IT’s rockin’

The rush to join the IT bandwagon is great. But will the party last?

Arun Varma Delhi

AH Srinivasan, a manager with a large financial enterprise, is cracking his fingers in anxiety. "If my son can get computer science at Vellore Institute of Technology, I will immediately proceed to Tirupathi to thank God," he says. Joseph Jacob, a senior officer in the ministry of home affairs, and his wife are trying hard to persuade their son to opt for information technology (IT) as a career. Justin Jacob, an alumnus of St. Columba's school, New Delhi, wants to pursue hotel management instead.

Like it or not, Generation X cannot escape the glare and glory of IT. Some are willing to be drawn, others will be pushed into it. This is the effect of the grand entry of an industry that promises to consume more human resources than the country can produce. And it is going to grow further. Or is it? To get the answers, some parallel thinking is required.

The software industry and the country's earnings from it are surging. Today, industry earnings stand at around $16 billion. Industry apex body, NASSCOM, is predicting over 15 per cent growth on a year-on-year basis. IT-enabled services (ITES), is one of the biggest employers. Allied services like human resources development, finance, and semi-skilled professions are also growing. Overall, these function as persuasive arguments for Srinivasan and Joseph Jacob to push their kids into IT careers.

But there are hurdles. And clouds can be seen gathering on the horizon. Ramalinga Raju, chairman of Satyam Computers, one of the larger software companies in the country, reported a 3.9 per cent (Rs.138 crore) dent in their second quarter earnings this year and put the blame on the appreciating rupee. Infosys issued profit warnings to investors before it announced its second quarter results. Tata Consultancy Services (TCS) and Wipro are watching. Clearly, a stronger domestic currency is not going to favour companies that depend mostly on foreign currency earnings. With the increasing rupee-dollar parity, companies will have to rework their strategy.

Some companies have already made sure-footed moves towards what is called 'reverse offshoring' — Indian companies, which are becoming major players in the international arena, are hiring aggressively in the United States, reversing the earlier trend when they always transferred Indians to work in America on temporary visas. A recent report by Forrester Research names India's largest offshoring firm, TCS, and software giants Infosys and Wipro among them and says that some American workers who were laid off have now been re-employed in Indian outfits after receiving training in India.

Wipro Ltd, for instance, is scouting US locations for two big software-writing centres, each of which would eventually employ hundreds of programmers. Cities on its short list include Austin (in Texas) and Atlanta (in Georgia), because of their deep tech-talent pools and reasonable salary costs, a leading business magazine says. "The work we're doing requires more and more knowledge of the customers' businesses and you need local people to do that," Wipro Chairman Azim H Premji was quoted as saying.

Today, only 2.5 per cent of Wipro's global workforce is non-Indian. But the company wants to boost the number to more than 10 per cent in a few years from now. Indian outsourcers say their US expansion plans predate the latest concerns over immigration and jobs. But they acknowledge the fact that the trend might ease tensions as the US Senate mulls new regulations concerning H-1B visas (temporary working papers for foreigners).