t appear a tiny bit clear of how India will emerge as the “knowledge power” when I read this way back in 2003. Only thing that was happening then was, India was getting lot of call center/BPO work along with some outsourced IT work. If this is to be dubbed as “knowledge power”, it is not clear what the benefits of becoming one are. If all Indian kids who are playing gully cricket start to play tennis will we be called “Tennis Power” even though none of us even qualify to Grand slams?

Why is everybody tooting the “IT super power” horn over the past few years? It is simply because we could not do anything great in the Manufacturing/Industries sector and bring development to the country. Stephen Roach, the chief economist at Morgan Stanley, after traveling on Indian roads sighs like any other westerner: “A journey to Pune, 115 miles southeast of Mumbai .. by road.. I had been told that the Mumbai-Pune expressway is a modern construction. I would rank the six-lane, barely-divided Mumbai-Pune expressway a B-minus, at best. The exit experience was even worse than the approach — a tedious drive on low-quality local roads — overall, a driving experience that left me exhausted, head spinning, and with a sore back. If this is progress in closing India’s infrastructure gap, the problem is even worse than I had imagined.” On another occasion, “India’s infrastructure gap is almost beyond comprehension — inadequate roads, deficient power supply and transmission facilities, and not one good airport in the entire country.”

The India Infrastructure Report 2004 says it all, “…even relative to our income, our failure in water, roads, sanitation, schooling, and electricity is woeful.” The industry/manufacturing sector does not look promising in India as infrastructure is below par which holds back supply chain management and delivery capabilities and doesn’t encourage FDIs. For example, India did not seem to have taken advantage of the post WTO quota regime in textiles. We lost a great opportunity whereas Chinese geared up for it by transforming Dongguan. One of the trade fairs held in the Chinese province seemed to have drawn 30,000 professional buyers!! Because of pathetic growth in the Indian manufacturing sector, the job growth in the sector is just 2% per annum over the decade.

Thanks to high yield crops, Agriculture is doing good enough to meet internal demands). But with fickle monsoons and an exponentially growing population (which pushes the internal demand), this sector is not likely to take India to any great heights.

With manufacturing and agriculture not presenting a rosy picture, all jumped to the IT/Knowledge power bandwagon. Let us go straight to IT/Services work, which seems to be our strength and certainly is the tight rope on which our GDP growth seems to be walking nowadays.

As the fruit (IT industry) gets bigger and older, it has started to rot. Any doubt? Take two whiffs of the reek, please.

  1. A big company slashes pay for reasons unknown and shrugs off the massive outrage.
  2. CEO of a famous billion dollar IT firm bullshits “IT pros earn handsome salaries, they should be taxed more to improve the infrastructure of Bangalore” and does not bother about these sensible queries.

The two most insensible things that are happening now in most Indian Software companies are Forced Ranking (Appraisals) and Process (CMM) stuff.

Apprisals – In one of the leading companies, there are SET percentages for each ranking. “10% (for eg) should be given top rating of 5 (on a scale of 5) , 40% should be rated 4 and 40% rated 3 and 10% rated 2”. I can’t understand how they argue that only 10% are top performers. What if more than 10% are top performers? Is that not possible? In addition, how are they agreeing that 10% of the company is low performers? Aren’t they ashamed of this? Guess what the folks who got a low rating do? They mostly switch to one or other big companies and those big companies think they are hiring the top 5%“. This forced ranking is a shameful copy from GE which had different intentions behind the implementation

Process – The main idea behind Indian IT companies going for Process certifications (CMM etc) seems to be to woo customers and not to enhance quality. There is not enough tailoring of the standards mentioned and on most occasions, it presents itself as a pain rather than as a facilitator to quality. I wonder why Indian vendors alone go for this and not the foreign counterparts. Google, Yahoo, IBM etc do not seem to have this.

Then there are other debaucheries like the bonds for not leaving the company, haphazard promotions etc. Other dishonorable thing is the implementation of social activities, the only reason for these seems to be to get the PCMM and hog some limelight in the media. Of course there are exceptions to this like Infosys who generously gave 5 crores to the Tsunami from its own pocket where as other Indian IT companies where busy setting up the intranet page to enable the employee to login and donate from his salary. Some companies take advantage of the huge number of freshers who come out each year and employee them for cheap salaries. There are other malpractices like employ a guy and take in only his part of his previous experience, the guy only gets to know when he gets confirmed an year after and doesn’t get a deserved promotion. Then they try all tricks possible with the salary structure with terms like “Cost To Company” etc. These tricks may seem silly to talk about but when we think on the broader scale, it just appalling. An entire nation is (wrongly) pinning hopes on few Indian Software companies who by involving in hoodwinks is not likely to shape anything. If all the companies are short sighted to just look at their margins/ balance sheet without any ear to all the stakeholders’ expectations, it is not going to hold for too long. Its this shortsightedness that is keeping Indian companies transforming themselves into a Google (35 billion market cap with just 3500 employees), a Yahoo, a Microsoft etc.

