Re: [silk] Bump in the road, or end of the road?

[Suresh Ramasubramanian]

For long yes – but with much thinner margins, and requiring much higher levels 
of skill, and far, far lower levels of staffing.

They [as in a generic large IT company] will need to pare themselves to the 
bone (the middle management layer is one that is bloated beyond all reason, and 
ridden with politics) before they can get better at what needs to be done.

The other part is being too process driven for their own good.

IBM theoretically celebrates so called “wild ducks” – a concept that goes back 
to the TJ Watson days.  People who are independent, innovative, skunk works 
type engineers.

Those are what a large company needs, in key positions and seeded up and down 
their hierarchy.  Unfortunately by the time they grow to the size they are, all 
the “process” (and even more of the politics and inefficiencies and ..) 
eventually become a shotgun that decimates wild ducks wholesale, or at least 
sends them winging off to greener pastures regardless of the fact that they 
might have spent the last 20+ years in the organization. 

--srs

On 22/10/16, 7:39 PM, "silklist on behalf of Sriram Karra" 
 wrote:

It is not a law of nature that Infosys and its ilk will keep making PAT in
excess of 20%+. Even if profits halve in the next 2 years to 10% - does
that constitute a death of the industry? Pai's point is is that these are
high cash flow businesses, with enough margins and buffer to keep them
afloat and going for long. Further it's *my thesis* that these companies
have enough strengths they can leverage to turn it around. Yes, there's a
lot of pain in the short to medium term and many things will need to get
reinvited - such as change of hiring strategies that many have mentioned in
this thread, but this is just a bump in the larger scheme of things.

 

Re: [silk] Bump in the road, or end of the road?

[Sriram Karra]

It is not a law of nature that Infosys and its ilk will keep making PAT in
excess of 20%+. Even if profits halve in the next 2 years to 10% - does
that constitute a death of the industry? Pai's point is is that these are
high cash flow businesses, with enough margins and buffer to keep them
afloat and going for long. Further it's *my thesis* that these companies
have enough strengths they can leverage to turn it around. Yes, there's a
lot of pain in the short to medium term and many things will need to get
reinvited - such as change of hiring strategies that many have mentioned in
this thread, but this is just a bump in the larger scheme of things.

On Sat, Oct 22, 2016 at 1:20 AM, Suresh Ramasubramanian 
wrote:

