Corruption in IT sector: Time to strengthen corporate governance

 Corruption in IT sector: Time to strengthen corporate governance

Fewer organisations are pursuing criminal prosecution, but more are taking civil action against the perpetrator.

G Krishna Kumar, JUL 09 2023, 22:32 ISTUPDATED: JUL 10 2023, 02:50 IST

Recently, the news about a whistle-blower in a leading IT company helping uncover a potential Rs 100-crore ‘bribe-for-job’ scam made headlines. The management team of the IT company has taken disciplinary action against the employees involved in the bribery case while a detailed investigation is underway.

Is this a one-off incident? Certainly not. There have been several incidents in the past and almost all the cases have not become public.
For example, back in 2005, based on a tip-off, an IT company found that hundreds of software testers had been hired through illegal means. The company not only fired the perpetrator but also retrenched the hired engineers.
In another incident about 12 years ago, an investigation done by an IT company found their senior executive of outsourcing had used his family members for bribes. In a more recent incident, a senior executive was caught taking favours in ‘kind’ —
the executive received expensive gifts
and an all-expenses-paid vacation abroad for his family.    
The IT industry is perceived to be shielded from corruption/bribery when compared to other private sectors or PSUs, but the reality is different. People working in the private sector would know several such instances.

Reasons for unethical behaviour
However, the moot question remains: what is the motivation for people to be involved in bribery, especially in the private sector, when the salaries are high? 
As per the United Nations Office on Drugs and Crime report, such unethical behaviour can be attributed to rationalisation strategies employed by individuals to justify their actions. According to behavioural science, some people will cheat to gain an advantage if they are able to rationalise their behaviour and still feel good about themselves.  
The report states that several key factors like national context, company size, the nature of the company (domestic or foreign), workplace diversity, individuals’ gender identity, age, and length of tenure influence rationalisations of individuals in the private sector. There are three common rationalisations.
First, ‘everyone else is doing it’. According to this, individuals perceive that their competitors are engaging in corrupt practices and justify their actions with the rationale of securing the company’s well-being as well as their personal well-being while still feeling they are ‘good’. This rationalisation is popularly known as the “collective action problem”.
Secondly, ‘it’s not my responsibility’. Individuals rationalise corruption as being beyond their control. Typically, cited reasons for employees trying to deny responsibility are: “I didn’t know that was corruption”; “I didn’t do it for me; “I did it for my organisation”.
Third, ‘the end justifies the means’. Corruption can be perceived as generating positive collective effects because, however incorrect, it appears to be in the company’s best interests. Corruption can also be rationalised because it has positive effects for individuals, such as enabling them to keep their jobs.
Bribery/corruption cases have taken several years to be unearthed. For example, one of the cases involving a European technology company spanned over 17 years and across multiple countries. However, a recent global report, “Occupational Fraud 2022”, by the Association of Certified Fraud Examiners shows that frauds are being caught faster. The median duration has dropped by 33%, from 18 months in 2012 to 12 months in 2022.
Fewer organisations are pursuing criminal prosecution, but more are taking civil action against the perpetrator. The report also shows that 62% of the perpetrators are in roles with a higher level of authority. The percentage of cases involving corruption is on the rise over the past decade and fraudsters are collaborating more. For example, 58% of the cases in 2022 had more than one person involved, as against 42% in 2012.
This is despite a significant increase in training provided by companies to its staff about anti-fraud policies, focused training imparted to senior executives and formal fraud risk assessment. 
Early fraud detection is critical as this would serve as a deterrent for future incidences. The report shows that tips account for 42% of the fraud cases followed by internal audits 16% and management review 12%. When we will look at the sources, 55% of all tips came from employees, while over 30% of tips came from outside parties (customers, vendors and competitors).
The above data clearly shows the need to strengthen anti-corruption education and the communication mechanism to both employees as well as external parties.  In addition, a well-written code of ethics should also give guidance to employees on how to deal with certain ethical situations.
There is an overall need to improve transparency in organisations. Maybe companies should identify divisions within their organisation with a high possibility of bribery and conduct regular forensic audits to rule out wrongdoing. Although such audits would involve cost, they
are needed for maintaining transparency and discipline.  
Considering the overall digital awareness in society, it is not surprising to see crypto currencies being used in fraud cases. This means companies need to be up-to-date on policies and procedures while conducting diligence in the value chain (employees and third parties).
People found guilty must be blacklisted. How about creating a forum for sharing incidents, learnings and best practices for detecting frauds? Technologies like Artificial Intelligence and machine learning can be an ‘assistant’ in fraud prevention, as the algorithms would be able to flag potentially fraudulent or corrupt activities.
The current ‘bribe-for-job’ scam should serve as a wake-up call for the entire private sector. Companies should strengthen training, governance, transparency and disclosures. 
(The writer is an ICT professional and a columnist based in Bengaluru

Quiet quitting and moonlighting are real - workplaces need to adapt

Quiet quitting and moonlighting are real - workplaces need to adaptFor enabling a smooth transition, all stakeholders need to accept and demonstrate maturity, build a transparent, robust policy that works to everybody’s advantage 

G Krishna Kumar, SEP 27 2022, 22:57 ISTUPDATED: SEP 27 2022, 23:17 IST

IT major Wipro sacking 300 employees for moonlighting is making headlines in India. Globally, social media is abuzz with two trends in workplace: ‘Quiet quitting’ and moonlighting. ‘Quiet quitting’ is about keeping one’s job, just doing bare minimum work to be employed and meeting performance expectations. The idea is to use the after-work hours to earn money by moonlighting. Moonlighting is defined as having a second job, typically secretly, while keeping the primary job. The name moonlighting was coined in the US to depict work after regular office hours.

While the terms have gained popularity now, both moonlighting and quiet quitting have been followed as ‘side hustle’ and ‘checked out’ respectively in the past. For example, professionals like doctors, lawyers, and teachers holding primary jobs along with a personal practice has been long accepted. Corporate employees involved in multi-level marketing is also well known.
Is moonlighting or dual employment, a problem? Yes, especially if the second job is related to the primary job. Dual employment is an offence due to confidentiality breach. For example, A Bengaluru-based IT company has found that an employee was illegally employed in more than two of its competitors. Several such cases were found over the past 30 months and almost all the employees have been terminated.