You might be in a third world country if you don’t believe in Abraham Lincoln’s quotes – “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time”



Categories: Guest Post

26 replies

  1. Rajesh Jain in his website Emergic. org had quoted a similar study from Economist and I started off a debate at this link:”http://emergic.org/mtbin/mt-comments.cgi?entry_id=11281″.
    The fact is that this post effectively spoils the party. Indians need “feel good” factor to believe that they are “world leaders” in IT.
    My questions to them:
    1) Why hasnt Infy really ushered in cheap software in India? They are happy to serve the foreign clients rather than serve Indians. I mean, they havent really invested in Indian Operating System or perhaps improved version of Linux or something.
    2) Most of these firms employ people from outside Karnataka. Infrastructure woes apart, they havent done any good to the local economy, except perhaps raise the inflation rate.
    3) Why do they avoid paying taxes?
    4) Could we see less of NASSCOM and it’s face Kiran karnik? Frankly it irritates me to no extent when they mouth “projections” and “billions of dollars pouring in this country”
    5) We need manufacturing. I am not an economist, but I believe that real strength of Economy is measured by the manufacturing or infrastructure sector. Please tell me if I am wrong there.
    Let’s hope that better sense prevails.

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  2. Dr Puri,

    Nobody can deny manufacturing has to kick in and help the services sector in boosting the GDP growth. Better infra is surely needed else we can’t sustain growth.

    But the fact is, we can’t denouce BPO/IT .. we should only strive to make it better. This post just tells is not that great going now in IT and it has to take a step back and then do differently. Whatever its doing now is not going to take it to great heights.

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  3. It is obvious that this entire article is written by someone who has no idea about the Indian Software Industry and must have written for only two reasons: a) To inflame passions and b) preach to the “India Sucks” choir.

    First of all lies the comparison with Google, Microsoft, Yahoo. These companies all have large offshore development centres in India, which do a lot of their critical work. Also comparing Infosys to these other companies is comparing Apples & Oranges. Infosys is first and foremost software solution company, not a product company. The Googles and Microsofts of the world produce software products and market them. Infosys has only just got into making its own software. It’s primary purpose, as is that of most of the Indian Software industry is to take pre-built products and customise them to their customers’ needs, or to produce specific modules of an already existing product. The Indian IT companies were not formed to produce new Software Products, they fulfill a different purpose, so the comparison is incorrect.

    Second lies the question of CMM certifications. If you have even a basic knowledge of CMM you would understand how important it is to the software development process. As somebody who works in the software industry, I have seen the way IT is developed in American companies like Citibank, and I am not at all surprised that Indian Software companies are currently ruling the roost. Not a single process is followed, even in big banks like CitiBank or in other companies like Amazon.com. These companies all outsourced to Indian companies with very positive results for the simple reason that the Indian companies follow a more professional and formalised process, that works. Also, the only way for Indian companies to prove that they actually have some decent quality is to show already biased foreign clients that they have achieved some level of process.

    Third is the bare-faced lie about only Infy donating any money to the Tsunami Effort. I work for HCL Technologies, and every employee donated one day’s pay to this effort AND THIS WAS MATCHED BY THE COMPANY – http://www.hcltech.com/pdf/HCLTsunamistatement.pdf. And I know of many many software companies that did this.

    Fourth, there is no basis or proof for the ranking methods you claim exist in the Software companies, plus you are making a baseless generalization. Different companies use different methods to evaluate their employees. And in a related note, because offshore development centers are considered part-subsidiaries of the parent company, the ODCs have to comply with some foreign labour standards

    Fifth – “Some companies take advantage of the huge number of freshers who come out each year and employee them for cheap salaries”. This is some sort of crime? I thought it was called free-market econmics, i.e. a glut leads to a fall in wages. Clearly this is just more bias showing.

    Sixth – “An entire nation is (wrongly) pinning hopes on few Indian Software companies who by involving in hoodwinks is not likely to shape anything”. The entire nation is not pinning its hopes on a few software firms. Let’s see some proof of that.
    And I’m wondering where the proof is that these companies are “involving in hoodwinks”? Clearly the Googles and Yahoos and Microsofts of the world, that have dealings with the Indian software companies are blind and stupid.

    Seventh – to reply to the first commenter – I didn’t know it was Infy’s role in life to “usher in cheap software into India”. The reason that Indian software companies are doing well is beacuse they are cheap RELATIVE to their WESTERN COUNTERPARTS. Nobody said they were involved in the discount software business. And there is no demand for an Indian Operating System, thus no supply either.
    “These companies employ people outside Karnataka” – So?
    “Why do they avoid paying taxes?” – They don’t avoid it at all. They have been given tax breaks because they are bringing foreign exchange into the country. They don’t avoid paying tax.

    Finally I don’t understand why everybody engages in this mutual exclusion. Having a good software industry doesn’t mean that we are neglecting manufacturing. Manufacuturing being neglected is nothing new. Second, the people being employed in the software industry will help boost further demand. We need to buy homes, cars, food, clothes. Looks like Manufacturing may have a role to play after all.

    Clearly the author is completely misinformed and has used some anecdotes he may have picked up at the Golf Club. It is a shame that this tripe is passed off as authoritative.

