Thursday, September 6, 2012

Book Review : Offshore: India's Services Juggernaut

I began reading the book “Offshore: India's Services Juggernaut” wearing multiple hats, reflecting on my prior experience in sell side of sourcing before finding myself on the other side of the fence.

Written by a couple of veteran Infosys employees, the book attempts to take a broad view of the offshoring industry. The authors draw on their Desi heritage with several anecdotes from Ramayana, monkey god Hanuman, references from Bollywood movie Sholay etc etc. I guess this comes from years of practiced self-deprecating humor that Indian offshoring salesmen have to adopt with western clients in order to dispel the notion that India, besides being a land of sadhus and snake charmers is also a land of cyber coolies (moniker used by authors). Interestingly, the cyber coolies are also prone to use such references in regular interactions with client managers when transplanted “onsite”

The first few chapters dwell on extensive context setting. These are perhaps useful for someone landing in Bangalore straight from the nineteen eighties, but for the rest of us providing and consuming offshoring IT services, it reads as summary of news clippings from the past two decades. 

The chapter “what makes a company Indian?” is an attempt to create a case for us to view Indian software sourcing companies (primarily TCS, Infosys, Wipro) as transnationals. While making the argument, authors highlight the increasing Indian footprint of Accenture and IBM along with a brief analysis of captive offshoring (do it yourself). While the narrative in the section is presented logically, one cannot be sure if the arguments are conclusive.
Why mess with Success? The chapter “why can’t India produce a Microsoft” contains a candid assessment of variances in business models of software services and software (product) development.  “An IT services company, on the other hand, takes far fewer risks with its investments….. even if your company is not in the top twenty services companies, you will still be able to carry on with your business profitably”  To see senior executives of Infosys admit that it is not in their DNA to be a software firm is refreshing indeed.
The section on “Hard Slog for Account” gives a good glimpse into the business of sourcing through the eyes of offshoring salesmen. I love the candid assessment of the growth story: eating the elephant one byte at a time (pun intended). Of course, the hard slog is rewarded with a magic of geometric progression. The authors admit a pareto’s law at work: about 80 percent of revenues coming from about 10 percent of accounts. Given this fact, Anyone who has attended a quarter end financial status call is bound to be left scratching their heads over why analsyst and CFO’s make a big deal of announcing “addition of x new clients” every quarter.
The armchair investor in me was also interested the future potential: any radical business models that can replace the linear growth required by GDM and offshoring? The chapter “Most of the New, New things” left me feeling like I was gazing at a crystal ball while occasionally looking at a rear-view mirror. I guess technology forecast is an imprecise art and practitioners rarely share such insights in a book till they have successfully executed (and milked their ideas). And it is not as if I expected to be exposed to Infosys (author’s employer’s) emerging strategy.

The section on “quest for higher bill rates” explores several ideas to address the challenge of commoditization. Great account management, exploring new geographies and a shift towards consulting services are obvious approaches. The section on solution perhaps has more questions than answers, perhaps the reason offshoring firms continue to struggle in the utopian quest to sell solutions.
The authors conclude the book my musing about the “juggernaut” showing signs of slowing down. In the few years since I wrote my book on Offshoring IT Services, I continued to observe and learn a few things about the offshoring industry: especially the challenges facing the industry majors: weighed down by their own scale, lack of agility and responsiveness, the “usual” logistical issues of managing a maturing, mobile workforce, grappling with protectionism and visa hurdles in western markets. All topics that keep industry leaders awake at night but few with easy answers.

Bottomline: The book gives sufficient insights into the inner workings of the industry and a few ideas on way forward and should be of interest to marketers and wannabe’s
Five star for research, content and narrative. Overall Four stars for new insights. (Repost on Amazon.com)