Reports suggest that only one-third of employees consider themselves ‘highly engaged’ at work. Lack of engagement among the rest may be because of job insecurity, lack of job satisfaction, lack of respect/recognition or rewards/remuneration or poor work-life balance.

Since the pandemic, both quiet quitting and moonlighting have become easy as people find themselves productive working from anywhere and saving 2-3 hours of commute time every day.
A recent news report states that a survey of 400 IT professionals in India revealed that 65% engaged in moonlighting while working from home. Another report states that 70% of those surveyed said that side-hustles are the real shot to fame and 69% shared that they would want to earn from their hobbies.

Moonlighting clauses are added to employment agreements; violation of these clauses amounts to confidentiality breach and conflict of interest. They could use the IP, tools, and processes from their primary job in the second job, which is legally, and ethically, wrong. The other ethical question is does moonlighting deny opportunity for the unemployed or underemployed?
A recent report states that 34% of the working population in the US have a ‘side hustle’. Though dual employment is not banned in the US, Australia and other countries, many workers hide their second job from the primary employer. A recent Mckinsey report in the US shows a rise in independent workers from 27% in 2016 to 36% in 2022. The key reason citied is the autonomy and flexibility of freelancing.

European Union has adopted a directive in 2019 that requires EU member states to ensure that an employer can no longer prohibit an employee from working for another employer or for themselves outside of agreed working hours. The goal is to lower the threshold for workers to engage in other work, on a payroll or as self-employed persons, in addition to their existing work. The Directive allows the member states to set conditions under which an employer can continue to place restrictions on an employee having multiple jobs.

The Netherlands has recently implemented rules that would stop employers from banning their employees from taking up a second employment or doing voluntary work, with the aim of making it easier to combine different jobs.
While Indian companies are in a dilemma over moonlighting, IT major Infosys has warned its employees that moonlighting could lead to termination. On the other hand, online food delivery company Swiggy announced a moonlighting policy allowing its employees to take up projects outside of their regular work. In general, are organisations ready to accept and respond to the shift towards side-hustling?

Firstly, companies should address quiet quitting through a positive work culture that enables right job fitment and work-life balance. Providing a career roadmap and helping individuals cross-skill or upskill will help motivate workers and improve productivity.

Conventionally, moonlighting is considered a breach of trust. Going forward, there is a need for a framework for ethical moonlighting with representation from all stakeholders including labour department, industry bodies, companies and employee representatives. Companies should consider categorising employees who will be allowed/disallowed to moonlight depending on their role and type of work. Differentiated perquisites between the two category could be used. Moonlighting policies and awareness campaigns should be created. The policy framework must allow flexibility for employees and set clear performance goals, while clarifying on the confidentiality aspects. This would foster a healthy environment and a win-win for all concerned.

The present labour laws need a relook. For example, Shops and Establishment Act (S&E) in India does not allow dual employment. It is also unclear how PF, gratuity and employee insurance would be handled in cases of dual employment. How will a ‘background check’ be conducted in case of multiple employment?

Sooner or later, moonlighting needs to be accepted as a reality. For enabling a smooth transition, all stakeholders need to accept and demonstrate maturity, build a transparent, robust policy that works to everybody’s advantage.

(The writer is an ICT Professional and columnist based in Bengaluru)

Great expectations as govt looks to reshape e-commerce landscape with ONDC

ONDC is a not-for-profit, open e-commerce platform that aims to provide a level playing field for all types of sellers

G Krishna Kumar, JUN 05 2022, 22:16 ISTUPDATED: JUN 06 2022, 07:33 IST

Buoyed by the success of several digital initiatives in the country from Aadhaar to Co-Win and UPI transactions, the Union government has embarked on an ambitious project “Open Network for Digital Commerce” (ONDC).

ONDC is a not-for-profit, open e-commerce platform that aims to provide a level playing field for all types of sellers, from kirana stores to retail chains and even larger e-commerce players.

The pilot phase of ONDC was kicked off recently in five cities (Bengaluru, Bhopal, Coimbatore, Delhi-NCR, Shillong) with 150 sellers, and over the next 6 months the footprint is expected to increase to 100 cities across the country with over 3 crore sellers. Reports suggest that there are 1.2 crore kirana stores in the country and just 15,000 of them are e-commerce enabled.

Online retail Gross Merchandise Value (GMV) has tripled over the past 5 years and yet it represents just 4.3% of the total sales in the retail segment. In comparison, e-retail as a percentage of overall retail sales in South Korea, China and the UK are at 26%, 25% and 23%, respectively.

A recent report indicates that the e-commerce market is predicted to increase from an estimated $75 billion by 2022 to $350 billion by 2030. It must also be noted that Amazon and Flipkart account for about 60% of the e-commerce market in India. Can ONDC seize the moment in the retail space?

As of now, large players like Amazon, Paytm etc have created apps/portals where buyers, sellers, logistics and payment are integrated onto their platform. Thus, a customer who is connected to one app or portal (say Paytm) can buy goods from that portal alone. If the buyer wants to buy from any other app (say Amazon), he/she has to log into the app and buy goods. Presently, all the e-commerce players have a centralised approach. ONDC on the other hand has a decentralised network approach. Here, the same Paytm platform can be used by the buyer to search for a product. Instead of seeing just what is offered by Paytm sellers, the buyer can choose from a variety of sellers: it could be from a nearby kirana store or from other established e-commerce players. This gives freedom of choice for the buyers and sellers as well. Most importantly, the buyer can buy goods or services without logging into different e-commerce portals or apps.

The buyers and sellers can transact irrespective of the platform or application they use to be digitally visible. Such a public digital infrastructure enabled by ONDC can potentially disrupt hospitality, travel, food delivery and mobility segments in addition to the retail segment.

The ONDC is based on an open protocol called Beckn, which allows interoperability of a wide variety of buyers and sellers. This effort to standardise all aspects in the entire chain involving various entities for exchange of goods and services is much needed as it would enable seamless experience for all the participants within the ONDC network. The platform is expected to perform the role of an enabler for e-commerce expansion and to be a market- and community-led initiative instead of being a regulator. Most importantly, such an open and decentralised network would certainly spur innovation.