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  4. I totally agree with Vivek. Few extra points:

    Brands: Name one brand from Canada. Australia? New Zealand? Austria?Spain?Portugal? Malaysia? Singapore? The fact that *some* developed countries have brands (because they focus on marketing and hot-air) and original products does not mean that development requires brands and original products. The whining about brands is based on a blind allegiance to the US model of development.

    Roach: Sure, Indian transport infrastructure is horrid, But wait, US has a rail system that “Bulgaria would be ashamed of”, as a recent commentator on peak-oil noted. When the price of oil hits 100$, the US transport infrastructure will be useless, and a liability, because it grew at the expense of rail and waterways, and to support the car and oil lobbies. A lot of sensible people consider it the biggest waste of resources in mankind’s history. Why replicate that model in India? Why not build waterways, given India’s unique geography? Why not build better rail systems? Why blindly follow the US model?

    Knowledge: ISRO (and its funky “idli-eating engineers in polyster pants”, as a Bollywood actor put it) just succesfully completed their 12th successful launch in 12 years. And they did it mostly using indigenouos technology and meagre resources, while the almighty US was trying to block their access to technology left and right. Not only that, ISRO uses space technology in ways no one else does, to provide useful information to farmers and villagers, and improve crop production. Forget software, this is a feat that showcases our power over knowledge. It also showcases our originality, because the kind of knowledge ISRO generates is the kind that the majority of humanity is interested in. And no one is catering to that market.

    Maybe, just maybe, it is possible that development does not involve following the star-spangled banner and its lobbies. Particularly in a post-fossil-fuel century. I was told recently by an environmentalist that “if any country survives the post-oil shock without much disruption, that would be India, because India still has its local economies and local knowledge intact, and Indians are experts in creatively using available resources”. We don’t live on ceasar salads that come from 8000 miles away, and that’s a good thing. Moving to that model is not development, it is craziness.

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  5. Vivek,

    I am not doing “india sucks” campaign, All I am telling is with the present mindset we will get no where.

    Couple of points to you :

    ” I work for HCL Technologies, and every employee donated one day’s pay to this effort AND THIS WAS MATCHED BY THE COMPANY”. I agree 100% companies did this but Infy gave 5 crores on the second day from its pocket not collecting from employees. Thats what I mentioned.

    “Second lies the question of CMM certifications. If you have even a basic knowledge of CMM you would understand how important it is to the software development process” I have involved myself in two successful level 5 assesments for two large organisations and I know how screwed up they are. If process is perfect why our productivity is low and bugs per KLOC remain high ?

    I am afraid you haven’t got my article right.

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  6. Some random observations.

    1) All software is not created equal 😉

    2) Salaries are a simple result of a demand-supply equation. It is as much a law of nature as is gravity, and one cant escape it.

    3) Knowledge superpower ? 😀 How many PhDs did we produce last academic year ? How many were any good ? 😛 How much research was transferred to the industry ?

    4) Process – The main idea behind Indian IT companies going for Process certifications (CMM etc) seems to be to woo customers and not to enhance quality.
    — Are the customers then stupid to go for certifications and not quality ?

    5) If process is perfect why our productivity is low and bugs per KLOC remain high ?
    — I agree, productivity is low, but these are new companies, give them some time. Is there any hard data available on bugs per KLOC for code written in India/abroad ?

    6) Its this shortsightedness that is keeping Indian companies transforming themselves into a Google (35 billion market cap with just 3500 employees), a Yahoo, a Microsoft etc.
    — Do Infy/Tcs etc have a “duty” to develop products ? These people are businessmen, and very shrewd ones at that, they know exactly how to tug at ones nationalistic feelings, how to lobby govts. Indian and foreign.., why should they change a business model that is bringing in loads of cash ? A variety of things in the environment need to be present before one can expect successful product companies. For e.g. how does one generate cash flow for a startup that has a product ? how does one transfer knowledge from the universities to the offices ? If it brings you any solace, most startups by Indians today have some kind of an India connection, so there are products being developed in India today, but this is also a kind of outsourcing model, a little different from the regular product development companies in the US.

    worked for the first company in India to come out with a successul product, a chip

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  7. Navin,
    I think I have got your article completely right. You said Infy paid “out of its pocket” – I just wrote in big capital letters, no less, that the company matched whatever its employees paid. Matched – this means whatever contribution the employee made, the company made one of equal amount. It is you who don’t get me

    Frther most of these software companies are at the forefront of being charitable – their employees regularly give blood, and get involved in social work. All of your allegations are baseless.
    I’m curious – where is this data that says our productivity is low? As for bugs per KLOC, one second you are trashing approved methods of measuring quality and processes (CMM) the next minute you are quoting one of its measuring statistics

    Finally – also about infratructure – I ride the New York Subway on a daily basis – it is as dirty and filthy as any railway in India. The subway stations smell of urine, there are rats wandering around the tracks, the trains are slow and rickety, and frequently have to stop in the middle of the tunnels for no apparent reason other than faulty signals. Water is running onto the tracks. 4 Trains heading in to Manhattan had to be stopped because water had leaked onto the electrical circuitry in one of the stations. This is New York – “the Capital of the World”. If they can’t get it right, it’s obviously going to take India some more time – but just as a side note, which won’t matter to india-haters like you and Atanu, the Delhi Metro beats the shit out of the New Tork subway in terms of cleanliness and reliability. But that statement is simply falling on deaf ears.

