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What Factors Enabled Indian Software Industry to Become a Global Industry?

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Q. What factors enabled Indian software industry to become a global industry?

Various factors helped Indian software industry become a global industry.

  1. Cost advantage – The Indian IT industry got the cost advantage over the home countries to do the manpower intensive work. This introduced Indian IT to global needs.
  2. Standing up to Y2K Opportunity – Y2K issue came as a big opportunity for Indian IT to showcase its project management skills. The industry was always known for cheap labor, but this time the industry was recognized for its project planning and managing capability, an indication that Indian IT industry can move up the ladder and get a bigger meat of work and not just some small tasks.
  3. Convincing the clients of ODC capability – After proving its mettle in technical capabilities and project management, the Indian IT industry convinced the global market that the industry can even deliver results without being under the constant guidance of the clients.
  4. The market serendipity – Had there been no Y2K, or had the top executives at Nortel & Motorola not endorsed the Indian IT industry, the situation would have been different. Thus there was a mix of chances and the capability to make maximum utilization of those chances that made Indian IT a global Industry.
  5. Slow IT adaptation in India – Had Indian industries adopted to changing technologies and India too would have been a good market for IT, the situation would have been different. Indian IT companies would have faced great competition in home country and might have not got the opportunity to scale up.

What were the various inflection points in the industry path to attain global status?

  1. Y2K – By delivering project solutions during the Y2K issue, Indian IT industry signaled the world about its technical and project management capabilities. This was a big inflection point as the industry repositioned itself from just being the backend low cost software support industry to project management capability industry.
  2. ODC capability – By setting up ODC capability and moving up to international standards by complying with CMMI, P-CMM etc standards, the Indian Industry got more respect in global arena.
  3. Listing in US capital market – By listing themselves in US capital markets, they came under the watch of the biggest US giants and attracted the best talent.
  4. Riding the BPO wave – Indian IT did not only rode the BPO wave, but also headed it. This helped the companies understand the processes of their clients. Later on, they provided end to end solutions to their clients.

What challenges does industry face in 2015?

  1. The changing technology landscape – With the world moving digital, Indian IT has to turn with the tide or they’ll be washed away with it. This would mean, upgrading the workforce, the systems and the overall structure of the industry.
  2. Losing the cost advantage – Indian IT industry will gradually lose its cost advantage to other developing nations and thus offer a better value proposition to clients.
  3. Accepting the change – With increasing number of start-ups and their performance being better than the Indian IT incumbents, the industry will face a shift in the way the larger companies invest in market and attract talent.
  4. Co-Creation – With most of the global companies considering IT as a major differentiator, Indian IT companies must help their clients in co creating innovative solutions.



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