> As for Pai pointing at Infosys PAT .. they're in that moment where wile e
> coyote is perfectly safe, only he's stepped off a cliff, standing over thin
> air and just about to raise a sign that reads "help"
>
> I'm sure Deepak Shenoy can poke a few more holes than I can but .. Here
> are the rest of the numbers that blowhard / great financial genius missed
> out on
>
> http://www.indiainfoline.com/article/equity-earnings-
> result-commentary/infosys-q1fy17-consolidated-net-
> profit-declines-4-qoq-to-rs-3436-crore-in-line-with-
> estimates-116071500326_1.html
>
> --srs
>
> > On 22-Oct-2016, at 12:35 AM, Sriram Karra  wrote:
> >
> > So many thoughts on this topic... having spent 8 years in various roles
> in
> > this industry Just a few quick observations here (in no particular
> > order) on the specific challenges facing the Indian IT industry and some
> of
> > the comments in this thread:
> >
> >   - IT Services is not all about server maintenance or routine sysadmin
> >   work. Application Development & Maintenance (of bespoke systems),
> Product
> >   Engineering, Customisation and deployment of complex packages (like ERP
> >   systems), and so on cannot be automated with the current state of the
> art,
> >   nor are they dull or monotonous drudge work. I have myself worked as a
> >   contractor for Cisco, maintained critical parts of their embedded OS
> (the
> >   original IOS), developed thousands of lines of code, and new features,
> that
> >   have powered (in some ways quite literally) the Catalyst 6500, a cash
> cow
> >   for Cisco for nearly 15 years. It was a great experience to see
> engineers
> >   from humble backgrounds perform high quality engineering for Cisco
> even in
> >   its heyday.
> >
> >   - Innovation comes in all sizes and shapes. We romanticise the Google /
> >   Apple style of innovation at the expense of other forms. When my former
> >   boss, at age 34, convinced John Chambers and Cisco at its peak (mid
> 90s) to
> >   offshore product engineering work to Chennai, that was business
> innovation
> >   too. The situation now is the Indian model is so well understood that
> there
> >   are few levers left in negotiation, and the downward margin spiral that
> >   Sikka keeps lamenting about are defining the mood about the industry
> (more
> >   on the margins later). But this is not new either. Even way back in
> 2007/8
> >   it was clear to insiders that more innovation is required with the
> business
> >   models. We started talking the language of 'Fewer Better People' to
> change
> >   the customer mindset from hourly billing to more outcome based pricing
> >   models. Many companies have seen success in these endeavours. But no
> clear
> >   industry-level breakthrough has emerged, and that is a worry. Maybe it
> >   won't, but that does not mean the death of the industry.
> >
> >   - What is certainly lamentable is these companies have gotten left
> >   behind in the latest technology trends and by not paying enough
> attention
> >   to building scalable businesses. But the threat of automation and "AI"
> is
> >   somewhat exaggerated: the domestic IT demand is just warming up and
> you can
> >   be sure that journey is going to start at the bottom of the pricing
> >   hierarchy; in technology the next wave is always round the corner and
> they
> >   only need to survive till the next wave comes around;
> >
> >   - Mohandas Pai's response has some valid points. Infosys PAT was 21.9%
> >   in FY 2015-16, which is very respectable. For comparison: Google's PAT
> for
> >   FY 2015 was 21.8%. Accenture's was 12.5%. There is scope for players to
> >   change their cost structure, remove dead wood, and change the reward
> system
> >   to make them more competitive viz a viz the MNC biggies. But it is an
> open
> >   question on whether they can pull off the execution. Maybe most won't,
> but
> >   I do hope at least a few will, and we will all be better off for this
> >   shakeup.
> >
> >
> > On Sat, Oct 15, 2016 at 8:52 PM, Srini RamaKrishnan 
> > wrote:
> >
> >> Comments?
> >>
> >>
> >> http://www.livemint.com/Opinion/737W8zcjPA6lGWIajRCd6K/Indian-
> >> 

Re: [silk] Bump in the road, or end of the road?

[Sriram Karra]

Bhaskar, I can totally understand how these conversations would have gone
even a few years back. While these are the challenges, they also point to
the significant untapped strengths these companies have (knowledge of
customer's processes and levers for operational efficiencies etc.). In
these difficult times I am sure the savvy ones will figure out how to
leverage them better.

A tangential note on processes: most of IT work is related to business
processes, and that is one of the reasons I feel automation is not an
existential threat for the industry as a whole. It is just a bump.



On Wed, Oct 19, 2016 at 11:06 AM, Bhaskar Dasgupta 
wrote:

