There is big panic among all those sectors who have been thriving so far on export based economy and biggest panic seem to be among Indian IT companies. For more than 15 years, this industry has been working with almost monopoly when it came to outsourcing that they innovated nothing and did not move in value chain. Yes, They have reason to panic as they do not know what is competition, innovation and how to move in value chain and Infosys and Wipro and TCS are no exception to it.

The best thing which has happened to India and if it sustain, Rupee is going to be stronger each day. Look at any economy, when domestic market grows and when trade surplus give you more reserve on forex, local currency becomes stronger as it has more buying capacity and confidence of the market is in it. So, it has early signs of transition from developing economy to developed economy.

Let us first welcome it and then let us talk about how to prepare our Indian IT companies to strive for transition and sustain growth for next phase. Here are some point to consider

Present situation is good news for Indian IT companies. following are the reasons 1. Outsourcing, as it becomes global phenomenon, needs to be gone global and de-fixation to USA (dollar) will force these companies to innovate for new markets. The whole world needs to be doing business with us for services. Wow, we will push our literacy rate and prepare talent better and move from big cities to small cities.
2. Dollar so far gave protection to Indian companies, so there was no need for them to innovate to move up in value chain. Now, they need to move in value chain by innovating and sharing business risks of their customers. All my friends in south have been obsessed with billing rate and time and material basis. They will now have to innovate to become solution provider and would participate in success of their customers.3. This will put immense pressure on talent to be more productive. Do you need an employee in India with less than 50% productivity than his western counterpart and yet only 20% less salary? Hence billing per employee has to go up and that will make these companies go more optimal. This will help us become more professional and stabilize salary hike as rs becomes stronger, we have reasons to stabilize salaries as well. 4. Finally, western companies came for the reason of price, but would stay here for the reasons of size. You see, size does matter. As Indian economy grows and scales, it has to shift from export oriented economy to domestic economy... only then economy goes deeper in rural areas. Hence western companies will seek more partnerships with Indian companies and bring them in the nucleus of their DNA, compared to outsourcing partner- outsiders more often as they eye domestic market. Hence Indian companies have to do following to prepare for next 10 years 1. Discover new markets and establish base. We have enough credentials to now tap new markets2. Do back wards integration to take over countries like bangaldesh, srilanka to offer cost advantages so that they do not go out to compete with India. When I was invited by apex body in Zurich to speak to delegation coming from Srilanka, I found that they present in correlation to Indian companies. While they were probably some of the first times outside India. Why India has not thought about taking over these countries and make something like EU.3. Enhance productivity to increase more ROI per employee. This is major thrust area and very exciting to watch it transforming. Indian engineer knows only roles and not responsibility and productivity is not even half of western engineers. 4. Most important. Innovate and take risk with customers. Now this is easy said than done. At Mobile Mantra we breathe innovation each day and have been doing it for 7 years. Interacting with various industry leaders in India, I see almost no sense of commitment from employees for innovation or to strive better. Simply because they live with pampered feeling that economy is good and they can always get better job any time. Hunger among Indian IT professionals is not there to strive and become community to drive next level of growth. When companies take risk with customers, then they inform customer on key deliverables rather than sending CV of their senior consultant who has high billing rate and that will push them to convert their role playing professionals to take responsibility and create optimization on their man power cost.5. Keep one leg in Indian market to offer value proposition to oversees customers. Infy said on first day of its panic but will take ages to do it. Unless Indian companies work for domestic customers, product and solution approach will not come. This domestic market, where they have massive opportunity to treat that as their research lab rather than revenue, would allow them to build on huge IP capital, which will come handy for many of their oversees customers looking for India specific solution to be tailor-made on their products. This is not easy for top 5 companies as they knew growth in monopoly, risk free model... it calls for innovative start up to come up to lead next generation of growth in Indian IT industry.