Monthly Archives: July 2013

IT Provider & Client Relationship – Short term goals Vs. Long Term goals

Most of IT big-budget, multi-year contracts are inked with months if not weeks of due diligence most often looking at the credentials of the firms and their leadership. Almost all of the big firms have exceedingly high reputation at their senior leadership levels with unmatched sincerity. Coming to smaller firms it takes them years to build that steadily one client at a time while they evolve to maintain their growth.

Let’s talk about the big firms specifically – The leadership enjoys high confidence among the corporates of the world for their sincerity for their willingness to work at personal levels to resolve differences, help clients concentrate on their business growth while they keep the IT shop humming leaders of IT, their accessibility and reach etc. Providers have won huge praise and awards from governments the world over for their contributions and their dedication in all sincerity.

There are ofcourse bad eggs in ever industry and IT is not insulated from it. Firms that promised much but didn’t deliver on the promise broke agreements and left clients in a lurch.

While the top leaders from IT providers develop long term relationships and grow the business the tasks of growing the holding the fort and delivery falls on the middle tier leaders often don’t follow the core principles their leadership used to bag the contracts and grow. The goals of middle tier is often grow their individual careers, look for short term revenue opportunities, one up man ship, unhealthy competition, poor client engagement, making untenable promises, politicking, pitting one against another, indulging in infighting, complaining on their client partnerships – just to name a few. Some are outright ill-qualified The analogy of “too big” to be thrown out of the client or multi-year contract also creates an atmosphere of protection for the middle tier leaders of the IT firms to be comfortable with.

This is one of the top issues that IT providers and their leaders struggle with but don’t make an issue for their clients to know that this exists. Often the middle level managers who are representatives of their leaders on client sites totally forget the principles of client engagement their bosses laid out and toe their own line often with negative consequences.

Aided by some of the negative pressures on outsourcing in developed countries from the locals this problems at times can spiral out of control. Some of the managers from IT providers are untrained and cannot fit in culturally or they reach client locations due to other considerations. Top tier IT firms have taken steps to train and mentor them before they join client sites which has helped alleviate this problem. However this exists in quite a good measure.

The vision and foresight to look at long term client relationship is not kept in view while dealing with day to day client engagement / client requests. A good part of the strategy of middle managers in IT firms is to look at making the quick buck forgetting the fact that these instances become a thorn in the flesh at growing business and actually exposes their firms to host of issues that come to bear during the renewal or extension of contracts and impede the growth of their organizations goals and objectives. Not to generalize there are few exceptions that actually end up rising to the top. The ability to sacrifice short term trivial benefit towards developing a relationship with the client for ever is often ignored. It takes a lot to bag a new client in the competitive market environment and retaining and growing it takes much more while losing the client due to short term opportunities at the cost of quality and client satisfaction is something IT providers should keep their eyes and ears open. If you study the growth of the global Big 3 consulting firms, their sole mantras has been towards keeping client interests very high on their radar and align to their long terms growth.

The philosophy of customer once – client forever, needs to be adopted by the IT Outsourcing firms and ensure everyone in their organization lives to their reputation to this motto.

Pain sourcing senior resources…

Most of the run of mill outsourcing providers have it easy providing resources with average years of experienced ranging from zero to 5 years, however ask for a senior resource they have trouble finding them. More so when your rates are tiered, fixed or lower than the prevailing market rates.

Sandbagging on bringing in senior resources when asked for is common. Extension of SLA to onboard with various excuses is not uncommon either. Instances of senior resources asking for higher comp, broader role, career growth etc. also hinders outsourced providers to shy away from bringing on senior resources though the client’s needs them or the role merits.

If you go flex on the rates you may get some result via contracting which has its own pit falls. The outsourced provider is at the mercy of a sub-contractor who could pull the plug any time. However if your rates are fixed you are often out of luck. Often on large outsourced contracts, you will find a vast majority of your resources are from the lowest tier 0-2 years of experience which helps providers keep their margins intact or even grow higher.

Ensure you have the talent you need; it makes sense to hire a full-time employee if the outsourced provider cannot give you the experience you need. Have competition – if one provider cannot provide, switch that open positions to another provider. Keep an eye on the overall talent pool, the experience band, some resources may seem experienced on the book, but their performance could be way down.

Reviewing your overall talent pool periodically is extremely important, it is perfectly okay to have a pyramid type structure, while watching the bottom tier. if it is too flat at the bottom you definitely have a problem.

Resources in abundance but Employability is bleak –The India outsourcing scenario

Filling large outsourcing requirements are not a issue, many of the India pure play firms have adequate resources to fill the gaps quickly. A good percentage of this comes from fresh graduates who come of colleges every year. India produces record number of engineering graduates a good chunk again coming from colleges that lack the basic facilities to teach with poor curriculum and teaching standards. The engineering graduates are not unemployable; they just don’t have industry-ready talent. In other words, they lack the skills required for the jobs that are available to them. Many of them struggle to communicate, cannot answer basic questions and depend on client’s dime to learn and move on with their careers. The quagmire for the clients worsens there and ends with the resources departing after they have gained some traction and actually begin delivering some efficiency.

According to Aspiring Minds, an employee assessment service provider’s 2012 National Employability Report about 83% of engineering graduates are unfit for employment. The report highlights that only about 17.45% of engineering graduates of the year 2011 were employable. National Association of Software and Services Companies’ (NASSCOM) survey of 2011 showcased that over 75% of IT graduates are not ready for jobs and further brought into notice how India’s $60 billion outsourcing industry is spending almost $1 billion a year training them to be fit for jobs.

Deemed unfit in communication skills, confidence, presentation, problem-solving capabilities and generic abilities, an alarming figure presenting hard reality has been brought out in notice. Aspiring Minds also revealed that over 50% graduates fall short of the mark in language and grammar as well.Another interesting finding showcased that graduates from Tier 2, Tier 3 and Tier 4 engineering colleges in India produced graduates that were not industry ready even after interventional training.
Most graduates display excellent theoretical knowledge. However, when it comes to problem-solving, they lack basic analytical skills. The approach to the engineering curriculum in India emphasizes rote (Rote learning is a memorization technique based on repetition) learning. The same set of questions is asked year after year. If your memorization skills are good, you may cram and score well. But that doesn’t mean that you have the skills the industry is looking for.

To cater to the problem of quality demand and supply, NASSCOM has planned to impart training and development of faculty. Having identified the gaps, industry experts foresee the need for improvement in current colleges as a priority as against bringing together newer courses and institutes for engineering.

The pain for clients meanwhile will continue, the learning curve is stiff. This doesn’t augur well for India’s once booming outsourcing market. Other countries like Brazil, Philippines, Poland, China and other near shore companies in West are moving ahead to cash in.