Why is India good for Software?
written on: July 15, 2004
India is much talked about these days because of its growth in software exports and because outsourcing software jobs to India is "popular".
Why is India good for software compared to other nations? Is it only because Indian labour is cheaper, and resource availability is higher?
Answer : Yes!
But I dont think it ends there. They are only part of the few reasons.
Indian software are of comparable quality adhering to software standards worldwide, and all large Indian software companies practise quality standards and work environment standards like ISO, CMM.
Understandably India is not a country which strives for the foreign market, theres much more to tap inside india. Because its a fact that majority of indian businesses(non-software) are not automated, and government institutions are not having technology facilities. That means much of India is still 10 to 15 years behind in technology.
So does that mean Indian software companies are basically targeting only foreign markets?
Not so. There are many instances in the country where indian software companies have been doing and are doing automation services for a variety of companies and some government institutions. An example of a growing in-country software consumer market is the banking sector in india.
Government institutions subsidise a lot of products and their services in the country, to allow for more people-friendly behaviour and for political reasons.
A lot of commercial products in India are also low-priced versions of actual quality of similar products sold in foreign countries, just to keep the India customer interested.
Yes, "Indians are used to low cost of living". And high quality products are not easily saleable in local markets. So, its only the foreign markets that can afford the cost of quality that some Indian software companies provide.
Considering the quality of software services provided, Indian companies target foreign markets to make the service feasible.
As foreign market interests grow in India, quality of products are also changing, but as expected only for the foreign consumer. Indian companies have to totally deal with foreign markets and Indian markets differently. Thanks to all the top-notch Indian Business schools who are educating more and more Indians about tackling both markets at the same time withstanding the consumer demands either side.
How do Indians manage the software biz?
Indians in my knowledge, are slightly more pessimistic than optimistic. So the possiblity of failure and the management of risk is inborn to some extent. Apart from that a lot is learnt from experience with clients and through education.
Communication is the only problem hindering knowledge transfer. With more than 16 recognized Indian languages, India is diverse and for software professionals English is the medium to communicate even within the country. While some are good in their English some really find it an extra effort and miss opportunities. Communication is a major quality requirement when it comes to software industry and any services industry in general. So, not all Indian software companies are high on quality and on meeting consumer interests.
Software is seen as an high-end industry in India, and every year India produces more than 30,000 software professionals (Actually, i keep the numbers less here since i dont have relevant documentation to confirm them).
Do all these people get into software?. Though its unbelievable, I would say atleast 90% of them do. In India, Software is a happening industry where people can find jobs easily. All big software companies manage to create a requirement to recruit atleast 2000 employees every 6 months, most of them are outsourced to on-site projects in foreign countries (which effectively cause concern to foreign countries on outsourcing jobs).
Given this number(30,000 professionals every year), we can consider churning one company like Microsoft every two years (Microsoft has around 60,000 employees worldwide).
So next comes the cost factor:
Indian labour are not cheap or low-cost considering Indian living costs and economy. Especially with software, Indian pay-scales are on the rise given the eonomy in India. Indian labour can be considered cheap only by countries whose economies are larger. For instance, at this time of the day, an American dollar costs close to 48 Indian Rupees, and an Euro costs 57 Rupees.
The big growth in Indian software industry should not be observed as due to cheap labour and higher resource availability. It accounts to the quality standards adhered to.
Content Copyrights Harish Palaniappan.
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