Evolution of the Indian IT Industry
Over the years, the Indian IT industry has gradually moved up the value
chain and has positioned itself as a global player in the IT industry
worldwide. Its progress can be described in the following three phases.
Phase I
(1985-95)
During this period, the IT industry was still at a
nascent stage of development, and the industry size was not substantial either.
The IT industry consisted of several start-up projects that offered application
development and maintenance services to some of the Fortune 100 companies, with
a peak contract-size of less than $5 million. The industry's export services
mainly involved the sending of technical manpower onsite. During this period,
low cost service offerings were the main value proposition that the Indian
industry offered to its customers. Most companies perceived themselves as small
exporters to the US
Phase II
(1995-00)
This period was characterised by high industry growth rate, with the
industry-size increasing to just under $1 billion. Companies offered services
in the areas of e-business, ERP and Y2K to a large base of Fortune 500
companies. The top five companies increased their share, and the small and
medium sized enterprises (SME) also witnessed high growth rates. The peak
contract size reached $5 million dollars, and high-quality and improved
productivity were value propositions that the industry offered customers. The
perception of companies underwent a change from being just small exporters to
being software service providers.
Phase III
(2001 onwards)
In 2008, the IT industry (excluding hardware) touched the $52.1 billion
mark, with growth coming in mostly from the mid-size companies, and top five
companies further expanding their presence. The peak contract value reached the
$800 million mark. Currently, the clientele of Indian companies constitute the
top 2,000 corporations of the world. Indian companies have increased their
presence in different service-lines such as systems integration, network
management, packaged software implementation and areas of products and
technological services. Even though the thrust has been mainly towards
providing offshore services, onsite services also form a part of the service
offering. Security, data protection and process management have become the
primary industry values to customers.
Companies are focused on providing lifecycle solutions, with offshore
development serving as the competitive edge. Indian players have positioned
themselves as high-quality and low-cost solution providers, besides
establishing their credibility in project management. Indian companies have
been expanding their presence in areas such as IT consulting and IT
outsourcing, while moving up the value chain. The top five companies of the
Indian IT industry are aiming at being ranked among the global league of
service providers. The industry is expecting the offshore delivery model to
succeed, as the peak contract-size is likely to reach the $1 billion mark.
Quality
In terms of quality too, Indian companies have moved up the ladder.
Earlier, companies generally focused on work products, which gradually evolved
into process improvement, and ultimately project orientation took root. Indian
companies were quick to align their quality management systems (QMS) with the
ISO 9000 standards. This ensured consistent and orderly execution of customer
engagements and provided a framework for measurable improvement. The next stage
was associated with a focus on software engineering, which was often achieved
by aligning the QMS with the capability maturity model (CMM) framework, coupled
with undergoing one or more assessments at increasing levels of maturity. This
process has led to a situation where India