It aims to work on three key aspects: dynamic pricing, inventory management and optimisation of delivery cost, and thereby bring down the cost of doing business for all players, including retailers.

Several technology startup companies have already started working on ONDC. To provide long-term vision and support for the initiative, private sector banks (HDFC, Kotak, ICICI), public sector banks (SBI) and financial institutions like BSE and NSDL among others are jointly owning ONDC. Several news reports indicate that many private banks, tech giant Google and FMCG companies like Dabur, ITC and Unilever are likely to join the ONDC network.

One of the biggest challenges ONDC will face is to replicate or better the existing user experience and quality of service provided by leading e-tailers in the country. As the e-tailers own the end-to-end system, they are able to provide assurance on the quality of products and timely delivery. ONDC would need to include the right checks and balances to create predictability in the decentralised system.

In addition, a strong grievance redressal and dispute resolution mechanism must be in place for earning the trust of buyers and sellers alike. While some of the big e-tailers provide local language support in their portals and apps, ONDC could play a significant role in language localisation, voice- based search and better user experience.

There were several unsuccessful attempts to digitise kirana stores in the past. Lack of success can be attributed to technology that was still evolving as well as low-speed internet, high mobile data tariff and low awareness amongst kirana store owners. Right now, India’s 4G data charges are among the lowest in the world at $0.68 per GB. In addition, availability of cheaper mobile phones will help in onboarding users onto the ONDC ecosystem. Awareness among local sellers, however, holds the key to success. Most importantly, established e-commerce players participating in the ONDC initiative will be a win-win for the overall ecosystem as India tries to catapult into the digital commerce space. Can ONDC replicate the success of UPI, where the banking sector actively participated? It will be a challenge, but with active participation from stakeholders, there is hope. 

(The writer is an ICT professional and a columnist based in Bengaluru)

It is easier now to start a new business

G Krishna Kumar, NOV 16 2021, 23:32 ISTUPDATED: NOV 17 2021, 05:44 IST

It is easier now to start a new business my experience in setting up an IT company back in 2009 and now in 2021 throws some interesting perspective on the changes

The World Bank has decided to stop publishing the “Ease of Doing Business” and “Ease of Starting Business” reports from this year. The last report on Ease of Starting Business ranks India at 136th position in 2020. While India could improve further, my experience in setting up an IT company back in 2009 and now in 2021 throws some interesting perspective on the changes.    

 

Ease of setting up business: The Company name approval is the first step for registering a business. The process of name approval used to take 15-20 days back in 2009, now it just takes one day. Back in 2009, the name approval was handled by the state government’s Registrar of Companies (ROC), while now it is centralised.  
A major improvement is the existence of a single-window during the company incorporation. This allows for Provident Fund, Professional Tax, ESI, PAN and TAN accounts to be created instantly at the time of incorporation.
Unlike earlier, there is a greater emphasis on self-governance and self-certification with higher penal provisions. The accounting and labour compliances have been simplified now (based on the Companies Act, 2013) as against the Companies Act 1956 used as the basis in 2009.  Labour laws have seen improvement with PF, ESI, Shops and Establishment Act provisions going completely online. The new Labour Code is expected to further simplify compliances.     
Thanks to the Digital India initiatives, video KYC and online application completely removes the need to visit any government office for the whole incorporation process. Is that not wonderful? Company incorporation used to take three months back in 2009 and now it is just about 4-5 days.
Can the turnaround time be further improved? Certainly possible. If we benchmark against New Zealand, where business incorporation takes just half a day, that would be a boon.
Unlike in 2009, nowadays the moment the company is incorporated, non-stop unsolicited calls and emails from at least a dozen private banks follow.
The banks are aggressive in selling why they are the best compared to the competition. Interestingly, the public sector banks don’t figure in this. It is unclear as to how the banks gain access to the contact details. In any case, this experience is certainly not desirable.   

Infrastructure and “anything” as a service ecosystem: The communication infrastructure has seen significant improvement with 5-10 Mbps speed being premium back in 2009, while now 500 Mpbs is a norm for corporate usage.  The other big difference is the type of physical infrastructure.
Unlike earlier, now anything that a business would need is available as a service. This helps the company to focus on core activities while all the non-core/ hygiene activities can be outsourced.  For any company setting up operations in India, managing physical infrastructure would be a major task – this includes the building, security, facilities management among others.   
“Workspace as a service” is the one-stop solution for this. Managed workspace or co-working space has gained popularity as they offer attractive options with flexibility. Similarly, several companies offer HR as a service, recruitment as a service, finance/compliance as a service. This ecosystem provides a great impetus and encouragement for new companies to be established.  

Attracting talent has become tougher: With the IT industry in India doubling over the past 12 years and several MNCs setting their shop in the country, this has meant that the techies have no dearth of options to pick the “right” opportunity.
A recent report from staffing firm Xpheno states that several Indian IT companies have registered an annual net headcount growth of 15-25% over the past five years.
The report also states that 900+ tech startups have received over $27 billion in funding and the spend on tech talent is at an all-time high.  In addition, expansion hiring from existing tech companies has spurred demand for tech talent. On the talent supply side, there is a surge in job seekers now as most job seekers avoided job change last year due to the pandemic.   
We are witnessing nothing less than a war for talent and it is indeed a job seekers’ market. Companies are offering huge salaries, perks like Employee Stock Options (ESOPs), joining bonuses, flexibility to work from anywhere, and even fancy titles to name a few.
Most candidates have 2-3 offers in hand and are constantly looking for “better” options. The current demand-supply mismatch could make India become uncompetitive and some work may move to low-cost countries.
However, no other country can supply 3 lakh fresh engineering graduates in software and related disciplines. Notwithstanding the current challenges, India would continue to be the prime destination for technology companies as the sheer size of the talent available in the country is unprecedented and hard for other countries to match.
Summing up, the ease of setting up a new business has significantly improved over the past 12 years. The ecosystem for supporting new companies to establish their operations has also been a great positive change.
Talent acquisition has become tougher compared to 2009 due to significant demand-supply mismatch, but then India still accounts for the largest pool of highly skilled technology talent in the world. New technology companies will continue to find India attractive!  
(The writer is an Information and Communications Technology professional based in Bengaluru)

 

Should kids code or not?

