Folks election is round the corner so his humble self has been pondering on whom to vote for. In good old days rather younger days, one just walked in and voted with heart (read pity). Still paying a huge price for having supported Congress ..... ah wish I was wise in foresight and agreed to my good old dad. He always thought Chidambaram (Chidu) and Manmohan were good students of economics and at best average managers (and of course poor leaders).
List of omissions of Congress is huge. If they have shame, they should withdraw from these elections. Shame ... ah I know I am expecting a lot from them.
First grouse - all august institutions independence was compromised in true mai baap party style. The (mis)appointment galore is stark. I am extremely ashamed to have some Pratibha Patil as first citizen. Most Indians around me had not even known she existed till she was not pushed on us. Imagine first family of India having murder charges !!! Letting go of RBI governor YV Reddy - anyone who knows little economics will agree that he saved Indian economy from catastrophe. Imagine what would have happened had he heeded to Chidu. Next SEBI chairman, Damodaran - let go because he was not submissive. Promoting a tained Election Commissioner as Chief Election Commissioner.
Financial jugglery - the less said the better. Forget about mismanagement. If corporate honchos can be held responsible for dressing up balance sheet (and be jailed like Raju brothers), why not finance minister for doing the same to India's balance sheet. Imagine hiding over 2 lakh crore of debt under shady heading "off budget items". In boom time tax collections under various heads grew 40%. This is a once in a millenium phenomena (not century). We should have been a budget surplus state. But our wise men blew all the money up and in addition managed to accumalate humungous debt. Its like winning a lottery and blowing all of it on alcohol. I dont know how we will manage in an environment where there is reduction in tax collections.... hmmm ... raid raj ... on innocent tax payers who will be portrayed as evaders. The list is long so shall leave it here. Imagine Lalu yadav doing a better job than Chidu .... atleast on the face of it .
Nuclear deal. Ahem . I do not know if it is good or bad. But when Congress came to power, his humble self , submitted suggestions from 17 different fora (including postal) to remove all taxes on an electric car called Reva. This could remove our dependence on imported petrol. What does one hear next, taxes on petrol guzzlings cars get reduced. I also sent a letter with a vague address .... Manohar Panikker , Chief Minister of Goa .... and viola .... the car becomes sales tax free in Goa. I am not sure if it was already in offing but happened. Had chidu and manmohan given sufficient break to Reva, for all you know we could have a global automobile giant in country. Guess which country's tax breaks promote Reva the most ....... UK. Can you believe this ..... the money government spent subsidising fuel ..... would have bought 1 crore Revas (assuming Reva would have been priced the same inspite of high volumes) ..... and thats more than all cars put together on Indian roads today. Unlike lot of countries in West, India is blessed with Sun round the year. Why is Manmohan not staking his government to capitalise on it ? Why is wind energy being ignored ? Go after nuclear .... but after having tapped all our strengths.
Politics make strange bedfellows ..... could suddenly make outcaste samajwadi party ... beloved. Not thinking before buying votes ..... so much for value driven politics .... being led by ... err ... our youth political icon ..... rahul gandhi .
As for party with mai baap attitude ...... they feel neglected ... if their ministers are not crowded for favours like out of turn Gas connection etc. Imagine 7 years ago you could have off the shelf gas connection from any gas supplier in India. Today .... you need to slog your butt off (and of course bribe) to get a government gas connection.
My opinions above does not mean I support BJP. The good thing about them is that they gave us Abdul Kalam as president (hindutva party and muslim president ...!!!) , they gave us Damodaran etc and things like golden quadilateral. Still I aint gonna vote for them .... given what happened in Mangalore and then the way the a set of youngsters partying in outskirts of Bangalore was handled .... who wants talibanisation of Karnataka ?
Tuesday, March 31, 2009
Wednesday, March 11, 2009
Luck By Chance
There is no industry as lucky as the Indian IT industry. I do not mean that the folks in the industry are not visionary or that they did not work hard. But luck had an important role to play. Lets take a case in point .....
