They may not be Infosys or Wipro yet, but when it comes to delivering on individual levels, they stand out...
Talk about the Indian IT services space and multi-billion dollar revenue churning technological machines like Tata
Consultancy Services (turnover of $4.81 billion during FY’07), Wipro ($3.89 billion), Infosys ($3.53 billion), Satyam Computers ($1.65 billion) & HCL Technologies ($1.44 billion) bob up, springing no surprises. And the rationale behind the truth being the sheer scale and stability of these bigwigs, which have showcased India’s IT prowess & have delivered on their respective promises, time and again. So with this much-touted sector reporting a combined turnover of $39.6 billion during FY2007 (a y-o-y growth of 30.7%; Nasscom report) and with forecast for FY’08 of $50 billion, India’s software productivity quotient remains a force to reckon with. However, while classical economics recurrently falters at what we call the ‘fallacy of composition’, we herein wish to make a conscious effort to understand more than what many would believe the Indian IT success story as merely ‘the whole (overall productivity) being a sum of (individual employee productivity) parts’. In other words, while most would assume that it’s the big multi-billion dollar canons where the average employee is the most productive (since the aggregate productivity is also the highest), we wish to interrupt; and in a fashion, most profound!
Yes, when the question of productivity is raised, we do not doubt that the big earners (including the top above mentioned five names) don the hat for being the most productive and deserve maximum credit for being the largest employers which provides employment to more than 7.6 million Indians, directly or indirectly (during FY’07; CII). But the canvas changes as soon as individuality is questioned; for then it’s smaller names like Sonata Software, Tulip IT Services and Prithvi Information Solutions (with total revenues for FY’07 reported in the range of $193.3-$232.5 million) which take the crown with their incredibly high Average Revenue Per Employee (ARPE) ratio. Sample this as a numerical proof – as compared to the top five above listed revenue earners which reported an ARPE in the range of $0.033-$0.053 million, the three ‘small Indian boyz in the IT-hood’ made their employees look like winners, literally! While Sonata Software reported a walloping ARPE of $0.142 million, Tulip IT Services returned a mind-moving $0.140 million and Prithvi Information Solutions filed a terrific $0.112 million – all three setting a spanking ‘individualistic’ benchmark for the bigwigs to attain!
So while numbers prove what many might doubt otherwise, here’s the real secret behind their success on the human capital front. Taking Tulip IT Services as a case in point, the company having started 15 long years back has indeed traversed those extra miles from the past. And what it carried forward in its big leap forward is its employee interests as H. S. Bedi, MD, Tulip Software, asserts, “Proficiency is the key word for the company as each employee is expected to perform. Our success has been the result of our mission statement and the objectives were very clear from the very beginning – interests of our clients and most importantly concern for our employees which would doubly benefit our company! This is the aim which has always motivated our employees.” They are known as ‘Tulipians’ and it’s the profitability factor which keeps them on their toes to achieve that minimum level of performance and display the needed level of profitability desired, all in all keeping that competitive spirit alive. Then there is the general tone of informality attached to the whole environment that makes a difference and also ensures that complex processes do not get in the way of ensuring high-quality delivery of services. To ensure that high productivity standards are maintained, Tulipians generally have monthly targets to meet with weekly checks and daily projections, which keep all employees on their toes. Surely, challenges that arise in the competitive industry help the employees to mature even more and make them stronger to deliver when the time is right, all 1,530 of them!
The storyline reads no different even when we talk about Prithvi Information Solutions wherein, there prevails a youthful and lively work culture. Even here, there is an environment of openness, transparent teamwork (which ensures that the spirit of intra-organisational competition remains alive) and a perfect set-up where Monday morning blues seem nothing but a myth! Sure enough, this proves to be that vital part of the overall corporate machinery which ensures that each of the 1,747 Prithvi employees stand accountable for the overall success of the organisation.
Talk about the Indian IT services space and multi-billion dollar revenue churning technological machines like Tata
Consultancy Services (turnover of $4.81 billion during FY’07), Wipro ($3.89 billion), Infosys ($3.53 billion), Satyam Computers ($1.65 billion) & HCL Technologies ($1.44 billion) bob up, springing no surprises. And the rationale behind the truth being the sheer scale and stability of these bigwigs, which have showcased India’s IT prowess & have delivered on their respective promises, time and again. So with this much-touted sector reporting a combined turnover of $39.6 billion during FY2007 (a y-o-y growth of 30.7%; Nasscom report) and with forecast for FY’08 of $50 billion, India’s software productivity quotient remains a force to reckon with. However, while classical economics recurrently falters at what we call the ‘fallacy of composition’, we herein wish to make a conscious effort to understand more than what many would believe the Indian IT success story as merely ‘the whole (overall productivity) being a sum of (individual employee productivity) parts’. In other words, while most would assume that it’s the big multi-billion dollar canons where the average employee is the most productive (since the aggregate productivity is also the highest), we wish to interrupt; and in a fashion, most profound!Yes, when the question of productivity is raised, we do not doubt that the big earners (including the top above mentioned five names) don the hat for being the most productive and deserve maximum credit for being the largest employers which provides employment to more than 7.6 million Indians, directly or indirectly (during FY’07; CII). But the canvas changes as soon as individuality is questioned; for then it’s smaller names like Sonata Software, Tulip IT Services and Prithvi Information Solutions (with total revenues for FY’07 reported in the range of $193.3-$232.5 million) which take the crown with their incredibly high Average Revenue Per Employee (ARPE) ratio. Sample this as a numerical proof – as compared to the top five above listed revenue earners which reported an ARPE in the range of $0.033-$0.053 million, the three ‘small Indian boyz in the IT-hood’ made their employees look like winners, literally! While Sonata Software reported a walloping ARPE of $0.142 million, Tulip IT Services returned a mind-moving $0.140 million and Prithvi Information Solutions filed a terrific $0.112 million – all three setting a spanking ‘individualistic’ benchmark for the bigwigs to attain!
So while numbers prove what many might doubt otherwise, here’s the real secret behind their success on the human capital front. Taking Tulip IT Services as a case in point, the company having started 15 long years back has indeed traversed those extra miles from the past. And what it carried forward in its big leap forward is its employee interests as H. S. Bedi, MD, Tulip Software, asserts, “Proficiency is the key word for the company as each employee is expected to perform. Our success has been the result of our mission statement and the objectives were very clear from the very beginning – interests of our clients and most importantly concern for our employees which would doubly benefit our company! This is the aim which has always motivated our employees.” They are known as ‘Tulipians’ and it’s the profitability factor which keeps them on their toes to achieve that minimum level of performance and display the needed level of profitability desired, all in all keeping that competitive spirit alive. Then there is the general tone of informality attached to the whole environment that makes a difference and also ensures that complex processes do not get in the way of ensuring high-quality delivery of services. To ensure that high productivity standards are maintained, Tulipians generally have monthly targets to meet with weekly checks and daily projections, which keep all employees on their toes. Surely, challenges that arise in the competitive industry help the employees to mature even more and make them stronger to deliver when the time is right, all 1,530 of them!
The storyline reads no different even when we talk about Prithvi Information Solutions wherein, there prevails a youthful and lively work culture. Even here, there is an environment of openness, transparent teamwork (which ensures that the spirit of intra-organisational competition remains alive) and a perfect set-up where Monday morning blues seem nothing but a myth! Sure enough, this proves to be that vital part of the overall corporate machinery which ensures that each of the 1,747 Prithvi employees stand accountable for the overall success of the organisation.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist)
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