 G Krishna Kumar, NOV 18 2020, 02:31 ISTUPDATED: NOV 18 2020, 03:37 IST

Read more at: https://www.deccanherald.com/opinion/panorama/should-kids-code-or-not-916938.html

Recently, my relative from the temple town of Sringeri called me and her first question was, “what is this coding?” This would perhaps be the question with any parent with young kids, after seeing advertisements that persuade children to take it up. Unable to comprehend, they are worried that their kids are deprived of something and likely feel apprehension for being left out. Let us remember that these are the same parents who are proud of their kids’ ability to demonstrate “smartness” by effortlessly using smartphones.

Before we delve into whether parents need to push their kids into coding, let us understand the meaning of coding. Coding is a technical word for computer programming. Coding is a process by which source code for computer programs are created and maintained. All the computer and mobile applications that we often use, are a result of coding using various programming languages.

Can anyone with no computer background pickup programming? The answer is a resounding yes. There are various online tutorials that can teach the nuances of programming. This is exactly the way someone can pick up Kannada or Malayalam with the “Learn a language in 30 days” type books. The depth in understanding the language ( spoken language or programming language) will be missing.
Of course, Computer programming is an important subject and even the National Education Policy 2020 has emphasized the need for early exposure to children on computers and technology. As per MHRD website, India has over 12 crore students in the first to 10th standard bracket with over 6 crore in the 10-15 years age group. Do we want these kids to become programmers at the age of 10 or 12? There is much more to life for these young minds than coding. The NEP is envisaging holistic development of the future generation. Let us get the priority right. We need to provide a strong foundation on cognitive skills or life skills for the young kids to become effective in their life and career. We don’t need crores of coders.

Let us face it, a good software engineer will go through four years Engineering course work on computer systems and related areas. In addition, a Master’s degree with a specialisation in Artificial Intelligence or Data science can also be pursued. Of course, there are cases where non-engineering students too have fared exceedingly well in the Software Industry, but then those are exceptions.

We have a great ability to identify a trend, exaggerate and create a mess. Remember how engineering colleges across the country piggybacked on the IT Industry wave? Jobs in the IT industry started picking up during the late nineties and we witnessed hundreds of engineering colleges mushrooming across the country. What is the result of this? We ended up creating lakhs of poor quality and unemployable Engineers. These students end up taking-up non-engineering jobs or would need some bridge courses (read 12 to 24 months) for them to make an effective career in the software Industry. It is no wonder that many colleges have already shut down during the past decade. Perhaps there is a lot to learn from the Engineering colleges example. With the current momentum to outsmart each other, hundreds of ed-tech companies will start claiming that they can create the best coders in the country. We may end up with lakhs or crores of “kid coders”. This is certainly not desirable.

We must allow our next generation to gain a holistic perspective during their formative years. The new education system will provide the necessary exposure for software programming, but we should not mindlessly push children into it. The passionate ones will pick up skills and emerge as world-class coders.

(The writer is an ICT Professional and columnist based in Bengaluru) 

Lessons to learn from IT industry's current turmoil

G Krishna Kumar, Jul 11 2017, 0:03 IST
A recent news report indicating grim outlook for the Indian information technology industry this year, adds to the negative news flow on the industry. This comes in the backdrop of reports suggesting that one lakh IT employees could be laid off. “Uberisation” (a new term coined to indicate freelance work as opposed to permanent jobs) of workforce has just added to the anxiety amongst the techies.

Despite the current turmoil, IT jobs are still the most sought after. The IT industry provides employment to 40 lakh people, or 5-6% of the organised workforce. It also provides indirect employment to about 1.4 crore people.

The layoffs are attributed to the possible reduction in IT outsourcing and the need for highly productive work force (weaker hands fall aside). Further, the threat of automation (robots taking over jobs, leaving many people jobless) just adds to the uncertainty.

Also, the challenge faced by IT companies to remain profitable, where the average salary has gone up by two to 2.5 times over the past 15 years. However, the revenue that the organisation generates per engineer has remained constant or in most cases has dropped over 25% during this period adding to the woes of the industry. 

The IT industry had witnessed two major downturns in the past — the dot com bubble of 2000-01 and the global recession of 2008-09. Will 2017-18 be the next major downturn? May be it is a sheer coincidence that every eighth year the industry witnesses a downturn. 

The good news is that in both the previous two cases, the sector demonstrated resolve and grew post the event. Incidentally, IT Minister Ravishankar Prasad has categorically denied any IT downturn now and predicted an addition of three million workforce into the industry over the next five years.

With the fast-changing technology landscape, employees can become redundant rather quickly if they don’t reskill themselves. But then, reskilling is not new to the Indian IT industry. During 1998-99, thousands of people trained themselves on Y2K, and post 2000-01 the same set of people learnt and adapted to newer technologies.

Over the past few years, easy access to broadband internet coupled with the availability of online platforms for learning like online video tutorials, the MOOC (Massive Open Online Courses), mobile apps etc, has definitely helped the motivated and self-driven employees to reskill themselves.

Over the past 1-2 years, many companies have undertaken large scale re-skilling efforts to ensure the employees stay relevant. A report from the IT industry body Nasscom indicated that 40% of India’s IT work force must reskill themselves. It has also identified 55 new job roles across various technologies. It is predicted that 50-60% of the skills will be around the new technology areas. 

It is not just about reskilling, the need for competent and highly productive people is even more important now as the knowledge level required is high in order to meet the customers’ time-to-market requirements and to drive innovation. A highly productive team would mean fewer people and faster completion of tasks. 

Over the past 15 years, software automation has helped in improving efficiency, especially in the areas of software testing. Availability of productivity/collaboration platforms is allowing people to work from remote locations. Here, uberisation can play an important role by addressing the supply of expertise just-in-time. However, this needs maturity from the organisation as well as the freelance experts.

While the IT industry finds its way through reskilling and uberisation, we have a problem with the talent pool from engineering colleges. Sample this: 3,000 engineering colleges, eight lakh students passing out every year, 55% of the students aspiring for software employment while only 3% of them are ready for such jobs.

