The article described what perhaps was an inevitable trend: declining growth of Indian IT firms as their labor costs increased, competition from other low-cost locales emerged, and Western demand for IT services slackened in an economic downturn.
But the way out of the crunch is also predictable: deliver IT services that are not only less expensive but are also better than those provided by Western companies.
That takes breakthrough services – i.e., creating innovative and superior ways of providing tech support, building Websites that provide post-sale customer service, mining customer data to identify new-product opportunities, and myriad other IT service and consulting offerings. The article said some Indian companies are taking that route (Wipro, Tata Consultancy Services and Infosys were mentioned).
The question then becomes this: How do you create breakthrough services? One long-ago-proven method is studying a set of non-IT service companies (i.e., your customers) that are exemplary in some domain – building great customer service Websites, providing excellent tech support, etc. – and comparing what they did to a set of companies that aren’t so good at the same task. Studying the key differences between these two groups then shows the IT service/consulting firm doing the research what it must do in its service -- in other words, formalizing informal practices.
This is how the reengineering consulting service was developed by Michael Hammer and the consultancy CSC Index in the late 1980s/early 1990s. It requires an investment in research that leads to service innovation. We haven’t seen many Indian IT service/consulting firms – or Western firms for that matter – make such research investments. But after the price advantage diminishes between the Western and Eastern firms, offering a superior service is what will separate the market leaders from the laggards.
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