Below average political leadership
Irresponsible and incompetent political leadership is the biggest boon for Indian IT industry. By doing Satyam like accounting jugglery GOI (government of India) has hidden huge deficits (losses) behind off budget items like oil bond, fertiliser bond etc. For Rajus to transfer fortune of Satyam to Maytas is sin but the leaders have conveniently transferred fortunes of ONGC to oil marketing companies.
When the Rajus could sin no more ..... they were jailed. When GOI could sin no more .... rather cover up their sins no more ...... Rupee fell from 40 to 50.
Rupee at 50 means growth of over 20% in revenue and 25% in profits for IT Industry assuming they do not get additional business this year.
The key for Indian IT is that Indian economy at any point of time be worse managed than US. This will ensure a favourable exchange rate.
Assuming Bush is once in a century phenomenon .... I mean you cant get worse than Bush ...... hail Chidambaram & Co.... may his party be in power as long as I am in IT industry.
Imagine having erstwhile Finance Minister , Jaswant Singh at helm for last 5 years. With all his prudence and sensibile approach which he demonstrated earlier, Indian economy would have been well managed implying dollar at 35 ... curtains for Indian IT ......kinda similar to whats happening to Japanese export economy (Sony included) courtsey stronger yen ..... hmmm all I can say is ..... lucky by chance ....err luck by chance.
Below average political leadership
Irresponsible and incompetent political leadership is the biggest boon for Indian IT industry. By doing Satyam like accounting jugglery GOI (government of India) has hidden huge deficits (losses) behind off budget items like oil bond, fertiliser bond etc. For Rajus to transfer fortune of Satyam to Maytas is sin but the leaders have conveniently transferred fortunes of ONGC to oil marketing companies.
When the Rajus could sin no more ..... they were jailed. When GOI could sin no more .... rather cover up their sins no more ...... Rupee fell from 40 to 50.
Rupee at 50 means growth of over 20% in revenue and 25% in profits for IT Industry assuming they do not get additional business this year.
The key for Indian IT is that Indian economy at any point of time be worse managed than US. This will ensure a favourable exchange rate.
Assuming Bush is once in a century phenomenon .... I mean you cant get worse than Bush ...... hail Chidambaram & Co.... may his party be in power as long as I am in IT industry.
Imagine having erstwhile Finance Minister , Jaswant Singh at helm for last 5 years. With all his prudence and sensibile approach which he demonstrated earlier, Indian economy would have been well managed implying dollar at 35 ... curtains for Indian IT ......kinda similar to whats happening to Japanese export economy (Sony included) courtsey stronger yen ..... hmmm all I can say is ..... lucky by chance ....err luck by chance.
Saturday, February 21, 2009
Slow Down : A boon part 3
We had a new product release in our company and hence been quiet for some time.
Continuing from where I left last time, the biggest beneficiary of the slow down is the Engineering education system in India.
The last decade saw mushrooming of engineering colleges all over. Parents thronged to admit their children to these colleges as long as these colleges could show placements. To accentuate the problem the colleges started thinking only reason of its existence was to help students get a job. With an easy job market, it was not a tall order. They turned into a vocational institute and had lesser esteem in student's eye than a low end trainers like NIIT.
Typical expectations from a college :- building value system of their students, helping them develop a rationale problem solving based approach, enabling a smooth transition from student to professional life etc ; were no longer talked about. Most of the colleges did not have functional play fields or basic support for extra curricular. Forget things like research or publishing papers.
To accentuate the problem, the faculty after years of experience used to earn less than starting salary of graduating student. Only the dedicated few would not get tempted by higher salary or corporate world. As a result majority of the faculty was sub par.
How are things changing? With fewer jobs, college managements are forced to be progressive. This includes encouraging the faculty to persue post graduate and doctoral programs. Next given the poor job market ample amount of experienced professionals are now available to do faculty jobs. Last but not the least: - with fewer jobs, students are trying to take their studies seriously.
Signing off with a hope that we shall soon see a golden dawn for India
Continuing from where I left last time, the biggest beneficiary of the slow down is the Engineering education system in India.