Mindless mushrooming of engineering colleges over the past 15-20 years piggybacking on the IT industry has resulted in a near catastrophe in terms of quality of engineering graduates. The Ministry of Human Resource Development should tighten entry criteria for students entering into the engineering stream while some serious action is needed to upgrade the infrastructure and teaching staff in the colleges.

The other area of focus should be on industry exposure to the students. We need a sustainable model that can encourage industry-academia co-working and can add value to the students.


Alternative industry
India’s over-dependence on the IT sector for employment generation must stop. The biggest challenge is that we don’t have an alternative industry that can offer employment to a large pool of people.

While we are proud of the demographic dividend, with India set to become the youngest country by 2020 with an average age of 29, job creation is going to be the biggest challenge for the country. We need alternative industries, be in manufacturing, infrastructure or agriculture to pick up and thereby enable large scale employment.

In addition, to benefit from demographic dividend, encouraging entrepreneurship is much needed. In advanced countries, it is established that entrepreneurship has a strong correlation with job creation. Entrepreneurship is still a developing theme in India. Many educational institutions have started entrepreneurship cells or E-cells to inspire students, but the success rate has been patchy.

The National Entrepreneurship Network is supporting the Pradhan Mantri Yuva (Yuva Udyamita Vikas Abhiyan) Yojana under the Ministry of Skill Development and Entrepreneurship for formally teaching entrepreneurship. The government’s Mudra scheme for encouraging entrepreneurs has resulted in over seven crore people getting loans totalling 3.2 lakh crore. This is a step in the right direction but awareness campaigns on the employment generated through this scheme is needed to attract youngsters to embrace entrepreneurship.

While the IT industry is attempting to come out of the current turmoil, we need a robust ecosystem that goes beyond IT if India has to benefit from demographic dividend.

(The writer is Adviser, Centre for Educational and Social Studies, Bengaluru)

Internet addiction’s a public health issue

G KRISHNA KUMAR

Hindu Business Line 16th july 2016, Page 8, EDITORIAL PAGE

Japan and Korea are grappling with net-induced intellectual and emotional disorders. Why fall into that trap?

The telecom and IT minister recently announced that India will soon have half-a-billion internet users. That’s an unprecedented achievement considering India’s struggle to add internet users just 5-8 years ago.

As a result of easy access to WiFi, intuitive user-experience through touch screens, and availability of affordable mobile and tablet devices, internet usage is poised for a dramatic rise in the coming years. Although India’s mobile data consumption is just one-tenth of that in the US and other advanced countries, we are witnessing challenges due to the overuse of internet, especially among youth and children.

Sheer overuse

Studies have revealed that constant internet use results in reduced creativity, reduced ability to remember, and significantly hurts long-term memory. Another study shows that internet users get increasingly impatient. The psychological impact due to constant use of internet and mobile phones has been researched for many years. The anxiety among those who use their phones for email and social networking activities is known. For instance, ‘always connected’ people are nervous when the battery runs low.

Not surprisingly, ‘online anytime’ people get stressed in a no-internet zone. Of late, we have begun to accept mobile phones/tablets and other gadgets as replacements for kids’ toys. Indeed, parents often boast of their kids’ ability to use smartphones with ease.

According to a study, the addiction problem in India is real and at least 24.6 per cent of adolescents have problematic internet use or internet addiction disorder (IAD). A report by the Indian Council for Medical Research says that 12 per cent of individuals using internet in the country suffer from this problem.

The problem’s growing

Internet addiction is a growing problem world over. Japan, known for its early adoption of technology, was among the first to recognise the challenge of IAD. It is estimated that over 5 lakh children in the 12 to 18 years age-group are victims of screen addiction. High school students spend over six hours during weekdays and, in many cases, skip school to be online.

Japan’s education ministry has started internet fasting camps where the affected children are asked to spend time on physical activities. The intention is to help them get away from the online/virtual world and encourage them to have real communication with other children and adults — basically, teaching them the importance of human relationships. The Japanese government claims that the fasting camps have been successful because they motivated children to spend much less time online.

South Korea, another technologically advanced country, considers internet addiction a public health crisis. ‘I Will’ centres have been set up in Seoul. These are intervention institutions for internet and smartphone addicts among children and youth below the age of 24. They are provided counselling, preventive education, and alternative activities.

India’s premier mental health institute, the National Institute of Mental Health and Neurosciences (NIMHANS) has set up an internet de-addiction centre for healthy use of technology. A similar centre has been set up in a few cities. But considering that millions of Indians are either already or likely to be affected with IAD, shouldn’t there be many more such centres across the country?

Government help

India has the youngest population in the world but the demographic dividend we are so proud of could soon vanish if we don’t inculcate the right habits among gen next. India’s culture which revolves around strong family bonding is expected to address the issue. Yes, it can, but with low awareness of the IAD issue, we need multiple initiatives. Today, most of us do not accept that the problem is real.

India needs a strong framework for tackling IAD. This is a good opportunity for the telecom, human resources, health and AYUSH ministries to join hands and come up with suitable actions before the problem becomes an enormous issue. The ministry of health and family welfare should consider creating a pan-India initiative similar to the National Addictions Management Service (NAMS) created by the Singapore government. Under NAMS all types of addictions are brought under a single umbrella.

We need a multi-pronged awareness campaign directed at different age groups. The Government should embark on an awareness drive aimed at educating the public on the main symptoms of internet addiction. The AYUSH ministry could consider providing intervention programmes for people who are already found to be addicted to the internet.

The HRD ministry should consider mandatory training for school and college staff, who in turn can educate students on responsible use of the internet. The main focus should be on improving children’s cognitive skills and thereby nurturing creativity. Schools can play a supportive role by educating parents about symptoms and possible actions.

Can the telecom ministry ask internet providers to run regular campaigns educating people about internet addiction?

In an increasingly connected world, we cannot shy away from the internet. However, we need a strong framework in the country to educate the public on the symptoms of screen addiction and provide intervention mechanisms. We don’t want IAD / screen addiction to spoil our demographic dividend.

The writer is an adviser to the Centre for Educational and Social Studies, Bengaluru. The views are personal

(This article was published on July 15, 2016)

India's sub-standard engineering colleges

G. Krishna Kumar

Hindu Business Line, Editorial Page, June 10th

Engineering education remains IT-focussed and needs a broader framework with industry participation.

