IT projects have traditionally been priced based on labor hours. Availability of skilled and comparatively labor in a far fetched country has driven IT work offshore. Clients definitely love the presence of the employees at their site, if costs are good enough. This is because it gives them feel more comfortable about the kind of work they are getting.

Hence India and Indians have enjoyed the incoming cash flows over the past decade or so. There are so many who passed out of their engineering colleges, to be lured with the huge opportunities abroad. Many of them, by virtue of being acclimatized with the alien environment, chose to stick on. Going forward they have applied for dual citizenship and a green card.

Water flows from a region of higher pressure to a region where it is low. The flow of money can also be compared to this model. But there comes a time when the speed of flow gets reduced, as the pressures try to reach equilibrium. The real world is much more complicated. But it would not be wrong to use this model to understand what opportunities offshoring can give us.

Undoubtedly, the speed has reduced and the opportunities are not so many. The US growth rate is stalled at 1-2%, while the Indian economy is growing at 9%. There are various sectors contributing to this, and software does not feature at the top. If one looks at the price chart of the various stocks in the BSE sensex in the past 6 months, it is evident that IT does not remain in the top 10.

So does that mean it marks the end of IT? It seems unlikely. Its time IT developed itself into a mature industry. Companies are being forced to be more innovative in their solutions & services. In this effort to make them more wanted, IBM has developed and is strongly focusing on the global delivery model.

The GD model simply means more offshore, minimum onsite. Clients are being made to believe that India has emerged as a favorable destination, and reducing their data privacy and quality concerns.

What does that mean to the employee in the GD era? It simply means lesser onsite, implying lesser good experience, and more offshore. The organizers of the GD party (ie the management) will definitely have a lot to add to their CV, for they are bringing in a new way of doing business.

But for the employee it is bad news. Lesser travel means interacting with the client only on chat, telephone and (where practical), video conferencing. They do not get to know their client, nor do they get to understand their working. More importantly, the ground level workers are shielded from the strategic initiatives, and one often gets to hear rumors (usually bad).

What will happen in the future? If we say that the GD era has arrived, it will translate to cost savings for the client, more revenues for the forerunner of the model, and lack of learning opportunities for the workers.

What must someone in this rut do? They must enhance their skills that will make themselves more valuable. They must make sure they get to meet a client and not take an impersonal view. They must be more innovative to look for things that sell…

For one’s value is determined by what the Market is ready to pay.

Links:
What is global delivery? http://www.offshore-softwaredevelopment.com/global-delivery-model.asp

Global delivery implies stronger partnership: http://www.itbusinessedge.com/item/?ci=16239

Comparison of global delivery models: http://www.forrester.com/Research/Document/Excerpt/0,7211,34317,00.html

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