No Room for Short-cuts

For

any system to be stable, it has to have both positive and negative feedback. If

the feedback is only positive, then the sense of balance gets lost. And that’s

what happened in the case of the IT industry. Each year of solid feedback

created a very strong impression, until it got to the point where too much money

started chasing IT, resulting in investments in ideas and organizations, which

were not intrinsically viable. From that perspective, when one sees a correction

after a very long period of hyper-growth, one realizes that a brief slowdown of

the IT industry worldwide was inevitable. This correction is bringing in strong

elements of realism, with customers and investors being far more demanding and

selective. In that sense, the slowdown will be good for the fundamentally strong

companies, which are long-term players in the industry.

In spite of the high growth rates in the IT training business in India during

the last 10 years, the market forces have worked effectively, rejecting many

companies, which did not create sustainable value. Now with a temporary

slowdown, many more companies will be negatively affected with customers

differentiating between companies on the basis of their fundamentals. This is a

cleaning up-process, that will eliminate a lot of mediocre players and out of

which will emerge much stronger players–those who have solid business models,

strong process capability, and a rich legacy of customer confidence and

goodwill.

A sobering effect of the slowdown is that shortcuts are now passé.

Institution building is a long process that involves years of investments in

core values like ability to innovate, commitment to quality, good results

sustained over a long period of time, and most importantly, an in-depth

understanding of the market. Segmentation of the training offerings on the basis

of the diverse requirements of consumers is the need of the day–be it programs

in advanced areas for IT professionals, study programs for students seeking

careers in computers or short programs for those who simply want to be computer

literate.

Another significant trend is the realization by both the employer and the

student that there is no shortcut to success, driving them to opt for longer,

fundamentals-oriented courses rather than short-term skills-based programs. In

the coming times, new learners will be challenged to keep up with emerging

digital tools, as employers can now take the time to look for people with the

right skills. The beneficiaries will be computer professionals with the right

skill-set. So, just like the dot-com shakeout is forcing companies to pay

attention to fundamentals, students will be challenged to be on their toes

instead of only looking to get rich quick. Educational institutions will also be

challenged to anticipate market shifts, while at the same time, not going

overboard on every new thing.

As we go past the slowdown, which is expected to bottom out within a year, we

will see the Indian software industry getting a bigger percentage of the

business that comes out of the US in terms of outsourcing. American companies

have already become extremely cost-conscious. On top of that, India has built

excellent brand equity in software in the last three years. As a result, many

conservative American companies, who may otherwise not have worked with a

non-American software services company, will work with Indian software

companies, providing a very good growth opportunity. Moreover, earlier it was

only US-based companies that were leveraging the India opportunities. But now

even markets like Europe and Japan are relying more and more on India to fulfill

their requirements for IT services.

I continue to believe that IT will offer much more promising career options

than most other fields, in spite of the temporary slowdown. India, led by

private initiatives in education, will continue to create a new mechanism to

build manpower for IT in the non-formal sector, supplementing what is happening

in the formal sector. In the private sector training organizations, curriculum

is almost invariably ahead of what is available in the formal sector, simply

because the process of curriculum reform in academia tends to be much slower. In

the private training industry, the forward-looking companies are far more

future-oriented in curriculum design, anticipating significant shifts and then

taking decisions on what will be the successful technology in the future,

considering that a student would be completing the program after three or four

years.

With thousands of engineering students studying at private training

institutes concurrently to build practical skills on new technologies, the two

streams are getting complementary. And the students are getting a strong

theoretical input as well as current technology input in these two different

set-ups giving them a dual qualification. While the college degree gives basic

education, private training institutes offer special skills for a profession.

The future is about complementing and supplementing the formal system to meet

the market needs both quantitatively and qualitatively.

During this short period of the slowdown, it is particularly important for

the students, who are starting their higher education now, to realize that

slowdown is irrelevant for them. By the time they pass, in a year or two, the

industry will be back to a situation where there will be shortage of talent. The

temporary slowdown gives them a unique opportunity to position themselves in the

market just as it revives. What’s more, they will also have the advantage of

being up to date with the newest technologies. However, they have to be very

selective to make sure that they invest their time and money in an institution

that can easily withstand such a period of difficulty.

The IT training companies, on the other hand, have to adhere to good

standards sustained over many years, bring more value into their product

offerings and introduce many more new technologies as they march ahead.

Rajendra S Pawar is chairman, NIIT