Monday, June 19, 2017

BLIND STRATEGIC MANAGEMENT...DOOMS INDIAN IT INDUSTRY

No long term vision, no long term eye on the changes in the business world and now you are blaming the world. Strategic management enjoys the field of business futuristic growth where the leader’s responsibility is to get into the long term growth outlook married with changing business structures. But the fallacy of the story is that they failed bitterly in implementing the same.

The question is where they went wrong. Short term profits and wider packages created the ripple effect. They are obsessed with numbers related to revenues, profits, margins, shareholder wealth, ESOP and dividends followed with exuberance perks that they lost their vision for the changes in the industry.

They enjoyed lucrative profits since they enjoy SEZ followed with many state and central governments sops followed with a topping of depreciating rupee makes the profits of the business, top level managers perks to multiply.

We stopped software development and we jumped into service providers losing sight of the long term growth of the Industry coming from other segments. Retrenchment has become the new meaning of saving cost and amplifying revenues and perks. The industry have been shattered from a long time  from 2008 but we still remained in our cocon.

Future driven investments have been limited which resulted some college pass out candidates to come up with AI. Artificial Intelligence will replace the service industry. Well get ready for some Authors to come up with their writing where one will enjoy that traditional IT related Industries have been replaced by AI.
Low cost of production have been enjoyed by Indian IT companies who earned from tax savings from SEZ,SOP from state or centre ,Rupee Depreciation and last but not the least converting young Indians into service providers at much lesser cost.

Colleges and young generation glued to this new world of IT jobs which are actually low paying jobs. Offshore business will dry out once AI comes to replace the remaining cost savings advantages to the client. US is becoming very strong on the use of AI platform and going forward it will replace offshore business opportunities to a great extent. Failure of strategic vision and application of strategies on future driven business model is proved.
Mr. Trump is being expected to be one of the “best salesmen” for robotic automation in the software services industry. This saves billions which we earn from them.

Short term driven targets followed with exorbitant pay packages have eroded the long term growth of the Industry.IT industry programmers were converted into sales person focusing on who can get how much projects which leads to revenue. They most interesting part here is to notice how the vision of the Industry was turned into blindness and how the strategic management segment was shifted majorly into sales and business development and nothing related to new products. Innovation was restricted.

IT services companies’ turned their recruitment eyes on recruiting students from second-rung (or even the third-rung) engineering colleges as only sales was required and did not higher much from the top B-schools since the pyramid of the industry was structured differently which was suited to establishing the base of the pyramid.
The work and recruitment culture was totally fined tuned against the principles of strategic management where he largest proportion of the workforce was at the base, who were also  paid the lowest wage, and at the narrower end of the pyramid were the more well-paid jobs for the relatively few. This segment of the pyramid enjoyed the maximum benefits.

The industry required some deep minds to look into the new aspects of the Industry.  Well how the industry can gain vision when the people employed and the hierarchy developed within the industry is itself driven towards low paying jobs and no innovative thinking.

Fallacy of the industry is that they blame the quality of education whereas they recruit accordingly in different structure.

Ancillary industries grew significantly based on the growth of the Industry which was itself short sighted.
If strategic management was adopted in the business objective and long term vision of the Industry then we should have achieved innovation and AI and robotic related investments. Strategic management helps to identify the long term changes in the industry and allocate resources accordingly. But here we find that low cost resources were the only function to drive long term growth. Within next 3 to 4 years AI and Robotics will replace services which will lead to massive layoff.


I am more concerned about those fellows who are in the college levels and have invested a significant surplus into IT education with a dream of getting job where the current industry shows mass layoff. Strategic management of the whole industry have been blind.

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