The last decade saw mushrooming of engineering colleges all over. Parents thronged to admit their children to these colleges as long as these colleges could show placements. To accentuate the problem the colleges started thinking only reason of its existence was to help students get a job. With an easy job market, it was not a tall order. They turned into a vocational institute and had lesser esteem in student's eye than a low end trainers like NIIT.
Typical expectations from a college :- building value system of their students, helping them develop a rationale problem solving based approach, enabling a smooth transition from student to professional life etc ; were no longer talked about. Most of the colleges did not have functional play fields or basic support for extra curricular. Forget things like research or publishing papers.
To accentuate the problem, the faculty after years of experience used to earn less than starting salary of graduating student. Only the dedicated few would not get tempted by higher salary or corporate world. As a result majority of the faculty was sub par.
How are things changing? With fewer jobs, college managements are forced to be progressive. This includes encouraging the faculty to persue post graduate and doctoral programs. Next given the poor job market ample amount of experienced professionals are now available to do faculty jobs. Last but not the least: - with fewer jobs, students are trying to take their studies seriously.
Signing off with a hope that we shall soon see a golden dawn for India
Wednesday, February 11, 2009
Slow Down : A boon part 2
I received three cute emails in follow up to my previous article, wondering who were the other beneficiaries of slow down. Hence I am breaking away from blogging only on weekends.
This is the SME sector of India. I spoke to handful of folks who own a manufacturing companies / units. These are very progressive folks. They believe in leveraging technology. However they had a problem while the boom was on, any respectable vendor was prohibitively expensive. Rightly so. Why should a company of the league of Infosys look at sub $2000 realization per man month in domestic business. To complicate it further, most of the work being outsourced from US was pretty low end and hence easy to deliver. The Indian SME segment would have wanted solutions built grounds up and require competence. Its human nature to take the path of least resistance and hence most of the companies worth their salt focused on international business.
The slow down has brought sea change. Suddenly companies like TCS is big on SAAS model and Infosys licensing its IP to Airtel DTH. Everyone is looking at domestic market. The refrain that Indian market is tough and dirty is gone. For lot of medium sized software companies India is suddenly a focus market.
Hence we have a sweet spot where in Indian manufacturing segment is becoming efficient and on the other end Indian software companies are moving up the value chain.
Will soon write on next beneficiary ... India's engineering education system
This is the SME sector of India. I spoke to handful of folks who own a manufacturing companies / units. These are very progressive folks. They believe in leveraging technology. However they had a problem while the boom was on, any respectable vendor was prohibitively expensive. Rightly so. Why should a company of the league of Infosys look at sub $2000 realization per man month in domestic business. To complicate it further, most of the work being outsourced from US was pretty low end and hence easy to deliver. The Indian SME segment would have wanted solutions built grounds up and require competence. Its human nature to take the path of least resistance and hence most of the companies worth their salt focused on international business.
The slow down has brought sea change. Suddenly companies like TCS is big on SAAS model and Infosys licensing its IP to Airtel DTH. Everyone is looking at domestic market. The refrain that Indian market is tough and dirty is gone. For lot of medium sized software companies India is suddenly a focus market.
Hence we have a sweet spot where in Indian manufacturing segment is becoming efficient and on the other end Indian software companies are moving up the value chain.
Will soon write on next beneficiary ... India's engineering education system
Sunday, February 8, 2009
Slow down : A Boon for India??
I just came back from a marriage in Delhi. No one really cared about slow down. But in Bangalore it is big. Whether its media or whether a chance meeting with an old pal (ex colleague), slow down is the topic. Everyone thinks its bad for Indian IT. Let me introduce you to few folks. They gave me a different perspective. They rather have slowdown every now and then (though not permanently).
I met Rohit a passionate co-founder of a technology company. He is big on IT products targeted at SMEs. Their service offering is both SAAS and the conventional ownership model. Rohit loves the slow down. He could hire six youngsters whom he thought were excellent. He had not got to interview a reasonable guy in the last 2 years of boom (since co-founding the company ).