The world’s top 50 universities in engineering and technology in 2013 do not include any Indian university/college. The Higher Education World Reputation Ranking 2013 of top 100 institutions, has representation from all the BRIC countries, except India. We can conveniently blame it on bias, or simply ignore the global ranking. While the Government-run institutions have their share of challenges, the private institutes/universities, perceived to be a ray of hope, appear to be less interested in improving quality.

Employability, a challenge

Now, let us juxtapose the lack of quality institutions with another dimension — un-employability. There are over 2,500 engineering colleges in the country, producing over 7 lakh graduates every year. Notwithstanding the unpredictability, the IT Industry has remained the largest job provider over the past 15-20 years, absorbing about 10-15 per cent of the graduates. Hiring by public sector and non-IT private companies, and students pursuing higher education constitute 25-30 per cent. But, that still leaves a significantly large pool of engineering graduates without a proper job. The Industry Readiness Index 2013 survey by PurpleLeap, a company that provides skill bridging support for students pursuing engineering courses, indicates that only 10 per cent of the engineers passing out of colleges from Tier 2/3 cities in the country are employable. Even with the intervention programmes, the students struggle, primarily due to poor communication and/or analytical/problem-solving skills. Even worse, another report states that 30 per cent of the engineers do not have basic quantitative skills required for day-to-day life and entry-level engineering jobs.

India lags way behind China in terms of university research in engineering and technology. China, for example, has three times more enrolment for master’s programmes in engineering and management. India produces 1,000 PhDs annually in technology and engineering, compared to 8,000-9,000 in the US and China. It has to be noted that US and China have large well-funded universities that encourage higher education. The 2011 Kakodkar report emphasises the need for rapid improvement in research infrastructure in India, including the IITs.

So, what needs to be done to improve the situation? It is evident that active involvement and collaboration between government, engineering colleges/universities and industry is vital for improving the quality of engineers.

To fill up the vacant seats in private engineering colleges, the cut-off score for students seeking admission is being considerably watered-down. Added to this, many private colleges lack the intellectual infrastructure — comprising libraries, broadband connectivity for accessing knowledge resources on the Internet and, most importantly, qualified and knowledgeable faculty. Strict regulatory mechanisms should be implemented to ensure that only institutions with proper infrastructure are allowed to function.

Strict regulations

Simple things like monitoring the output from internship/project work should be strengthened. Strict measures are need for removing the rampant “paid” project work culture that is in vogue. It is appalling to see students get away by outsourcing their work.

The next most important step is to provide a clear road-map for the students with an inclination for research to pursue their interest. This would help in retaining the research-seeking graduates from going abroad. The effectiveness of government-funded schemes to promote research among engineering students through the Modernisation and Removal of Obsolescence (MODROBS) and the Research Promotion Scheme (RPS) is still unclear.

We need an environment that fosters active partnerships between industry and colleges/universities. In the advanced countries, research work is given high priority among the engineering colleges/universities. The teachers can lead by example and inspire students to pursue research and innovation.

The duration of the engineering course can perhaps be increased by six months or a year. This can help accomodate a sandwich/apprentice programme, which can provide hands-on work experience. For example, today, students get selected for project work/in-plant training through personal contact.

A transparent platform for monitoring and evaluating apprentice programmes should be created by involving industry — including private and public sector, and the universities. The Government’s latest initiative towards skill improvement through the National Vocational Educational Qualification Framework (NVEQF) is certainly a good step. However, it may be worthwhile strengthening the existing well-funded National Skill Development Corporation, than creating new initiatives.

Look beyond IT

Although Nasscom predicts significant requirements in the IT industry over the next decade, it is vital that the Government looks at supporting altervative sectors and creating an efficient platform to manage the demand and supply of engineering graduates.

Reports indicate that manufacturing sector would grow significantly by 2025, fuelled primarily by the emerging economies. This could be an opportunity for India to take on China and emerge as a dominant player in, say, energy or semiconductor sector.

Why can’t government policies and best practices that helped in rapid growth of the IT industry be replicated in strengthening other sectors? AICTE/universities should upgrade the syllabus to be attuned with industry needs, especially in some of the core areas such as electrical and mechanical engineering.

It is, thus, imperative for the engineering education to grow beyond IT industry. A strong push is needed for strengthening industry-academia interaction in all the major sectors/streams. This would certainly spur innovation/research and help in improving employability among our next-gen engineers!

(The author is Vice-President, Symphony Teleca. The views are personal.)

(This article was published on June 10, 2013)

