IT Services - India in 2020

Implications: This article is asking the most relevant question in terms of IT and ITES offshoring to India and other low cost centers. It focuses on India in 2020. It tries to explore opportunity space and challenges.

Analysis: 1. Kind of IT or ITES work done from India?
IT services will continue - both low end resourcing, project services and collaborative models and Product R&D, shift will be towards verticalized solutions specific to industries such as BFSI, HEalthcare and Retail. ITES is anyway taking a different face and shape - clinical research, clinical trials, contract research and likes of the same will improve along with contact centres, fulfillment services and managed services.

2. Operational models - extension of work from US/Europe vs. complete unit of work shifting to India:
Operational Models - All of those existing ones will remain - T&M, Project Services, ODC, Captive Units and onsite-offshore virtual project environment etc with focus changing to more work at India at a higher value chain. The factor will not only be cost but availability of very quality professionals at zero turn around time.

3. India as the 'originator' of ideas... rather than for 'labor' arbitrage:
There will be more money in hand of Indian promoters and startups and so story like iPod will not necessary move from the Indian originator at Hyderabad to Silicon Valley. There will be more Indian companies creating IP services. There will be more Indians coming back to India and start companies such as ITTIAM systems, Manthan Systems etc. Labor arbitrage will continue as it is a low hanging fruit.

4. Possible defocus from India into other geographies - China?
There will be some drift, I think towards to China and East Europe and CALA region BUT it will not be major. India will have its advantage because of the highly educated large number of English speaking engineers and scientists and their last generation promoters in Silicon Valley and India. I am not worried. We need to promote more original work rather than labor arbitrage.

5. India Headquartered IT organizations vs. Captives:
Captives may exist and will exist for companies with IT as non-core competency BUT the model will shift once they have non-IT business such as Retal, Banking etc operating in India. If TARGET starts retail store in India, Target Corp - IT captive will become the IT HQ for Target worldwide.

6. Possible broadening of services and products beyond but leveraging IT:
IT services will broaden with inclusion of new areas like Engineering related IT services, Healthcare related Managed ITOs, Bio-Informatics, Clinical trials and Research, Logistics and what not.