Organizational and Talent attributes of the Indian IT industry
| Pages | 876-897 |
| DOI | https://doi.org/10.1108/ER-03-2018-0072 |
| Date | 02 August 2019 |
| Published date | 02 August 2019 |
| Author | Kelitha Cherian,T.J. Kamalanabhan |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Organizational and Talent
attributes of the Indian IT industry
Kelitha Cherian and T.J. Kamalanabhan
Indian Institute of Technology Madras, Chennai, India
Abstract
Purpose –This study is a comparative organizational analysis of the four subsectors of the Indian
information technology (IT) industry, namely, IT service (ITS), business process outsourcing (BPO), software
products services (SPS) and engineering and R&D (ER&D). The purpose of this paper is to empirically
identify the cross-sectorial attributes, organizational characteristics and the talent best suited to it.
Design/methodology/approach –Data were collected using a qualitative research design with
semi-structured interviews of 17 industry experts.
Findings –Findings suggest the re are differences in the internal organ ization of each subsector and this
influences the talent attracted toward it. ITS and BPO are perceived as customer driven sectors where
technology is an enabler t o facilitate smooth functioning of cu stomer operations. Conversely, t echnology is
the core factor that dr ives SPS and ER&D. Similar observ ations and differences in the design, environment ,
individual motives an d competencies are iden tified. The study also i dentified the inter-r elationships
between organizatio nal characteristics , task and social structu res in the IT industry usi ng Perrow’s
organizational theor y.
Research limitations/implications –The findings identify contextual dimensions and shared patterns
that exist between the subsectors. At the same time, it distinguishes each subsector in terms of observable
and objective characteristics. Significantly, the study highlights the inter-relationships between technology,
task, raw material, goal and social interactions. However, the authors stop short of framing hypotheses to test
the relationships identified here.
Originality/value –This cross-sectorial st udy delineates between the four subsectors and pro vides
a foundation for pursu ing future investigatio ns in the right directio n. This attempt to systema tically
analyze and compare all the subsectors of the IT in dustry simultaneous ly is a distinctive appr oach.
The sectorial diversity suggests a need for talent management practices that will fit the unique
characteristics of ea ch subsector.
Keywords Work environment, Information technology, Organizational analysis, Organizational theory,
Talent attributes, Work motives
Paper type Research paper
Introduction
The growth and development of the Indian information technology (IT) industry and its
success as the preferred destination for outsourcing is well-known. From an unknown
entrant to a key player in the competitive international software market, India was able to
capitalize on factors like financial attractiveness, people availability and liberal government
polices to establish its first mover advantage (Agarwal et al., 2012; Sengupta, 2011; Budhwar
et al., 2006). Some of the prominent tags used to describe the Indian IT industry over the
years are: world’s best and biggest outsourcing destination (Kearney, 2016), most surprising
economic development of the twentieth century (Tschang, 2001), premier purveyor of
software services (Kumar, 2001), leading recipient of offshored service jobs (Dossani and
Kenney, 2007) and electronic housekeeper of the world (Budhwar et al., 2006). The first wave
of outsourcing was triggered by the rapid growth of the software industry in the developed
world resulting in a global demand for skilled software professionals. India, with its
abundant pool of skilled and technically superior manpower (Bhatnagar, 2007) could fulfill
this demand through the supply of trained personnel at comparatively low costs. The next
wave of outsourcing was triggered by global corporates looking to outsource their business
process services to developing countries to gain from the various cost benefits. As noted by
Employee Relations: The
International Journal
Vol. 41 No. 5, 2019
pp. 876-897
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-03-2018-0072
Received 6 March 2018
Revised 27 August 2018
16 November 2018
Accepted 16 November 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
The authors thank Ms Keziah George for her help with the editing of the final manuscript.
876
ER
41,5
Mckinsey (2005), it was possible to offshore 42 percent of the jobs in research and
development (R&D) and automotive engineering sectors, 60–78 percent employment in
engineering and packaged software industries, 47–56 percent of IT services, software and
hardware engineering sectors and 45–55 percent of software and market research jobs in the
developed world; while Jensen and Kletzer (2005) forecasted that 70 percent of all
professional and business services could be offshored. This expansion in portfolio of
outsourcing requirements helped the IT industry expand beyond providing traditional IT
services, to ultimately capturing the market for IT-enabled services (ITES) as well. From
employing 250,000 software professionals and generating $6bn in the 1990’s (NASSCOM,
1999), the industry has grown exponentially to become a $150bn growth engine for India
with 4m employees. Further as the industry diversified, the industry body National
Association of Software and Services Companies (NASSCOM) segmented the full IT
industry into four subsectors namely; IT services (ITS), business process outsourcing (BPO),
software products services (SPS) and engineering and R&D (ER&D).
There exist numerous studies on the Indian IT industry in extant literature pertaining to
different domains (Arora and Athreye, 2002; D’costa and Sridharan, 2003; Taylor and Bain, 2005;
Upadhya and Vasavi, 2006; Lounsbury et al., 2009; Sengupta and Gupta, 2012). However, many
of these have studied the IT industry as a single entity or have focused on particular sectors like
BPO or certain niche IT functions. In particular, studies capturing cross-sectorial differences are
limited, while few or no studies have attempted a comparative organizational analysis of the
subsectors. Each subsector gains prominence as the industry is poised to grow at the rate of
$300bn in revenues and employ around 7.5m people directly by 2020 (NASSCOM Perspective
2020, 2009). Despite the growing importance of each subsector, there is very little research that
empirically identifies sectorial attributes. Moreover, understanding sectorial diversity and the
type of talent that fit into subsectorial organizations is essential as having the right talent is an
invaluable source of competitive advantage (Barney, 1991). Perrow (1967) espoused technology,
structure and function to be an excellent basis for comparing organizations.
Therefore, the study attempts a comparative organizational analysis of the four
subsectors of the Indian IT industry, namely, ITS, BPO, SPS and ER&D. Using qualitative
interviews of industry experts, contextual and work related differences are analyzed among
the four subsectors. Findings are presented through four work dimensions, namely: work
organization, work environment, work motives and work competencies. The second section
discusses the background of the Indian IT industry, organizational analysis, HR and OB
studies and the research questions. The third section pertains to the research design, while
the fourth section presents the results, discussion and theoretical framework. The paper
concludes by discussing the implications.
Background of the Indian IT industry
Organizational analysis and HR and OB studies
The uniqueness of the Indian IT industry is that it is based on outsourcing and offshoring,
born out of a need for cost and labor arbitrage in developed countries. Significant cost
differences between first world and developing countries and the availability of
sophisticated skills made a compelling case for offshoring low-end IT activities to India
(Dibbern et al., 2004). Post 2000, global problems such as Y2K, demand for ERP installation,
dot com bubble, recession and ecommerce created a shortage of qualified low-level
programmers across USA, Europe and Japan (Tessler et al., 2003). India ranking first on
employee cost, infrastructure cost, management cost and competitive tax structures was
able to position itself as a strong cost effective IT provider to the world (Sengupta, 2011).
The IT industry in India was first started in 1967 at Mumbai and soon gained momentum
during the years 1970–2000. It witnessed the start of software exports, the setting up of
software technology parks along with the evolution of offshore firms and the entry of
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Organizational
and talent
attributes
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