Beyond the Global Delivery Model

Leveraging the Global Delivery Model to scale up the revenue and profitability of the Indian software services industry

Has India leveraged GDM adequately? Have we made it a normative platform for our software services industry? Narayana Murthy, Founder – Infosys, digs deep into these questions.

Over the last 35 years, the Global Delivery Model or GDM has become the de facto platform for remote software development and maintenance for software services companies in India. GDM is an offshoot of globalization. I define globalization as the paradigm which helps us to source capital from where it is cheapest; source talent from where it is best available; produce where it is most cost-efficient; and sell where the markets are, without being constrained by national boundaries. GDM has provided value for money to clients in the developed world and created millions of jobs in India. This is clearly a win-win proposition both for our western clients and the Indian software companies. GDM has positioned India as the software factory of the world and has brought an export revenue of around US$200 billion in 2023 including the Business Process Management (BPM) opportunity. GDM uses two principles – distributed collaborative software development and 24-hour workday.

Infosys formulated, designed, developed, and articulated to our clients the entire gamut of tools for GDM in the late 1980s. Our ultimate objective was to run a relay in software development to leverage the prime time of development centers (DC) located at appropriate places in the world to take advantage of the 24-hour workday. GDM facilitates handing over work from DC to DC as the earth rotates from the east to the west. In this paradigm, you could start work on a project in Melbourne, add some value, and hand over the work-in-progress to Singapore. Singapore would add some value and hand it over to Bangalore. Bangalore adds some value and hands it over to London. London adds some value and hands it over to Toronto. Toronto adds some value and hands it over back to Melbourne. All this value addition is accomplished during the prime time of these DCs. Thus, our objective was to expand our working day to about 15 to 16 hours a day rather than the normal 8 hours a day without burdening our staff with work beyond their normal hours.

GDM has been enhanced from time to time with appropriate tools to improve productivity and reduce elapsed time from the original waterfall model. Adaption to the Agile Development methodology is a case in point. These days, due to work visa restrictions, there has been a push to move more and more work from on-site locations to offshore locations in India. This move not only reduces the need for work visas but also improves the profitability of Indian software services companies since offshore revenue has traditionally been more profitable than on-site revenue. Further, GDM also helps share domain and technological expertise across various DCs since a critical lacuna in software development is the lack of domain expertise.

Has India leveraged GDM adequately? Have we made it a normative platform for our software services industry? Have we developed adequate standards and tools for installation and operation of the distributed collaborative software development model which is the backbone of the GDMs? These are worthwhile questions that NASSCOM may want to focus on since GDM will help the creation of more jobs in India, improve the profitability of Indian software services companies, and strengthen the economy of our country. I will focus on just two major hurdles to get the full juice out of GDM.

Success in GDM requires a common and detailed domain and technological understanding of the problem-to-be-solved and a professional level of English communication for everybody in the team from Melbourne to Toronto. A professional level of English is needed to exchange requirement definition and domain and technical expertise, report progress of the project, and seek solutions to unresolved problems from DC to DC. With such a commonality of subject matter understanding and a professional level of English, GDM improves the productivity of professionals in the DCs in completing the project and in using the tools to document and communicate domain and technical knowledge, to report work-in-progress, to report problems encountered, to describe strategies for data dictionaries and databases used and for preparing test data to be used, to send new tools developed, and to communicate performance engineering requirements and performance achieved. Success in GDM requires enormous commitment from the top management of software services companies in addition to unrelenting determination and discipline of the project level engineers.

Improving the quality of most of our graduates in the 2nd and 3rd tier engineering colleges is a prime requirement if Indian software services industry wants to scale up and reach our aspirational goal of US$500 billion revenue.

It is well known that the major portion of the revenue of our software services companies comes from the developed world. The two biggest markets for us – the US and the UK – are both English speaking. Even countries like France and Germany realized more than fifty years ago that most advances in computer science and software development were taking place in the US. They adopted English as the de facto language for communication in software projects. During the early days, our offshore software teams used teleconferencing for interaction with our customer staff and our on-site staff. This was followed by videoconferencing during the nineties and the first decade and a half of this millennium. Today, they use Zoom or Microsoft Teams or Webex. These technologies will lose value if we cannot speak English slowly, clearly, and without a heavy local accent with our western clients.

Over the last twenty years, the quality of written and spoken English of most students passing out of the 2nd and 3rd tier engineering colleges in India has been steadily declining. When combined with the accent imposed on us by our vernacular languages, the bottleneck to cross cultural communication across continents becomes a double whammy. Infosys included a couple of English courses in our 24-week training curriculum during the early part of this millennium. The need of the day for every engineering college is to introduce a course in each of the eight semesters on written analysis and oral communication in English or WAC as it was called at the Indian Institute of Management, Ahmedabad in the early seventies. It was a very useful and popular course for management students then. I believe that WAC is necessary for our engineers too. Every leader of our industry, that I have spoken to, feels that the ability to speak grammatically correct English without a heavy accent is a very important requirement to scale up the offshore content of the GDM and thus to scale up the revenue and profitability of our industry.

The second hurdle to our growth is the deteriorating quality of most of the engineering graduates that pass out of some of our 2nd tier and most of our 3rd tier engineering colleges. These graduates form the bulk of the intake to our industry. Even as early as 2006, we conducted a rudimentary test in computer science at Infosys to assess whether the computer science graduates needed to go through our elaborate 24-week long training program. Only 2% of the graduates from the pool obtained passing marks in the test! Therefore, improving the quality of most of our graduates in the 2nd and 3rd tier engineering colleges is a prime requirement if Indian software services industry wants to scale up and reach our aspirational goal of US$500 billion revenue.

In a nation that has focused on creation of jobs and increase of exports, it is very important for our policy planners to address these two important hurdles to the growth of the GDM and, consequently, to the scaling up of the revenue and profitability of our software services companies and the tax collection for our nation.

Narayana Murthy

maildqindia@cybermedia.co.in