    My whole response is a waste of time – I had been previously told by many people that Deeshaa.org is just a site which wants to put down everything about India, and not mention anything positive, and this has been proved true by all that I have seen. So all of my reasoned arguments are a waste of time here.

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  8. Navin – Excellent article. Brilliant job and straight talk.

    Uspeed & Dr Puri – Thanks for bringing in some valueable points.

    Vivek – I too think you have got the article a bit skewdly. Let me take a stab too

    From Navin’s article
    ” OF COURSE THERE ARE EXCEPTIONS to this like Infosys who generously gave 5 crores to the Tsunami from its own pocket”. So he clearly says there are exceptiosn and HCL is one of them. Glad to hear that HCL also contributed from its pocket but not many companies did to my knowledge.

    You crib of NY subway. I agree having had to go thru it many times. But India has serious problems like

    1. There is no electricity, no television and no transport for many villages still.
    http://specials.rediff.com/election/2005/feb/01sld2.htm
    http://www.rediff.com/news/1999/jul/08dilip.htm

    2. Roads, ports & airports are very bad comparatively. Roach is not a fool to find fault with india and praise china. He has no reasons to. He is just putting plain facts across. I know its hard on some of us to accept it.

    3. There are global reports on Infrastructure (like the network readiness etc) where india has a dismal place.

    then there is huge argument on CMM (and related process activities)

    I agree there are some places where it has clicked and worked well.
    But on the whole the implementation is very shaddy. I kinda agree that Indian companies going for CMM is to woo customers than to really improve process.

    Somebody asked “— Are the customers then stupid to go for certifications and not quality ?”

    IBM, SAP, Accenture, Bearing point, E&Y all have been in services business for decades in US and Europe and have more clients than indian counterparts. How come they operated without CMM all this while ? ( I guess after coming to India they are also going for certifications to annul the indian companies advantage). Again here there are exceptions among Indian IT companies which are doing it well whereas majority for namesake. The point is not to blame CMM but to blame Indian comapnies shaddy implementation..

    vivek said ”
    Also comparing Infosys to these other companies is comparing Apples & Oranges “. I think the author didnot compare but is simply asking the question “why India has not produced such a jewel”.

    I also urge u to read “Silicon valley or coolie valley”
    in.rediff.com/money/2004/mar/03guest1.htm

    Finally, myheartfelt wishes to the author whose keen thinking is amazing. The points are subtle but may end up shaping our destiny.

    Go On …. You Rock

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  9. Vivek, you put “reasonable arguments” in place. And how does criticising India makes us anti nationals?

    The fact is that ordinary citizens have no role in dictating the policies that affect him finally. If India is the “worlds largest democracy”, why there is no ways and means to make the elected representatives accountable for the period of time they are in power?

    Coming back to IT debate per se, employing people from outside the state has it’s own disadvantages. With the locals getting the boot becuase of lack of oppurtunities, this remains a contentious issue indeed. I did read Sudha Murty’s musings in some glorified columns where she talks of giving computers to local schools, old used ones at that. Fair. How is that really going to help in the rural hinterlands of Karnataka? For that proper manpower training is needed. Electricity to run the systems and perhaps Internet connectivity for making it more useful.

    I d agree with Navin that IT as an industry needs to have a re look. The change can only come from people working inside the industry. Whether one has to get on the path of innovation or rehash the code to make something new. If Google and Yahoo remains your benchmark to justify that great deal or work is going, one has to realise that Google is Microsoft devil personified minus the ugly press. Yahoo is getting its Mojo back( term courtesy Mr Om Malik); yet it doesn’t really impress me.

    For one and all, the benefits should percolate down to Indians. Infy hasnt made any earth shattering investment in say Linux or associated itself with Open Source. They are happy to serve the foreigners.

    Finally Vivek, I respect your “passions for motherland”. Deesha is no India basher and as far as I believe, Atanu Dey is equally concerned for this country. For that matter Navin. There is no slur here on motherland. Plus, tax free incomes get in the way of election campaigns to elect those same bastards who remain these companies stooges. Tax breaks, even if the “foreign exchange” is coming is a crime. As responsible “corporates” how can they escape the liability? Duh…I dont understand that.

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  10. “Dr.” Puri,
    The reason ordinary citizens have no way of holding stupid polictians in power is their own fault, and you are a living example of it. Instead of spending your life day in and day out holding these people responsible you would rather go after a software company that makes India world famous – in what part of the world is receiving tax breaks a crime? And if you knew anything about economics or even history, you would understand that India needed to increase its foreign exchange reserves. But obviously these points are beyond you.
    And I never equated Infy with Yahoo and Microsoft, it was the author in the article who did. If you could understand even one word of english, you would see that the point I am making is that Yahoo and Microsoft are NOT the benchmarks to take. It’s amazing. You and Navin both don’t know how to read English!

    “…she talks of giving computers to local schools, old used ones at that. Fair. How is that really going to help in the rural hinterlands of Karnataka?”