Addressing IT's workforce woes

G Krishna Kumar | Updated: Apr 27 2012, 02:06 IST

NSDC could play key role in driving essential skill enhancement initiatives

Over the past 15 years, the IT industry has come a long way, witnessing unprecedented ups and downs and yet remaining one of the sectors with hope. Nasscom has predicted significant growth by 2020. To meet such large growth, India needs to develop its talent pool right at the universities.
With an about 25 lakh workforce, the Indian IT sector represents about 6% of the organised sector. Nasscom predicts the IT workforce will touch 30 million by 2020. Being heavily people-dependent, the biggest challenge for the industry will be to find the right quality engineers.
A recent national employability report states that only 20% of the engineering graduates from colleges are really employable in the IT industry. If a similar study was conducted 15 years back, the percentage of employable engineering graduates in the IT industry would have been much higher, as the industry was not as mature and expectations were comparatively low.
It is not surprising to see lower employability impacting admissions into engineering colleges. Reports indicate that there are no takers for engineering seats in many colleges. Further, over the past few years, engineering graduates from core domains like mechanical or electrical are reluctant to take IT precisely due to the same reason. In fact, many private colleges lack the intellectual infrastructure--broadband connectivity to access knowledge resources on the internet, libraries, and, most of all, a qualified and knowledgeable faculty.
A recent news report suggests that there are about 3,000 engineering colleges in India. Over 10 lakh students are admitted into engineering colleges every year. Essentially, the problem of quantity is addressed, however the challenge in terms of quality of engineers remains. What could be done to improve the quality and skill of our engineers?
The Indian education system needs an environment that fosters active partnerships between industry and colleges/universities. In the advanced countries, research work is given high priority among the engineering colleges/universities. Research activities help the students to think out of the box and also are supported by the industry through grants.
As per the Dr Anil Kakodkar Committee report in 2011, India lags way behind China in terms of university research in engineering and technology. India produces 1,000 PhDs annually in technology and engineering, compared to 8,000-9,000 in the US and China. Why? Unlike India, both the US and China have large well-funded universities that encourage higher education.
The Kakodkar report also emphasises the need for rapid improvement needed in research infrastructure in India, including the IITs. China, for example, has 3 times more enrolment for master’s programmes in engineering and management. Innovation and research orientation during university education will not only encourage students to pursue specialisation, but also help them become entrepreneurs.
AICTE could upgrade the syllabus to be more attuned with industry needs, by focusing on fundamental building blocks like programming and specific domains like banking, retail, telecom, etc. Business schools like IIMs have linked their course content to the industry and have successfully created industry-ready professionals.
Should the duration of the course (say, B.Tech) be increased by a few months? This could help in accommodating a sandwich programme, popular among advanced countries, which would provide direct work experience to the engineers. There are bound to be challenges in implementing this due to the scale. Industry buy-in will be key for the success of such an effort.
Using non-engineering graduates in the IT industry has been successful in patches, primarily driven by a few large organisations. This could be replicated for scale, through tie-ups between universities and industry, with skill enhancement on focused areas. The Government of India’s National Institute of Electronics and Information Technology (NIEIT), more commonly known as DOEACC, offers courses ranging from diplomas to MTech across the country. However this has not gained popularity.
A report states that 62% of the students require training to be eligible for any job in the IT sector. The Centre for Development of Advanced Computing (C-DAC), often referred to as a finishing school, offers skill-bridging training programmes to engineering graduates on focused areas. There are also few private finishing schools providing training to enable industry-ready engineers. However, such initiatives may be grossly inadequate to address the large-scale need.
The National Skill Development Council (NSDC) could play a key role in driving skill enhancement initiatives needed in the IT industry across the country. NSDC, being a high visibility initiative of the government, and has received a R1,000 crore allocation in the recent budget. NSDC is aimed to fulfil the growing need for skilled manpower across 21 sectors, including IT, and narrow the existing gap between the demand and supply of skills. NSDC has formed Sector Skill Development Councils to approve training curriculums and deliver the right value. Nasscom has joined NSDC to lead the sector skill council for IT. The Nasscom-NSDC engagement is expected to help the IT industry scale pilot initiatives and build technology as the enabler for skill development in the country.
NSDC could lead the effort in bring Nasscom, universities and private/government establishments like C-DAC together and create a charter for providing the right platform to bridge the skill gap for the IT industry. Such a programme should also help in improving soft skills and communication skills, which are often found lacking among many engineers.
So far, NSDC has primarily focused on the unorganised sector. Such an initiative in IT can help establish NSDC as a key player in the organised sector. Innovative business models can be developed, creating a win-win situation for all the stakeholders, including the students. With the government’s focus on improving broadband reach in the country, coupled with the availability of affordable devices, innovative and cost effective training methods can be implemented.
The demand for an IT workforce in India is expected to grow multi-fold over the next few years. The current employability rate among engineering graduates is alarming. Universities could relook at the duration of the courses and upgrade syllabus to be attuned with industry needs. For innovation and research to flourish, industry-academia interaction needs to be strengthened. Importantly, NSDC could play an important role in creating the right platform for enhancing the skills of India’s next-gen engineers!

The author is vice-president, Engineering, at Symphony Teleca. Views are personal

 

Take charge & go-ahead! It is your career

 

Deccan Herald,  7th Sep 2011, DH Aveneue

 

G Krishna Kumar

Polish up
It is not a perfect world where everyone gets an opportunity that matches aspirations

Requirements management, User experience, Build and release Management, Triage management are some of the roles that were never heard in the Indian software Industry say 10 to 15 years back. However, over the past few years, these niche roles have emerged in the Indian Software landscape among both the services and product companies.

These, together with the standard roles in development, testing and project management, provide engineers with several options to pursue a career in the IT Industry. The myriad of options, often adds to the confusion especially among engineers in the less than 10 years experience range.

While there are a few engineers who are aware of the value they deliver currently and how they would enhance it in the future, a vast majority of them are not sure. Salary increase appears to be the sole parameter to measure growth.

Most IT organisations have developed career paths on technical and project Management ladders to help their employees. It is to be noted that the work content in software product and services companies is similar to a great extent and there is no dearth of opportunities in both technical and managerial ladders.

In general, managerial roles are more acceptable in the Indian society. However, technical skills are always at a premium, in high demand and provide immense potential to realise value both for the individual as well as for the organisation.

Although career plan is strictly a personal initiative, there is a popular perception that it is owned by the organisation as an HR initiative. How can we expect an organisation to own the career plan for each and every employee?

It is important to understand assuming that an individual has a fair idea on the future goals, let us look at the practical aspects in realising the goals.

Spend disciplined effort
It is not a perfect world where everyone gets an opportunity that matches both the individual’s aspiration as well as business needs. In reality, it is highly likely that the current job may cater to say 50 per cent of an individual’s aspirations. This means, the rest needs to be “earned”, by spending additional disciplined effort to strengthen the areas not covered by the present job.

For example, let’s take an individual aspiring to be a Software Test Architect, while the current job is that of a manual tester. The Individual could learn/enhance programming, scripting, creating Test benches etc. Another example could be that of a developer involved in maintenance of a software product.

It is very likely that the scope of work will be limited to a few modules. However, normally, the engineer would have access to a lot of product resources that could help the engineer in gaining deeper product knowledge. In general, understanding the overall purpose of the project and seeing the big picture always help engineers appreciate their current work.

The next logical question is to find out if this knowledge can be put to good use. It is safe to assume that opportunities are aplenty in any organisation. It is a matter of interest and commitment from an individual that would open newer opportunities.

Focus on Fundamentals
Over the past few years, the Indian engineers have learnt the need for soaking into a domain in order to gain expertise. All the Domains like Wireless Telecom, Finance, Health care etc offer hundreds of sub domains that can be specialised over many years. For example, a wireless telecom engineer can be an expert in a niche sub-domain like a layer in LTE protocol stack or multimedia framework etc.