I had a brief chat with them. All of them were freshers (2008 batch engg graduates). They were extremely happy. Each one had a campus offer from "large companies". In a regular boom year, their parents and peer pressure would have forced them to join these companies. They took advantage of uncertain market conditions to convince all around to join this start up. Today when they exchange notes with their seniors working in the "large companies", they can only pity them because of extremely poor work content of their seniors.
However the curious side of me asked Rohit why did he not choose to recruit laterals when so many of them are available. He said, most of the laterals at 2-4 years experience level were one trick ponies who just knew how to perform a single job well repetitively. They were wasted and were no use in an environment where they need to provide solution every day.
Any nation in world becomes rich when backed by inventions (intellectual properties or IPs) of its citizens. Most of the Indian IT is not creating IPs but just doing repetitive low end work. This model can work only if exchange rate favours the dollars. That can happen only if US keeps creating new things and India keeps supporting the old ones. That is as a nation we are condemned to being stooge of outsourcing nation.
Given the nature of business and its history, an offshore service provider can easily out compete an innovation driven but domestic market focused company (for talent). Slow down is ensuring talent availability for IP driven companies (typically small). They are the ones which will get India leadership. Outsourcing industry can survive only if India is a step behind.
My second take away (though on a very small sample set of 6 freshers) is that some of the bright freshers are not going to waste their life being with one of the top IT services company which have only flashy offices to show for.
Will soon writen on the other beneficiaries of slow down .....
I met Rohit a passionate co-founder of a technology company. He is big on IT products targeted at SMEs. Their service offering is both SAAS and the conventional ownership model. Rohit loves the slow down. He could hire six youngsters whom he thought were excellent. He had not got to interview a reasonable guy in the last 2 years of boom (since co-founding the company ).
I had a brief chat with them. All of them were freshers (2008 batch engg graduates). They were extremely happy. Each one had a campus offer from "large companies". In a regular boom year, their parents and peer pressure would have forced them to join these companies. They took advantage of uncertain market conditions to convince all around to join this start up. Today when they exchange notes with their seniors working in the "large companies", they can only pity them because of extremely poor work content of their seniors.
However the curious side of me asked Rohit why did he not choose to recruit laterals when so many of them are available. He said, most of the laterals at 2-4 years experience level were one trick ponies who just knew how to perform a single job well repetitively. They were wasted and were no use in an environment where they need to provide solution every day.
Any nation in world becomes rich when backed by inventions (intellectual properties or IPs) of its citizens. Most of the Indian IT is not creating IPs but just doing repetitive low end work. This model can work only if exchange rate favours the dollars. That can happen only if US keeps creating new things and India keeps supporting the old ones. That is as a nation we are condemned to being stooge of outsourcing nation.
Given the nature of business and its history, an offshore service provider can easily out compete an innovation driven but domestic market focused company (for talent). Slow down is ensuring talent availability for IP driven companies (typically small). They are the ones which will get India leadership. Outsourcing industry can survive only if India is a step behind.
My second take away (though on a very small sample set of 6 freshers) is that some of the bright freshers are not going to waste their life being with one of the top IT services company which have only flashy offices to show for.
Will soon writen on the other beneficiaries of slow down .....
Sunday, February 1, 2009
Satyam gone..... Wipro next
Satyam will not exist ... the question was never if but always when. Only the suddenness and the reason of demise caught people by surprise. It was given that consolidation will happen in IT industry. Everyone concurred on Satyam not making it.
I differ with the masses on the second name amongst big 5 - Infy, TCS, Wipro, Satyam and HCL. People think its HCL but my vote is for Wipro.
Lets examine weakness of Wipro
1. Exceptional leader at helm -
Mr. Azim Premji is best amongst all top IT CEOs. I am a big fan of his. I do not idolize anyone more than him in IT industry (minus FC Kohli). It took 6 exceptional people to do the equivalent in Infy what he did single handed in Wipro (TCS had still larger management bandwidth). To execute his vision would require exceptional leaders like Vivek Paul. Its very difficult to be lucky two times over. So we have a situation where in there will be a significant skill gap between number 1 and number 2. I have learnt things the hard way in life and this can be lethal even for a small organization , forget a giant like Wipro.
