India Week – IT Service Companies Chasing Each Other to the Bottom of the Pile

Of all the articles published this week, this is bound to be the one that causes the most controversy and I am going to make no apologies for that. Sometimes even when we don't want to see or hear it we must. One of my former bosses once described me as a "suppository" - one of things that you don't want to take, gut you know it will actually be good for you! So here goes.

From what I have seen both inside and outside India SWITCH as it has been given to me (Satyam, Wipro, Infosys, TCS, Cognizant and HCL), seem along with the other such companies that we will now consider members of SWITCH, appear to be still chasing each other to the bottom of the pile in terms of price cutting. After all much of the Indian IT sector has been predicated on cost. But although cost was the driver 5 or 10 years ago I am not so sure it is now. Even if it was then surely the work that India had done will simply move on to China? In today's world surely value and customer experience are more important? In which case why are we not seeing more of them competing based on these tenets?

The above is one of the reasons that I believe they would do well to consider undertaking some serious BPM thinking for themselves. In some cases it may already be too difficult, the sheer size of the employee base is causing them to act like an oil supertanker. But then, this should be no surprise, as generals through the ages have learned you have to break your forces down into smaller units with good leaders in order to remain agile and flexible, to try and run based on control and policies will not enable that flexibility. Oops, surely not having to deal with the thorny issue of actual organisational change!

Of course most of the SWITCH players will tell you that they have a strategy to move of the value chain, providing more added value services and business consulting services – which I happen to think is the right place for them to go, but for the most part they appear to be trying to get there with the same management approach as a bodyshop contractor – which is not going to work. The salary structure, motivational needs, training and investment needs for running a truly successful consulting practice are different, if you want o succeed then you need to break free from the existing model – remember retain values and rewrite the rules – it applies to us as well as them.

Of those that are doing better there is another question, are they really doing business consulting? From what I hear when they do they are still only looking at the business front end of an IT project with the aim of shipping the IT implementation work back to base. (Please don't write to me with the exceptions, I know there are some out there – we can't have rules if we don't have exceptionsJ)

Some SWITCH players have clearly stated that they are not interested in solving business problems, merely wanting to solve IT problems. On one level this is fine and admirable, on another level why would I want to buy from someone who does not know what business problem I have and can't elaborate how they can help solve it for me?

Clients increasingly want to buy solutions to problems; they don't want to have to separate the pieces and to deal with the politics of multiple suppliers. We either have to grow up and recognise this or forever be a sub-contractor for someone else.

All of the thoughts contained here are my own, but I can tell you that they are based on literally hundreds of interactions with staff in SWITCH at many different levels of the organisation over a period of more than two years. The examples may not happen every day, but they don't have to happen that often to have a serious negative impact.

This point is bound to raise some controversy, but in my interactions with SWITCH over the past few months I have not yet heard many example of how they used or are doing BPM to improve their own business. Which is a shame, because from my perspective they just might find that BPM offers them their best chance for long term survival? because we as they know that price won't. So the question to SWITCH is this – if you don't believe or practice BPM to help your organisation, then why should I believe that you can do it for mine?

SWITCH as a group has phenomenal intellectual power available to them, it is going to be fascinating to see whether they actually unleash that talent on the market, for now, to me it seems that are still content to hold that talent on a short leash and in some cases that leash is actually causing people to stop believing in both their companies and themselves – definitely a sad state of affairs.

My final thought is aimed at only one or two you and you will know who you are. If you want to survive and to continue to prosper then perhaps a quick look at the ethics of the way you conduct some parts of your business might be in order, honesty and integrity are pretty vital traits for the long term success of any business. Unfortunately I have had firsthand experience of the negative side of this and the excuse that we are a large company is simply not good enough. Just think how many people might tell the other side of the story to other people and what effect that could have on business in the long term.

Thoughts for the Day

1. Are you still focussed on the lowest price in a value based world?
   
2. Are you making best use of the talent you have?
   
3. If you won't do BPM in your organisation, then why should I let you do it in mine?