Indian IT lead helped by quality

New Delhi: As Americans fret about cheap labour abroad, the real issue has become not one of lower price but quality and scale - India is on the move to outmaneuver its US competitors on a stunning array of fronts, says a new book.

"As more and more US firms turn to India, outsourcing has begun to shake the foundations of the American upper middle class. In a twist that highlights the new era, Americans are now even beginning to select India as the place for quality medical care, at a much lower price," says the book Rising Elephant by Ashutosh Sheshabalaya.

Starting out as service providers for American customers some 15 years back, domestic Indian software firms paid great attention to the quality of their work. By 1996, there were more software firms in India certified to ISO-9000 quality norms of the International Standard Organisation than there were in the US, says Sheshabalaya, a Europe-based technology consultant

However, the best indicator of India's quality lead is the massive lead they obtained in acquiring Capability Maturity Model (CMM) certifications from the US Defence department backed Software engineering Institute at Carnegie-Mellon University, billed as the 'global standard' for defect-free software, he says.

Way back in 1999, Business Week had warned, "If US software companies don't get with it in terms of quality -- they could kiss big chunks of business good bye. India's competitive advantage will be quality - the virtual examination of software bugs that infest US made packaged software."

A year later, a paper from University of Virginia observed that an Indian company had developed a CMM process which was better than the Space Shuttle's software. The paper also observed that this process had enabled American corporations like Raytheon to slash the cost of quality from 60 per cent of software development costs to just 10 per cent.

US insurance giant Guardian Life has outsourced 40 per cent of its application development work to India based firms and 70 per cent of that work is done offshore.

Sheshabalaya says India's overwhelming lead in software quality remains. According to figures from US Software Engineering Institute (SET), IT firms in India accounted for 50 out of 74 CMM level 5 certificates worldwide in 2003.

This is in spite of the fact that American firms made six time higher applications for CMM certification - 1671 against 238 from India, says the book.

SEI figures also show that several American software giants have their CMM level 5 facilities in India rather than in the US. This also indicates the core nature of their Indian effort and their inextricable commitment to the country. It also underscores the irreversibility of India's rise in software, says the book.

"This, then is the crux of Indian challenge," says the author.

It cites a report in Daily Telegraph , "It is attacking the US economy where it hurts, slap-bang in the middle of its technological supremacy."

"Buttressed by its unique combination of cost-effective skills and demographies, India has Wal-marted the New Economy on a global scale. Coupled to a concerted attack from these strengthening foundations on the higher value service ends of the world economy, India is showing that the western advantage might not be permanent, and its lead therefore reversible," says Sheshabalaya.

'Rising Elephant' shows that the roots of job relocation are deep, dating back to the 1980s and early 1990s, and have become entangled within a complex set of new, fast moving economic and geopolitical equations.

Any moves to cap the process will be short-lived, especially with higher value technology jobs. This structural shift is being masked by new, low-wage jobs and under-employment in the West - at least for now, he says.

Awareness about such a rising tide has been handicapped, firstly by the frenzy of the Dotcom boom years, and more importantly by hugely out-of-date perceptions about India - the principal driver of white collar job relocation, he says. The book addresses such misperceptions and explains India's changing place in a world it has begun to reshape.