2. Succession planning
We never knew who after Ashok Soota or after Vivek Paul. The problem runs down the ladder. Most of the senior people give me an impression that their growth into a role or their passing on the baton was never planned. Most of the time progressions are rewards for previous job well done rather than ability to execute the new assignment. Last but not the least who after Azim Premji.
3. HR loosing imagination
For me Wipro's senior HR constitutes of folks who would do very well in an MNC. These are folks who could impress you in a short meeting but shall not be able to steer their organization to leadership. I could go on forever writing about the shortcomings. A glaring example would be that a friend of mine in Infy has 40% variable component in salary while his contemporaries in Wipro have just 20% variable.
4. Loosing out in campus recruitment / wrong philosophy in entry level hirings
Wipro does not get premier slots in engineering campus viz a viz its competitors. There are geographies where it even looses out to lower rung players like Cognizant. Its lower compensation than its competitors does not help. To make matters worse, entry level guy is not hired predominantly on potential but ability to answer questions which require rote.
5. Weak entry level training program
TCS and Infy have dedicated centers for training their entry level. Wipro significantly outsources the same. Also training is more vocational where in focus is on teaching individuals tools rather than fundamentals (however their WASE program for BSc folks is an exception). I know it will be strongly objected to by Wipro folks but I suggest they do a quick poll . This constraints them in hiring students from few engineering streams (Comp Sc/ Electronics etc).
6. Not walking the talk
Mr. Azim Premji ... no doubt is a very strong proponent of ethics. I have no doubt about Wipro's commitment to ethics. But down the ladder I feel there could be a disconnect. While bad apples are always there, the key question is when cornered are these principles the governing corner stones for people holding positions of responsibility. My personal opinion based on very limited datapoints is no. Besides I have heard of instances of team not being fair to new recruits (I suspect that it could be because recruiters get a better review if they are able to man a position at lower salary). I know of folks in mid management of Wipro who were not given a fair deal at time of joining few years ago and are today paying a price (slower than deserved career growth). Are they highly motivated .... answer is no. Ironically they have huge admiration for Wipro. So you have people about to move into leadership positions who are not going to quit because they like Wipro but are demotivated. The other glaring example dates back few years. There were a set of people I had interviewed and figured out in first 5 minutes that they had faked up their CV. Next I know they land up in Wipro. The recruitment could be a genuine error or just short cut to meeting target number of 2yrs experienced hires. I would not want to speculate but the scale and frequency of it in Wipro makes me asks "Is it systematic?".
7 . High stock ownership of Azim Premji
This according to me is a very positive point (and even for any investor). But lot of employees see any cost optimisation technique benefiting Mr. Premji rather than making the business (Wipro) competitive. I know lesser mortals will have limited thinking but unfortunately lesser mortals constitute 99% of any company.
Compare this with HCL. Shiv Nadar has found Vineet Nayar. As long as the marriage lasts its a deadly combination. HCL is overhauling its HR (has done leaps and bounds on that count). They have done huge internal PR on how they are not firing people. No recent exodus of senior management. However their campus program is managed by a guy who is very average (comes with disclaimer that I could be wrong on this count). But this is insignificant and transient. Its sad that in an industry where your biggest differentiator is manpower and campus the largest source of acquiring it, best folks are not put in charge of campus recruitment (across majority of IT services companies).
The last question is when do I expect Wipro to fall. In October 08 I was speaking to CFO of a semi conductor company who had previously worked with Wipro. He was shocked at my prediction of Satyam and Wipro. I gave it 2 years for Satyam and 4 years for Wipro. I was wrong on Satyam ... lets see how Wipro shapes out ....
As an investor, the best value I would get for Wipro is 2 quarters into the recovery.
Disclaimer : At no point of time I have worked with Wipro. My opinions are based on my experience including interacting with hundreds of individuals who have been (or are) part of Wipro. entire opinion is limited software services (export) business.