    It is not going to help the rural hinterlands of Karnataka. But does it mean that just because somebody is donating computers that somebody else cannot also set up electricity, roads and water? Where is all this mutual exclusivity coming from? Again, no evidence to back up your broad sweeping statements. Just some silly pessimism you have been brought up with.

    “employing people from outside the state has it’s own disadvantages. With the locals getting the boot becuase of lack of oppurtunities”
    I don’t see you give a single shred of evidence that locals have been given the “boot”. Maybe people are being hired from outside Karnataka because there aren’t enough qualified people within Karnataka. And I have yet to see one frustrated software engineer in Karnataka complaining that his job was given to somebody else. Finally, it is simple fundamental economics that Labour Mobility is a good thing.

    “They are happy to serve the foreigners”.
    No they serve lots of Indians too. My company has a contract with the Karnataka Water Board, TCS has a lot dealings with the Government, Municpal Corporation of Delhi has computerised its offices through another software company, the government of Rajasthan is computerising through TCS or HCL depending on who wins the tender. This just shows how little you know about anything.

    HOWEVER, even if the above examples were not true, the Software Companies would stil serving quite a few indians – they would be serving their shareholders – most are Indian and their Employees – most are Indian.

    It is people like you who hold our country back. Why should Infosys invest in Linux? Do you even know what Infosys is involved in doing? Do you even know why this would make any business sense? As for Open Source – EVERY Indian Software Company has contributed and participated in the Open Source process, and attempts to use OPen Source software wherever it is feasible, from a business point of view.

    Finally, if all of our software companies are so lousy, why do these Westerners keep coming back? How come I am still in a job? I’m impressed with the amount of swindling I must be doing or “hoodwinks” I must be involved in. All you people are doing, is denouncing something because it is Indian and popular. I have yet to see even an iota of proof, or a citation from even one authoritative source in this whole article. Some fool with a Morgan Stanley e-mail address writes something, and another fool puts it up. And this makes it all credible? This is why our country fails. Because none of you want to use your brains, or think independently. You are all just waiting to denounce any positive development in India, becuase that is what you are used to doing. You people are the “slur on the Motherland”, not the software companies.

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  11. The american economy is precarious, Manufacturing employment has been slowly but steadily fallen through since beginning of this economic cycle in US. This is especially true with industry.

    I think that next downturn will be day of reckoning in US when people notice that plentiful construction jobs disappear and industry stays off-shore and people have no money to buy services…

    Navin, again a wonderful article. You should probably correlate with US economy and how we can thrive if recession hits there.

    Vivek, We will allow to babble. 🙂

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  12. I saw the following alert on US stocks, if that happens, Indian stocks (IT companies included) will take a good beating :-). It will be interesting to see how they react.

    The Stock Trader’s Almanac has issued an alert – decidedly bearish. “Our outlook calls for the market to return to the area of last October’s lows (Dow at 9750, S&P 500 at 1095 and the Nasdaq Composite at 1903) before moving higher,” says Jeffrey Hirsch, editor of the tome that tracks trends in the stock market. The Nasdaq Composite has already closed at 1904 this year, making it likely that it will fall below 1900 before this correction is over – perhaps back to the August 2004 low of 1750, Hirsch says. “The potential also exists for the Dow, S&P 500 and the rest of the market to break those October 2004 lows.” In other words, according to Hirsch: “Cash is king” right now.

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  13. Your country’s problems may be many,
    but I have only one solution,
    and my difficulty is
    to go on advising the same solution
    for different problems, different situations.
    I don’t care what your problem is,
    because I know I have got only one solution:
    GROW MORE TREES.

    -Modified from an original Osho quote in the book “Passion for the Impossible”

    Your diseases may be many,
    but I have only one medicine,
    and my difficulty is
    to go on selling the same medicine
    for different patients, different diseases.
    I don’t care what your disease is,
    because I know I have got only one medicine:
    meditation.

