This Recession- Its aftermath on IT Service Industry!

It’s almost been a year now since the time the ghost of recession is hunting for IT industry and its employees. Those having six years or less against their career in IT;  are probably coming across this hunting feel of ‘Recession’ for the first time ,  and  now associate   this word with - No appraisal, No hike in salary, No job-hopping chances, more on bench, salary cut and at worst, Layoff. At least  for  now, this is the impact of US economic Recession on IT Service Industry in India, as IT Service Industry in India is doing 60% of its business in US Market.

The IT-Industry has seen at least 3 small or big slowdowns in last 20 years, 1991-92 then 2000-01 and now 2008-09. Though reasons were different but impact was/is more or less same in all  bad times. And after each such bad time, IT sector has emerged more strongly with some paradigm changes in business models. So what would it be this time?

One should not be surprised if this time, it brings forth strongly the Cloud Computing, Grid Computing, SaaS (Software as a Service), Web 2.0 and larger emphasis on Open Source Technologies in IT-Market Place. Cost would be the major factor for small-timer to large corporate. Turn around time would play a vital role for any project viability. Owning a Software or a Software Service would be a crucial and tough decision a client may have to take. It would be better to be proactive about this probable paradigm changes in IT Service Industry this time.

In previous slowdowns, people in industry were talking like; we should explore market beyond US geography, we should go beyond IT-service sector, we should give more emphasis to IT-core sector, we should emphasis more on software product development, we should create domestic market for IT, and so many other this–that etc-etc. But practically how much of  it did we adhere to till this slowdown; is again a matter of debate.

When a business (mostly at mid to small level) is going smooth, or an individual  is doing well, in a particular segment of technology or domain or skill, it/one does not care to expand its/one’s horizon by geography, verticals, technologies, domains and skill as that may cost more in terms of hard-work, money, time, scared about success and some time frightened of low profitability. Thus, business or individuals generally looks for comfort zone on the name of expertise or specialization etc; ignoring the fact, that, this comfort would be proved a big trap in future.

Excluding few biggies, practice areas for most of the mid to small level IT-Companies (in India) is either Finance or Telecom or ERP or Call Center/BPO etc.; very few has multi-vertical expertise and exposures. Multi-vertical specialty would be the surviving mantra in coming days for an IT-Company. Verticals like Healthcare, Hospitality, Travel, Manufacturing, and KPO/BMP etc.; are names of few that also has tremendous opportunities in international market; but comparatively very less number of companies are working on these segments in India. These verticals also have to be explored properly with international opportunities. Mid to small IT-Companies in India have to re-prioritize their interest area and verticals for future success.

It is not the last Recession in any Economy; but business will go on. One would be lucky if he/she does not get to witness the next recession in his/her career, but sooner or later -i n the flow of time, it is unavoidable. So lesson from this ‘Recession’ would be; learn to expand your Horizon, come out of Comfort Zone and be ready in a span of time with a solid plan to minimize the impact of next ‘Recession’.

If we are ignorant of the other side of the flourishing economy, the ghost of ‘Recession’ will hunt for us time and again.

“If we deny it, we would not be able to defy it.”