I differ with the masses on the second name amongst big 5 - Infy, TCS, Wipro, Satyam and HCL. People think its HCL but my vote is for Wipro.
Lets examine weakness of Wipro
1. Exceptional leader at helm -
Mr. Azim Premji is best amongst all top IT CEOs. I am a big fan of his. I do not idolize anyone more than him in IT industry (minus FC Kohli). It took 6 exceptional people to do the equivalent in Infy what he did single handed in Wipro (TCS had still larger management bandwidth). To execute his vision would require exceptional leaders like Vivek Paul. Its very difficult to be lucky two times over. So we have a situation where in there will be a significant skill gap between number 1 and number 2. I have learnt things the hard way in life and this can be lethal even for a small organization , forget a giant like Wipro.
2. Succession planning
We never knew who after Ashok Soota or after Vivek Paul. The problem runs down the ladder. Most of the senior people give me an impression that their growth into a role or their passing on the baton was never planned. Most of the time progressions are rewards for previous job well done rather than ability to execute the new assignment. Last but not the least who after Azim Premji.
3. HR loosing imagination
For me Wipro's senior HR constitutes of folks who would do very well in an MNC. These are folks who could impress you in a short meeting but shall not be able to steer their organization to leadership. I could go on forever writing about the shortcomings. A glaring example would be that a friend of mine in Infy has 40% variable component in salary while his contemporaries in Wipro have just 20% variable.
4. Loosing out in campus recruitment / wrong philosophy in entry level hirings
Wipro does not get premier slots in engineering campus viz a viz its competitors. There are geographies where it even looses out to lower rung players like Cognizant. Its lower compensation than its competitors does not help. To make matters worse, entry level guy is not hired predominantly on potential but ability to answer questions which require rote.
5. Weak entry level training program
TCS and Infy have dedicated centers for training their entry level. Wipro significantly outsources the same. Also training is more vocational where in focus is on teaching individuals tools rather than fundamentals (however their WASE program for BSc folks is an exception). I know it will be strongly objected to by Wipro folks but I suggest they do a quick poll . This constraints them in hiring students from few engineering streams (Comp Sc/ Electronics etc).
6. Not walking the talk
Mr. Azim Premji ... no doubt is a very strong proponent of ethics. I have no doubt about Wipro's commitment to ethics. But down the ladder I feel there could be a disconnect. While bad apples are always there, the key question is when cornered are these principles the governing corner stones for people holding positions of responsibility. My personal opinion based on very limited datapoints is no. Besides I have heard of instances of team not being fair to new recruits (I suspect that it could be because recruiters get a better review if they are able to man a position at lower salary). I know of folks in mid management of Wipro who were not given a fair deal at time of joining few years ago and are today paying a price (slower than deserved career growth). Are they highly motivated .... answer is no. Ironically they have huge admiration for Wipro. So you have people about to move into leadership positions who are not going to quit because they like Wipro but are demotivated. The other glaring example dates back few years. There were a set of people I had interviewed and figured out in first 5 minutes that they had faked up their CV. Next I know they land up in Wipro. The recruitment could be a genuine error or just short cut to meeting target number of 2yrs experienced hires. I would not want to speculate but the scale and frequency of it in Wipro makes me asks "Is it systematic?".
7 . High stock ownership of Azim Premji
This according to me is a very positive point (and even for any investor). But lot of employees see any cost optimisation technique benefiting Mr. Premji rather than making the business (Wipro) competitive. I know lesser mortals will have limited thinking but unfortunately lesser mortals constitute 99% of any company.
Compare this with HCL. Shiv Nadar has found Vineet Nayar. As long as the marriage lasts its a deadly combination. HCL is overhauling its HR (has done leaps and bounds on that count). They have done huge internal PR on how they are not firing people. No recent exodus of senior management. However their campus program is managed by a guy who is very average (comes with disclaimer that I could be wrong on this count). But this is insignificant and transient. Its sad that in an industry where your biggest differentiator is manpower and campus the largest source of acquiring it, best folks are not put in charge of campus recruitment (across majority of IT services companies).