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  14. I guess Vivek is a newcomer to this blog of Atanu! Ask me who has been following Atanu’s writings for the past two years… Atanu just writes what he feels about “The great Indias systems” and many of us feel he is writing the truth. Puhleeze Vivek (I guess he may be part of the corporate communications dept of the IT company), Please for God’s sake, don’t talk anymore about Indian s/w companies. (We should first rename them “software services companies”). I too am a junior employee of an Indian “IT” company which delivers “complex technological solutions to Fortune 500 clients”. Take my word, everything that was written in articles about Indian IT industry it very true. Quality processes are pathetic and employees are exploited to maximum possible extent. I tend to slap managers who speak about “Open Cultures” without even realising the meaning of such a term. Forced rating is the best word that could be used to term the appraisals. In conclusion, from what I have heard from all my friends who work for all the biggies (Infy, TCS, Wipro, Satyam, CTS etc) All I can say is that this Industry lacks maturity and would be up for a huge collapse in the near future (3 – 5 years is what I can say is the timeframe for this Industry to “live” further).
    Talking about Newyork’s infrastructure makes no sense when we speak about India’s infrastructure. Having a metro in Delhi alone makes us no great nation. The entry point to any Country, be it the air port or the harbour should be worth mentioning. Our metro airports, not even one of them would figure among World’s best 20 airports. Since I live in Chennai, I can speak about Chennai airport. The other day, there was a power cut and the whole air port sank in darkness leaving people in dismay! Little can we expect “A Superpower” to have such excellent airports. We have a lot to make up and move ahead if we want to excel in the next 20 years. Our basic education system is the first culprit. What can you attribute the reason for ever increasing road accidents? The corrupt rotten RTO offices. I totally support the point raised by one person ” why have politicians and a system where we simply don’t know where the money we pay them goes to?”. The citizens on the whole paid around 2000 crores for Education cess. What happened to the money? How can we get information regarding disbursement of that money? Is there any accountability at all??? They generally say “It takes some time for actions to take place in India”. So, I have paid the education cess in 2004 and if that amount is spent in 2025, is it any worthy paying the cess? Our FM made speeches like “I can only give the money. I cannot see how it is spent”. Bull Shit! He must have had the courage to say “I am sure this money would be mishandled. But, I need some fame and name and so am introducing another tax on the burdened salary class” Hail The FM!!! Azim Premji very draingly said “Tax the professionals more and more”. Oh God, a man who made 500 crores as tax free dividend cannot speak any more in public! I agree that it is his hard earned money, but when he speaks of “well paid IT profs” I can very well talk back at him! This is what Indian professionalism is! There is no concern at work! Exploitation is the key word! Please don’t tell me that this is what is followed in the West!!! I keep hearing from my friends abroad (especially in the US) where they respect every person’s personal space whereas for Indian managers, professional space ==== personal space and employee ==== bonded labourer. (I have put more “=” to stress on them!). Until all this and many more improve, we can definitely not be content and call ourselves “Superpower”. Mr. Vivek, please stop being content, because if we are content, we tend to stop working anymore. We may have achieved some foriegn exchange “through forced ratings, bonded labour conditions, fooling the client etc” but we have a long way to go. Professionalism in tandem with accountability is the key word. I too am very much concerned at the sad state of our country with rotten babus and politicians. Let us not be content with the “VERY VERY VERY little” we may have achieved but instead focus on what we could do to make our future a better place to live in.

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  15. It is fruitless to compare IBM/Accenture with an Indian company like Infy because of the difference in age, relative ability to attract capital and so on. Having had some second hand experience with these biggies, my impression is that if anything, development there is even more haphazard as compared to the Indian firms. Perhaps, someone with a more direct experience can give a more reliable opinion.

    Having said that, why exactly are these “shady implementations of processes by Indian companies” in question ? The customers appear to be happy offshoaring their business.. Jab miyan biwi razee to kya karenge Qazi ? 😀

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  16. Forced Ratings, Bonded labour and Fooling the client(not only the client). I think these are the problems.

    CMM and these companies not contributing other than foriegn reserves are not big problems, I think. From Dr. Puri’s writings in this site and in “emergic”, I get the feeling that he wants these companies to contribute to the “growth” of India by writing cheap softwares for Indian needs. These business men(Infy,TCS, Wipro etc..) are here to do business and they do business not for the welfare of the nation, but for their welfare. They are very clear on that. Only we are not clear. The welfare of the nation such as foriegn reserves, people getting jobs etc., comes as a side effect. If we have wonderful robots or softwares that can write highly efficient bug-free programs, then these business men will go for that and lay off all their “engineers” coolly. Wont they? So, it is better not to expect “serving the nation; employing Kannadigas etc” from business men.

    “Shadeful implementation of CMM” etc.. I have no idea what big harm it is. It will also come into the category “fooling the client”.

    I have first hand experince of “fooling the client”. When I was a fresher, I had a very bad impression on the company on seeing what they billed and what I actually did. Finally, when he was completely robbed off, the client woke up.

    Another big problem is sometimes these companies say to the client I have 2+ experience people in this language/platform etc.., I can complete it in 3 months etc.. flat lies and put all freshers in the project and whip them to work day-in and day-out. Dont they do all that?

    The author’s last lines are very true “Cant fool all the ppl all the time”

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  17. Venkat, uspeed & smiley. thanks for your comments. Wonderfully put.

    Uspeed , u ask
    “Having said that, why exactly are these “shady implementations of processes by Indian companies” in question ? The customers appear to be happy offshoaring their business”

    The customers appear to be happy now. Will they ever be happy ?

    Or just because customers are happy now.. should we continue to do this useless thing for ever ? Can the industry sustain ?

    Let me give you a practical example of the “shaddy” implementation.
    (again there are companies which are doing this well. you are lucky if are working in one.)

    Most companies have a SQA (software quality assurance) dept.. (or a similar name). They will have a pool of analysts. They will come to each project and analyse the quality. Here is a typical conversation.

    SQA : Hi, can I look at your Process documents for Project X which got completed last week ?

    Programmer : They are put in the appropriate folder.

    SQA : I dont see a defect log document (or any other doc which hardly serve the purpose)

    Programmer : The deadlines were very tight and we didnot have time to log them.

