Software Development in India
Wipro Technologies, a Bangalore-based company, has transformed itself from a
vegetable and edible-oils trader into India’s largest listed software services company. Today,
Wipro is winning multi-million dollar contracts from companies such as General Electric, Home
Depot, and Nokia. This year, Wipro is expected to have $392 million in revenues.
Wipro’s president, Vivek Paul, has the goal to change Wipro from a provider of backoffice code writing into a multinational firm that offers end-to-end software solutions. His idea is
to compete with IBM Global Consulting, Accenture, and Electronic Data Systems, the largest
firms in the industry. In addition, other leading Indian companies such as Infosys Technologies,
Tata Consultancy Services, and Satayam Computer, are no longer content to dominate the
anonymous but low-risk business of writing cod on contract. All are pushing upstream into more
lucrative full-service consulting. 180 of the 500 top multinationals outsource some of their IT
needs to Indian companies.
The Indian companies are facing increasing competition from such low-cost Asian
nations as China, the Philippines, and Vietnam. While a Bangalore programmer earns $800 a
month, salaries are rising 15% a year there. At the same time, such Western consulting firms as
PriceWaterhouseCoopers and Accenture are entering the low-margin coding business. In the past
two years, both companies have opened Asian software centers, in Calcutta and Manila,
respectively. Therefore, Indian companies are being squeezed from all sides.
Indian software companies now undertake a range of jobs, from helping Western clients
integrate old mainframe-based systems into new e-commerce platforms, to setting up supplychain management systems, to helping clients spot trends in data collected about their customers.
Indian programmers have built an enviable reputation. Recently, Sycamore Networks, a
Massachusetts optical networking company, needed to crack some algorithmic codes quickly.
The company turned to Tejas Networks, a Bangalore maker of optical networking equipment in
which Sycamore has a stake. Sycamore gave Tejas’ six designers two days. They did it in eight
hours.
Indian companies now want wider-ranging long-term contracts that encompass a client’s
entire IT needs. This means consulting on IT strategy as well as designing and implementing it.
The ultimate money-producer is what the industry calls “business process consulting.” This
involves advising clients how to adjust their management and work flow to mesh effectively with
their technical systems.
The large Western firms already provide numerous such services to their blue-chip
clients. To catch up, the Indians must bring in outside marketing, management, and top-drawer
consulting expertise. Doing so means Bangalore’s executives will have to transform their insular
companies into true multinationals. That is the biggest challenge – learning to run a far-flung
enterprise that includes everyone from Indian engineers to American marketers to Vietnamese
programmers.
An early American customer was Transportation.com, an affiliate of the Kansas-based
trucking company, Yellow Corporation. Transportation.com hired Infosys in 1998 to write
logistics management software. Since then, it has given Infosys more jobs. Transportation.com’s
chief technology officer says he prefers working with Infosys over the big U.S. firms because it
helped Transportation.com discover its customers’ needs and designed the software to fit. He
adds that where the big Western companies are adept at strategizing the CEO, Infosys is better at
implementation.