The last question is when do I expect Wipro to fall. In October 08 I was speaking to CFO of a semi conductor company who had previously worked with Wipro. He was shocked at my prediction of Satyam and Wipro. I gave it 2 years for Satyam and 4 years for Wipro. I was wrong on Satyam ... lets see how Wipro shapes out ....
As an investor, the best value I would get for Wipro is 2 quarters into the recovery.
Disclaimer : At no point of time I have worked with Wipro. My opinions are based on my experience including interacting with hundreds of individuals who have been (or are) part of Wipro. entire opinion is limited software services (export) business.
Saturday, January 24, 2009
God save the world (economy) from Quacks ...err Economists
Einstine defined insanity as "doing the same things over and over again and expecting different results".
Low interest rates and easy availability of credit .... that is what led to the current economic catastrophe .... and our learned leaders are trying to recreate same conditions.
To make it worse, governments with record deficits and borrowings are trying to pump in more money in name of bail outs.
Looks like sanity will not prevail .... with Obama also getting swayed. God save the world from these quacks who tom tom their MBA/ Economic degrees (even IIMs in India give quacks a degree) to push their ideas through ..... and condemn lesser mortal to a world of recession / slowdown every few years.
Ironically ... we will be out of this mess .... and history will record the current measures as success. Shall soon write on what will the world after recovery look like and why current measures will appear to have worked.
Low interest rates and easy availability of credit .... that is what led to the current economic catastrophe .... and our learned leaders are trying to recreate same conditions.
To make it worse, governments with record deficits and borrowings are trying to pump in more money in name of bail outs.
Looks like sanity will not prevail .... with Obama also getting swayed. God save the world from these quacks who tom tom their MBA/ Economic degrees (even IIMs in India give quacks a degree) to push their ideas through ..... and condemn lesser mortal to a world of recession / slowdown every few years.
Ironically ... we will be out of this mess .... and history will record the current measures as success. Shall soon write on what will the world after recovery look like and why current measures will appear to have worked.
Saturday, January 17, 2009
IT career : a suicide mission?
I just read a news paper article of an M.Tech IIT student committing suicide because he was yet to find a campus job. Immediately my thoughts went over to mid last year (2008). One day on return from office, I was treated to delicious Rasgullas (sweet from Bengal) because Roy aunty had successfully secured a Computer Science seat for her son with a leading college. The price a whopping Rs 25 lakhs. The Roy family had been camping at our home for over three weeks trying to get their son an engineering seat. The weekend after the success, I had to take Roys to see Infosys and Wipro offices. All conversations presumed that their son will join one of these companies in few years. My attempts to tell them that all things which go up come down too - with examples of textile mills of Mumbai came to a naught. Probably my attempts were too feeble or everyone just chose to think positive. Over next few days I tried telling them that their son was a wonderful singer and a music album should not cost more than Rs 5-6 lakhs. They could even save on that given the huge number of realty shows on TV. I did all this coz I was confident .... their son had no future in IT industry.
Over 75% of the people who started their career in IT in year 2007/08 will be unemployed in another 20 years. That time it will be more painful for them to bear it.
Let me explain why I say that. A conservative 2 lakh freshers started their career in IT industry in these two years (Infosys + TCS + Wipro alone accounted for nearly a lakh). A professional with 20 years experience will on average have 100 member teams. So in year 2028, these 2 lakh freshers of today should have 2 crore people under them cumulatively. Highly unlikely. A more reasonable figure would be 20 lakhs (assuming India does not loose out to other countries in outsourcing business). This means that only 10% of people at 20 yrs experience level will have jobs. Lets build an error margin of 150%. Yet only 25% will be employed.
Few people I have shared my theory with say they will not mind working at relatively junior levels to save their jobs. Hmmmm ... nice thought .... but as a business ... if I can have a 30 year old guy do the job of a 35 year old guy's job and that too at lower costs, I shall prefer 30 years young guy. The reasons are obvious - more energy, less liabilities (of children / parents falling ill etc). Unlike developed countries which have inverted demographics (less number of youngsters than older people), India has huge number of youngsters.
