Saturday, March 15, 2008

Just In Time- IT Professionals

Many IT firms in Bangalore are looking at a Zero-Bench situation finally. The theory of 'Benching' employees was a typical IT tradition, for some years now. Companies used to recruit huge number of IT professionals in the past and keep them in the "Bench", hoping to utilise them when newer projects will surface. But with most global banking majors across the world delaying or even cancelling contracts, the situation has changed. The Indian IT providers now feel that these very Benches that were once an important asset to capitalise on new oppurtunies, are now a disposable liability. Huge "Lay-Offs" are expected in Bangalore's IT fraternity. Companies that used to show the door to the lowest performing 7-10% of their employees, will now hand the pink slip to the last 25-30%.
Industry experts decline to refer to this as "Downsizing". They prefer to call this a Market dynamics driven cost cutting exercise. Quoting Mohan Lal Menon, managing director of executive search firm Sentient Consulting.
"The message is to cut everything that's directly unlinked to revenue. The heat of the recession is already being felt among Indian providers. As a result, they are looking at all kinds of cost-cutting measures, including people-pruning,"
Productivity through right sizing is not a new thing in the Industry. I would like to draw a parrallel between this, and what happened with the Manufacturing sector, a couple of decades ago.
The Manufacturing sector, realising that productivity can be improved only through lean manufacturing, introduced the JIT (Just In Time) Inventory model. In this model no raw materials will be stocked for future use in the inventory books of any company. The raw materials will be delivered just in time when the final product needed to be manufactured. This ensured reduced cost of Inventory and hence improved manufacturing productivity.
Drawing a parrallel, I wish to replace the 'Inventory' of the manufacturing industry with 'Benches' of the IT Industry. By that logic, the only actual rationalisation of IT professionals can happen, if IT professionals were made Just In Time available when the IT company had a project in hand. This model would comprise, IT Professional vendors recruiting professionals and lending them in contract, for a huge host of IT companies, as and only when they have projects to execute. This would mean that the same professional could work for an Infosys for one particular project, and TCS for another! There will be no need for Infosys to bench employees in anticipation of projects as JIT IT professionals will always be available for contract from the vending company.
This might mean that the huge palatial campuses of IT industries will be crashed down to small offices employing only the bare minimum required, and hence saving the cost of having to maintain huge buildings and IT parks. Besides companies can do away with a host range of HR services,and employee entertainment expenses, which IT companies in Bangalore today boast of.
This is probably imminent , to stabilise Lay Off behaviours in the wake of a volatile market! For it clearly doesn't make sense to 'stock' employees when the going gets good, and 'scrap' them when the going is tough!!

1 comment:

Sita said...

It is always better to recruit people when there is some work for them rather than recruting them to show some numbers. I am sure that no one will like to stay without work. An idle mind is the devil's workshop. In order to keep employees happy and make them stick to your companies, you should give them more and more and make them feel wanted.

Thankfully this scrapping off people has not touched the core companies. Our company for instance is still taking in more and more people everyday. Touch wood! :))