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IT sector needs to get more ‘agile’

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  • Declining on-site revenues are a cause for concern. IT companies would need to switch to new-age collaboration technologies, hire locally overseas or acquire firms there

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The disclosure made by Reserve Bank of India that the share of on-site mode of delivery for Indian IT services has come down from 25.5 per cent in 2007-08 to 15.5 percent—a little lower than a sixth of total software and ITeS exports in 2018-19 should be a cause of concern.

As technology evolves, the cost of labour is no more the only factor when it comes to deliver software products. Agile methodology has today become a de facto standard for all modern software development and while it is costly, clients prefer paying for it for, well, agility.

The traditional approach called the ‘waterfall’ model is often clunky and slow, while ‘agile’ is seen as a modern and lightweight way to deliver projects. But for agile to work best, the iterations of software need to done by having everyone in the same room, walking through the solution at the same time, step by step. This means you need to be closer to client location more than ever.

This shift from remote development to active client involvement has major repercussions for Indian IT. While it can afford to be closer to the client, it is unable to do so. Nationalist fervour in the biggest markets for Indian IT services—US, UK and Australia is making on-site operations more challenging than ever.

Data from US Citizen and Immigration Services indicate that top four IT services firms — TCS, Infosys, HCL Technologies and Wipro  — have seen about half of their work visa applications getting rejected in calendar year 2018.

For TCS, the denial rate has shot up from 6 per cent in FY15 to 37 per cent in October-December quarter last year.

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