    SQA : Please understand, we are a CMM5 company and we have to have this documents to derive metrics etc. So I would suggest put in whatever defects that come to your mind and submit it today so that we can “complete” the project in our dept

    NOW, the project is complete.. after this , JUST because its mandatory, he is going to do MEANINGLESS work (of preparing the documents after completing project) and those will trickle down to

    1. False/Spurious metrics
    2. Bad decisions (with bad metrics)

    the whole exercise is a waste ? This is what I meant by shaddy implementation.

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  18. Hi again!
    Very true Navin! You have just said what happend in a Quality Audit!
    Many of the friends here have raised queries like “Why do the client offshore more even though we may say that the quality of work is poor?”. Do we see the clients offshoring to only a particular company? I have heard of the The General guy giving projects in bit and pieces to all the software companies in India, TCS, Wirpo, Infy, Satyam etc and when they find that the quality is coming down they immediately shift to another vendor. This is what comes up in the Annual report as “Client addition or Client loss” for the local companies. Moreover, when an american company gets work done at 1/10th of the cost (if it is done at his place), they wouldn’t mind giving up a few quality parameters. Still, the clients keep forcing the vendor here to do some changes or improve the quality and our vendor here calls it “Change request” and extracts a few more dollars from the client. Americans don’t mind paying a few more dollars. After all, when they save in millions they wouldn’t mind paying a few hundreds or thousands of dollars for getting extra work done. The dollar – rupee exchange is the culprit here!!!! 🙂
    As explained by Navin, Quality audits are just humbugs. There must be audits from clients themselves! Then only will the situation improve. I again and again repeat, It is a long way to go to pronounce India an IT Superpower or A Superpower in general.

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  19. Vivek, thanks for the “sarcastic” comments. Oh by the way it is not “Dr” it is Dr. I am a real one at that!

    Frankly, I wouldnt have contributed more on the “slander” here. I respect your ideas and just because I criticised India or it’s political system doesnt make me anti national. You can jump to your own conclusions but then, there are something called as manners. I am sure that you would know how NOT to speak rudely in public atleast) or talk from your own “high moral ground”.

    I wouldnt have replied to Viveks post; the very fact that he has questioned my love for motherland, I am forced to. Oh yes one thing dude. Please don’t underestimate some one’s learning. The fact is that I am taking pains to understand what software( and economics) is all about to expand my own horizons. Let me “challange” you to come up with discussion on Medicine-any branch at that( Surgeryof course is my favourite). Your choosing. Oh well, you could click on link which goes directly to my BroadbandBlog- a ring side view of Indian Telecom circus.

    Sorry Navin and Sorry Atanu. I cant sit back and let someone abuse me just for the heck of it. I am an Indian and jolly well proud of my Hindu roots too. As for my “english”, I need not be perfect in that buddy. This is a legacy of British.

    Before I end, I had respect for you in the beginning of the post. After you were bent on “abusing” me and Navin for no apparent fault of ours, I think you crossed the lakshman rekha. Oh yes, in the true spirit of discussion, your post wasn’t removed, even though this is defamatory. Think about that.

    As for the FDI, that is not the panacea of all ills. Atanu would be an expert on that. I can only comment if and when he posts anything on that. Perhaps then you would know what I know about it. Okay? But then, I wouldnt be ashamed to accept the fact if I dont know anything. I dont claim to be know all.

    No hard feelings dude. Yet, before posting anything think 10 times before you say out anything in public.

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  20. uspeed said: “jab miya biwi raazi tau karega Qazi”

    Kazi comment karega 😉

    First up Vivek, your first two comments had quite a few points on the target. But you see the moment you start ‘rubbishing’ the author instead of ‘debating’ the content, the full import of your argument is lost.

    Now:
    a) Comparison with Yahoo, Google & other MNCs w.r.t process certification is not only misplaced, but unwarranted. Indian IT industry is predominantly “service oriented”. So they ain’t here to build their own products. If they have to ‘impress’ clients, they need to have something on their mktg brochures. If it got to be certification, so be it. And I do agree that CMM/PCMM stamps are mostly just that. Rubber Stamps. Frm my exp’ce I can safely vouch that almost 75% of the certif’n is an eyewash. Just before the day of audit, dates are changed, dummy data is keyed in, numbers fudged, the works.. to please the auditors. From what I know, all ‘biggies’ have such complicated Quality documentation tools, hidden under long-winding-confusing names just to do that…which will be named something like “Historic Project Data Collection & Metrics”. Ideally the tool would be supposed to collect metrics of projects so that subsequnet projs can be estimated better. But guess what. All data in that DB is a big joke. And no mgr/architect in his right mind ever uses it. Infact the whole SW engg process is still undergoing a lot of research and many ideas are popping up, whereas these tools and processes used for certifications, are stuck up on god knows what. So while many employees hate these processes, but the auditors either don’t realise this hogwash or I suspect are hand-in-glove, when they dole out approvals. By the way, sometime back I read almost 90%+ of world’s CMM5 companies are in Bangalore, and amongst those atleast 50%+ are there present in Bannerghatta Rd itself (!!). But then as uspeed said: “jab miya…da da…da da..Qazi” 🙂

