As Senior VP (technology), what is your role in the organization?
Outsourced Product Development (OPD) companies need to continuously update for their technology competencies to provide better services and products to their customers. There needs to be an outwardly focused view of the technological trends with respect to services and tools. The identification and integration of the new technologies serves the existing and future business better and the exploitation of any particular technology becomes very strategic.
According to you, how can India emerge as a key destination in software product development services outsourcing?
Today, software is tightly integrated to business processes. As a result, large as well as small sectors are focusing on the technologies that increase their value of proposition to customers and position of their products.
The OPD industry in India is one of the fastest growing sectors in the IT industry. The key reasons for the emergence of Indian OPD services are strong domain knowledge, global exposure and brand equity worldwide. The growth rate in OPD has hidethe offshore IT services market.
According to a NASSCOM-McKinsey report, the opportunity in the products and technology services space would be worth US $8-11 billion by 2008. Also, the report estimates that OPD exports will grow from the current US $2 billion to over US $7 billion by 2010.
With the OPD industry moving into the next level of evolution, what would be the challenges that this industry will face?
The following are the challenges faced by OPD industry:
* One of the issues faced by the OPD industry is the question of Intellectual Property (IP) security. A reason customers think twice about outsourcing is the fact that they have to share the code-base of the product with another company. To help this concern, the industry will have to continually work towards developing perfect IP security measures.
* Another challenge is that of talent management. The competition for employees in the industry is intense and hence the success of individual firms depends largely on their ability to attract and retain highly skilled software professionals.
* The OPD industry in India also faces competition from larger IT-enabled Services (ITeS) companies foraying into the OPD space. The potential of the OPD industry has attracted certain ITeS companies to offer OPD as a part of their services, though they make up a small fraction of their overall focus.
What measures are available to overcome these challenges?
While talking about talent management, it is found that captive centres have a higher level of attrition. These high attrition rates result from the fact that captive centres generally receive less challenging projects and are dependant on offshore corporate decision-making. On the other hand, Indian product development firms have managed to provide broader experience, travel, and clearer career paths to employees and have thus faired better than captive centers.
Persistent Systems does this by trying to focus on two forms of recruiting, one is the exact stream of product company employees looking for a similar environment, and the other to take the brightest and best CS grads and get them into our product engagements.
What are the latest trends that you have witnessed in the OPD industry?
India offers a mix of the ideal elements that makes it an attractive offshore destination. Growth in the domestic IT market in turn drives need for sophisticated products in India.
In terms of the evolving landscape, some of the trends we are witnessing are as below:
* OPD players have started creating segments within their companies in order to cater to their opposite customer base.
* Small vendors seeking to fill in gaps related to expertise and new feature development
* Midsized vendors seeking past-release management experience and reduced time-to-market for newer product releases
* Big vendors seeking increased operational good organization, including operating limits by product lines, 24-hour development, and global delivery models
