Offshoring : The War Of Business Models

If the type of work that can be done over a wire, then probably every job is at risk says Nandan Nilekani, the chief executive of Infosys Technologies. Nandan points out that what's happening is pretty fundamental and in the 1830's, India and China were 50 percent of the world's G.D.P., and then they missed the entire revolution of industry and relates current advancements as part of this the process. Nandan is spot on when he says that underlying secular trends like technology and demographics can’t be stopped or wished away, calling them, megatrends. Winners in his view are those who accept the impending reality and focus on how to take advantage of it. The war between offshoring and the blue blooded consulting houses need to be seen ad a battle of business models. The disruptive offshoring model is to be seen as a threat to the existing business model and older companies will have to reconfigure themselves to look more like us if they're going to be globally competitive. Nandan is at his best when he says that he sees that the challenges for offshoring companies are about hiring and growth and building a brand; for established western players t's about restructuring the work force and points out the difference between the associated excitement and pain.
My Take:All the talk of western outfits scaling up offshore talent enough and challenging India headquartered majors look like a long shot – several western analysts make this mistake that these god sent western organizations can just come and walk over the India headquartered firms once they scale up!! But I do agree with the concerns that the very insightful Vinnie highlights in terms of need to focus on productivity, increasing the gap on customer satisfaction index and the reflecting the benefits of certification in all dimensions of work, based on the Arcon group & TPI presentations . Legitimate concerns indeed – but turn the tables- the western firms as well can never get these correct in right measures either in the near future- there is no evidence that they can show superior ranking in such measures – in fact logic and reasoning would suggest the opposite – as they scale up the challenges would be far more intensive.The well established head for western firms- high end consulting, relationships and a small offshore tail as against the reverse that we see with India headquartered firms are basically different models. Its clearly Advantage India Headquartered Offshoring Firms. I looked at what analysts generally supportive of western firms saying about impending competition for offshore enterprises 24-36 months back and seeing the growth recorded and indications of growth for the near future, I have no doubt whatsoever about the new disruptive model going from strength to strength in the next 3 years. It is battle beyond simple economics- its pride, leadership, sense of accomplishment & the burning desire to win this game that is seen in the Indian IT industry today that would continue to help them to cross barriers and overcome competition .