The other side to the story is talent erosion (similar to soil erosion) .... where in all fertile capability of a youngster is washed away by IT industry in first couple of years. When I meet these young professionals, I am amazed at the lack of their skills. I still do not know if anyone of us will entertain a carpenter who did not know how to use saw but was good at putting adhesives (fevicol etc) to furniture. Forget 1 yrs / 2 yr folks, even guys with 5 yrs experience do not seem to have fundamentals right. Very few seem to know fundamentals. Most of them cannot teach themselves new computer language. These folks are easily replaced ... by training a new set of youngsters. Even monkey can ape tricks . Why have expensive, aging and cribbing resources when you can have monkeys around by paying peanuts .... !!!!!!
Make a career in IT only if you have skills which will help you in long run ... high aptitude and reasoning (do not bother about verbal skills .... i know lot of companies like an idiot ask for it .... but it can be picked up pretty well on job and by reading newspapers). A good way to evaluate yourself will be CAT, XAT, eLitmus Test etc which have strong reasoning questions. Take the paper and sit with it. If the maximum time is X hours, in 2X hours you should be able to solve the papers completely with 90% accuracy. If you manage it ... there is no industry like IT industry, but if not ... just look for alternates.
If u don't have skills to succeed in IT ... be honest .... my advice to you is ... play to your strengths ... do not go with the crowd ..... your parents gave birth to you a few years too late .... IT industry boom is doomed .... in another decace or two .
Over 75% of the people who started their career in IT in year 2007/08 will be unemployed in another 20 years. That time it will be more painful for them to bear it.
Let me explain why I say that. A conservative 2 lakh freshers started their career in IT industry in these two years (Infosys + TCS + Wipro alone accounted for nearly a lakh). A professional with 20 years experience will on average have 100 member teams. So in year 2028, these 2 lakh freshers of today should have 2 crore people under them cumulatively. Highly unlikely. A more reasonable figure would be 20 lakhs (assuming India does not loose out to other countries in outsourcing business). This means that only 10% of people at 20 yrs experience level will have jobs. Lets build an error margin of 150%. Yet only 25% will be employed.
Few people I have shared my theory with say they will not mind working at relatively junior levels to save their jobs. Hmmmm ... nice thought .... but as a business ... if I can have a 30 year old guy do the job of a 35 year old guy's job and that too at lower costs, I shall prefer 30 years young guy. The reasons are obvious - more energy, less liabilities (of children / parents falling ill etc). Unlike developed countries which have inverted demographics (less number of youngsters than older people), India has huge number of youngsters.
The other side to the story is talent erosion (similar to soil erosion) .... where in all fertile capability of a youngster is washed away by IT industry in first couple of years. When I meet these young professionals, I am amazed at the lack of their skills. I still do not know if anyone of us will entertain a carpenter who did not know how to use saw but was good at putting adhesives (fevicol etc) to furniture. Forget 1 yrs / 2 yr folks, even guys with 5 yrs experience do not seem to have fundamentals right. Very few seem to know fundamentals. Most of them cannot teach themselves new computer language. These folks are easily replaced ... by training a new set of youngsters. Even monkey can ape tricks . Why have expensive, aging and cribbing resources when you can have monkeys around by paying peanuts .... !!!!!!
Make a career in IT only if you have skills which will help you in long run ... high aptitude and reasoning (do not bother about verbal skills .... i know lot of companies like an idiot ask for it .... but it can be picked up pretty well on job and by reading newspapers). A good way to evaluate yourself will be CAT, XAT, eLitmus Test etc which have strong reasoning questions. Take the paper and sit with it. If the maximum time is X hours, in 2X hours you should be able to solve the papers completely with 90% accuracy. If you manage it ... there is no industry like IT industry, but if not ... just look for alternates.
If u don't have skills to succeed in IT ... be honest .... my advice to you is ... play to your strengths ... do not go with the crowd ..... your parents gave birth to you a few years too late .... IT industry boom is doomed .... in another decace or two .
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