> one of the examples I had asked to be funded was to leverage their data.
> this company manages banking processes. what i wanted was to tie up with
> ISI (not that one) and hire a small skunk work of data scientists and a
> data design / visualisation centre. And then wanted to do what rolls royce
> have done with their trent engines - they make a stupendous amount of money
> by monitoring their engines on a real time basis in flight and saving
> airlines shed loads of dosh. So i would’ve provided a set of tools,
> constantly evolving, to the heads of operations on their process flows,
> heads of sales on sales analytics, heads of product design on competitive
> features, and so on and so forth. And once I have sufficient coverage, I
> can setup a banking product market place. World Domination! result? god no,
> we cant pay these phd’s that much! no? then you will lose them to american
> firms who can and will. but that will cause the pay scales to be fucked up
> internally. ok, lets spin off this firm. we don’t do spinoffs. why? 100%
> owned subsidiaries are good and actually you can IPO it as their multiples
> will be better. Oh! that decision is above my pay grade (this is the
> president of the division!) you can fuck off. /facepalm.
>
> forget about creating new products, buggers don’t even leverage what they
> have! they are sitting on a fucking gold mine of rivers of data (if you
> don’t mind me mangling metaphors) and are happy to sit there and fish for
> minnows or get paid lowly for tending the sodding river bank.
>
>
>
> > On 19 Oct 2016, at 06:06, Suresh Ramasubramanian 
> wrote:
> >
> > IT companies buying product companies in a desperate bid to innovate ..
> let us just say that I’ve seen a lot of that happen at a previous workplace.
> >
> > The usual end result is that the founders and key employees quit in
> disgust after a while and those that are left are gradually absorbed into
> the company doing something totally different than what they set out to do.
> >
> > And meanwhile the product itself is killed off immediately, or maybe
> dies a slow and lingering death with a few legacy customers left behind and
> practically zero further development.
> >
> > Big companies that don’t have DNA beyond being pushers of software that
> most if not all users have a visceral hatred for, and/or bloated services
> contracts, are absolutely not going to infuse any magical fresh DNA into
> them by acquiring successful product companies
> >
> > The prospect of such foreign DNA taking root in the company is far less
> than in the case of an organ transplant – the sort you get in mad scientist
> movies where a scientist transplants human dna / tissue / whatever into an
> ape and suddenly ends up with a super intelligent planet of the apes or
> Gorilla Grodd variety animal.
> >
> > Mohandas Pai is a smug and opinionated twit but he got one thing right
> though. The software industry didn’t die – it will survive and it will
> probably hang on, but the traditional indian (or even foreign) services
> model is long dead in favour of automation.  The only things that won’t be
> automated to a large extent are higher up the value chain than such
> companies generally play around at.   And the hanging on will be the way a
> really old and sick man keeps hanging on – perpetually in the chasm between
> Allopathy and Tirupathi.
> >
> > In other words, the days of 15% raises are dead and gone, companies
> outsourcing basic bargain basement sysadmin and datacentre work will
> outsource far less after automating the hell out of everything they can,
> testing will be automated.
> >
> > Of all the cash cows out there, telemarketing and support still needs
> humans to a larger extent and will hang on but higher up the value chain –
> because a lot of it has moved to social media, marketing rules in this
> space have tightened etc.
> >
> > And even that is going way down after all the tech support scams in
> India that flourish tarring even the legit players with the same brush,
> with at least some of the legit players looking wistfully at the “upsell”
> angle that, if pushed a few hairs farther down the line, becomes those
> scams where someone claims to be “tech support” for your OS or device
> manufacturer and cons you into paying for a 

Re: [silk] Bump in the road, or end of the road?

[Alaric Snell-Pym]

On 19/10/16 16:28, Heather Madrone wrote:

[snip]

[FX: Alaric adds Heather Madrone to list of awesome people]

>> 4) At that point, the idea of moving towards a universal basic income
>> becomes palatable. As a society, creating an environment where people
>> don't need to fight for ever scarcer jobs to survive starts to seem a
>> valid use of taxpayer's money. People can choose to just live, rather
>> than between "live to work or work to live".
> 
> Universal basic income is palatable now. We are holding so much creative
> energy down by insisting that everyone go out and hold miserable jobs in
> order to survive. Once freed of that need, people will find other
> worthwhile pursuits to fill their time.

It's palatable to me, and presumably you, and many others, but I doubt
it'd sit well with the current ruling party here in the UK or their
tabloid masters, who currently use "hard-working" as an adjective to
describe "people who deserve things" :-(

> Sure, some people will spin their wheels (at least for a time) and
> others will engage themselves in pursuits that other people don't
> approve of. Bringing a few really good ideas to fruition should more
> than pay for the ones who waste their time and the ideas that don't pan
> out.

Yes! And the savings in other areas of society would be huge. Crime,
healthcare, supporting people who can't work, housewives/househusbands
no longer being financially dependent on the worker (creating potential
for abuse), ...

> 
> --hmm
> 

ABS

-- 
Alaric Snell-Pym
http://www.snell-pym.org.uk/alaric/



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