Question

What are the dynamic capabilities of suppliers and customers in the Indian IT management industry?. What competencies are needed to exploit those capabilities? Can a competitor imitate those capabilities? Explain why.

Answer 1

The growth and capability building of Indian IT management industry is quite different from other countries which are master in product based development, because here driving force remains low cost software services which ranges from software maintainance to data server managements etc.

Following are the key dynamic capabilities in the Indian IT maanagement services:

Cost-Quality advantage of Human capital: Indian universities and technical institutes have been producing large number of Engineers, this growth is driven by the recruitment opportunities in Indian IT industry and it has reciprocated with the creation of "cost-quality advantage" at entry level employement as well as considered from customer perspective, global firms see same advantage and because of this ''outsourcing and offshoring" model is flourishing.

Localized learning based Process generation: Indian IT management industry has been exporting since 1984, though the speed of flourishing and revenue jump came in 90's. So, major IT companies have utilized their experience in generating localized learning process and based on that generate standard practices and processes which are being followed in those companies.

This is the reason that alomst all major IT companies prefer to provide a classroom based training program to there fresh engineers recruited from the universities campuses.

Experties of asset allocation in a knowledge economy: Indian IT management companies have mastered with the economic evolution of the country, the experties of asset allocation in a knowledge based economy. They have pioneered the outsourcing and offshoring model in software services. This model has significantly cutted down on living/operational costs in expensive western world. As and when required if the supplier is connected to receive the inputs and work on them in the time bound manner, customers have taken this positively, as it has significantly reduced their costing.

Other major dynamic capabilitied are:

Indian IT industry is build on large volume based customized software services which pushes for localized process generation

HR management capabilities, becuase in a knowledge based industry a human capital attrition means loss of a significant part of knowledge or exposing process understanding to competition.

Global operation management, where outsourcing, offshoring and nearshoring all combines up to give customer a best understanding of a connected supplier who is there to listen.

Cycle of dynamic capability of Indian IT management industry:

Acquire multinational clients

Cost advantage through outsourcing/offshoring

Process and capacity building

Learning and knowledge repository

A competitor can imitate some operational or external capabilities like copying on offshore or nearshore model easily.

But in a knowledge based economy, the core of the power is the knowledge centre of the company, their developed processes and understanding, it can only be acquired through the multiple projects in the fields and multiple attrition and post that you need capable human respurce to fine tune that as per current project requirement. and this dynamic capability is extremellly difficult to copy.