    b) What is so wrong in not developing a ‘worldwide popular product’ or for that matter contributing to openSource. As if you ‘arrive’ in SW industry only if you make opensource sw. I don’t think so. Ask ESR,ask Linus. If openSource was such a good business proposition, there would be no need to ‘evangelise’ it. Here too, there are exceptions. Infy’s Finnacle is going places. then we have the Simputer, the cooldude in Chennai who is doing something with telecom (I forgot his name/product), then these small startups funded by VCs who every now and then come up protocolstack-on-chip and other gizmo stuff (Ittiam comes to mind). I know products has far reach, and more money, but nobody’s interested in doing it. So you just can’t blame em.(If I am happy with my bread-factory, you can’t force cake down my throat) And again if ppl want to develop products, they will jump to some MNC after working initial years in Indian firm. By the way even MNCs like HP/Accenture/IBM/Cognizant are now heavily into services in India. Many times the Indian arm of these MNCs compete with Infy/Wipro/TCS for projects frm their parent firms in US. Guess what? Indian MNCs even lose on discussion table. That’s market for you.

    c) In any industry, one would expect ‘fair’ dealings and all those goodie terms like ‘wealth-sharing’, ‘spreading ownership’ ‘showing a heart’ etc. But again, it’s pure cut-throat competition and supplly-demand equation which decides. My ‘sources’ tell me that there is a big bunch of seniors in Infy waiting for their stocks granted some yrs back to mature. After that all of em are going to exit. But again Infy mgmnt is not sleeping either. They will ‘take care’ of it, when the time comes, by giving hikes, designations…the blaahs. Of course some might leave. Good for them. Some might stay. Good for them too.

    d) The idea of ‘corporate philanthropy’ is at best – not a bad thing. So when Infy sponsors Bangalore police’s Gypsy, it also places ads on it. Wipro places solar-powered traffic lights and puts its logo alongside. That’s PR. Much of it is meant to get a nice word in newspapers (hidden advtsng) rather than a direct ad spend. Very few corporates do true philanthrophy. And in this matter, I find TATAs still stand head-n-shoulders above everyone else — I dealt with BombayHouse some yrs back for a scholarship and they treated me like a prince, even when they rejected my application, coz I was not that poor. They didn’t finish it off with a telephone call or a rejection letter. But they requested us to come to BbayHouse[I even saw RatanTata :)], took a proper session and did sorta counseling for further avenues — So let’s not try to fool ourselves by all this talk. Tsunami and natural disasters are an exception. Almost all companies had this matching donation fund, collecting clothes/medicine etc. If JoS frm NY can donate 5% of his sales proceeds for Tsunami relief,
    it’s quite right that our corporates too do so.

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  21. R.A. Mashelkar once said “Even if India does not do anything it is inevitable that we will emerge as the knowledge power in the next 5-10 years. If you look at our successes in the past and our emergence in the field of software technology, then this is fairly clear”.

    Mashelkar’s comments are clearly way off — India’s software exports are probably 80% of the total IT/ BPO exports of $17 billion, which works out to $14.6 billion. Given that the total size of IT services & software industry worldwide is $600 billion+, it’s time we Indians stop our chest-thumping triumphalism about us being an “IT” or a “knowledge superpower”.

    Another stat: at $44 billion and counting, IBM Global Services, the IT services arm of IBM, which is the relevant comparable to an INFY or a Wipro (not the Yahoo/ Google/ Microsoft — where did that come from?) does about 2 1/2 times the business that ALL of India does. And yes, IBM does have centers in India, but let’s not kid ourselves — they’re still insignificant contributors to that $44 billion.

    That having been said, Naveen’s article was pretty lame.

    There ARE valid objections to Mashelkar’s wild claims (I’d like to think I’ve pointed out one or two) AND India’s infrastructure IS crappy — I come to Chennai every two months, and even though I grew up here, driving (even in the back seat) is an arduous experience.

    However, Naveen’s article is weak on many fronts

    — unjustified claims (“An entire nation is (wrongly) pinning hopes on few Indian Software companies who by involving in hoodwinks is not likely to shape anything”. ).. what sort of hoodwinks, exactly?

    — absolute ignorance of basic economics ” “Some companies take advantage of the huge number of freshers who come out each year and employee them for cheap salaries”. ) Isn’t this how the market is supposed to work? And what basis do you have for this assertion of “taking advantage” and paying “cheap salaries”?

    — non-sequiturs galore… “If all the companies are short sighted to just look at their margins/ balance sheet without any ear to all the stakeholders’ expectations, it is not going to hold for too long. Its this shortsightedness that is keeping Indian companies transforming themselves into a Google (35 billion market cap with just 3500 employees), a Yahoo, a Microsoft etc. “.

    In other words, Yahoo, Google and Microsoft are paragons of corporate virtue? Guess they acted wisely and sagely during the Internet bubble (Yahoo/ Amazon), and took care of ALL stakeholders (Microsoft).

    Atanu — you disappoint me. Think I know where you’re coming from but if you post this sort of stuff, think you’re going to lose credibility.

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  23. Thank you, I just wanted to give a greeting and tell you I enjoyed reading your material.

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