An individual could identify and gain expertise on multiple sub-domains. Each of these domains is evolving and this, not only provide an opportunity for the individuals to be abreast with the latest changes in the domain, but also, potentially contribute to the standards.

The next important area for an individual to focus on is, programming language or scripting language as the case maybe. Best programmers are always in scarcity and are equally desirable for a pure software Development project or a maintenance project. Programming languages, akin to sub-domains are an evolving area and a new programming language emerges into the arena every few years.

Importance of Mentor
It is important that the engineers are fundamentally strong in programming and design so that they can seamlessly move into new programming languages without much effort. While parents and close relatives play an extremely important role during education and early part of the job career, it is important to identify a mentor who could either be from the current organisation or from any other organisation.

The mentor can guide the individual in taking key career decisions and could even guide the individual in handling inter-personnel challenges. It is important to realise that the mentor is not the decision maker. Softer aspect like communication skill is very critical and is often ignored. It is extremely important to be clear and articulate while communicating with stake holders including customers, immediate managers and other team members.

Thinking of a solution for a complex problem is just one part, clearly articulating and obtaining buy-in from the stake holders is immensely important. It is also important not to get into an “I-know-it-all” mindset, to remain humble and be a good team player. One more important factor is the longevity of the individual in any organisation. It is fairly established that, in a growing organisation, a good performer will always have plenty of opportunity to grow rapidly.

To sum up, it is the Individual’s career which is at stake and hence more than anyone, the Individual needs to “own” the career plan. Organisations can play a supportive role with framework and policies and a personal mentor can help in key decision making.

It is imperative that the individual focuses on enhancing technical skills and there-by adding value to self as well as the organisation. Sticking to an organisation longer certainly helps. Amidst all these, it is vital to focus on softer aspects and be a genuine team player to experience true career growth.

(The writer is Director and Head of Mobile Devices Delivery, Teleca software solutions India)
 

Indian IT : Salary cost Vs Billing rate

Hindu Business Line, 31st May 2011, eWorld

Krishna Kumar

One factor that has perhaps not changed over the past 15 years is the excitement among fresh engineering graduates when they land a software job. And, why not? The Indian IT industry has had an unprecedented influence on Indian society, despite representing about 0.55 per cent of India's overall workforce and about 6 per cent of the organised sector.

The IT Industry has matured over three significant inflection points — the 1997/99 Y2K euphoria, followed by the dotcom bubble in 2001/02 and the global recession in 2008.

The sector being extremely people-dependent, industry salary cost accounts for over 50 per cent of the cost in any IT company. In spite of the fact that salaries were moderated post the dotcom era and the 2008 recession, salaries have gone up significantly over the past 15 years, but the billing rates have remained quite subdued in comparison.

Salary

From an employee perspective, the Indian IT/Software market has provided huge growth potential, both in terms of job opportunities as well as salary. The average salary of a fresh engineering graduate during 1996-98 was in the range of Rs 70,000-90,000 per annum. The fresh engineer salary jumped three-four times by 2005/06 and continues to remain at an average Rs 3-3.6 lakh per annum.

As one gains experience, the salary should ideally be linked to the “role” a person plays and just not to the years of experience. However, due to the lack of a credible alternative, years of experience (YOE) plays a critical role in deciding salaries.

The salary per year of experience was roughly Rs 50,000 to Rs 75,000 way back in 1996/97 and now this has jumped to anywhere between Rs 1.5 lakh and Rs 2.5 lakh depending on the individual's skill level, performance and company. For example, a mid-size IT services company will have to pay a premium of 10-20 per cent as against a well-branded large company.

In the Indian context, the salary leaps by five to eight times within 10 years of experience. Compare this with Europe, where the salary, at best, goes up by 50-60 per cent at the end of 10 years. Such a phenomenal increase in India is possible thanks to the ever expanding market place where the demand/supply is still heavily tilted towards demand. Due to the uncertainty involved in perks such as ESOPs, potential employees look at salary as the single most important parameter.

Due to this rising salary market, the average cost of compensation (ACC) or salary cost from an employer perspective has gone up 2.5-3.5 times over the last 15 years. The ACC was around $300-400 per month during 1996/97. Add to this the cost of recruitment, which has also gone up quite significantly. A recent report from Aon Hewitt indicates a 12 per cent salary increase for the IT industry in 2011. Maintaining the ACC at current levels will be a huge challenge for the IT companies.

Billing rates and Revenue

In the case of small and mid-size companies involved in niche areas such as Telecom R&D outsourcing, the average billing rates have more or less remained stagnant or have gone down over the past 15 years. The average billing rate continues to remain roughly around $15 to $25 per hour depending on complexity. However, among both the mid-size and large-scale generic IT services companies, the billing rates have gone up from about $12-14 during 1996-97 to about $18-20 during 2010-11.

While over 80 per cent of the projects were T&M (time and material)-based projects until the late nineties, over the past few years, the number of fixed-price projects has increased and is about 50 per cent in the large IT companies.

While fixed-price projects carry more delivery risk and penalty clauses, they provide a great opportunity to continuously improve productivity and manage profitability by creating the right resource pyramid (the mix of engineers in the lowest band and higher bands). For example, a 500-member software maintenance project would typically be staffed with over 50 per cent of the engineers in less than three-years-experience range. Fresh engineers with appropriate training would form a large chunk of the junior engineers. The large IT services companies are adding 15,000- 20,000 fresh engineers on an average in 2011.

Large IT companies have witnessed over 50 times growth in revenue over the past 14-15 years. Also, almost all large IT companies have achieved Net margin at over 15 per cent during the past 15 years. However, the mid-segment IT companies have seen decline in profitability and were most affected during the recession period. This is primarily because the mid-segment companies were unable to leverage the resource mix and larger IT companies maintained over 50 per cent offshoring.

What next?

With the increasing salary costs in India and billing rates certainly not going up proportionally, coupled with effective tax rate going up, uncertainty over currency fluctuation, strong competition from low-cost eastern European countries and China, IT companies will be under tremendous pressure to maintain profit margins. Indian IT companies need new and innovative approaches in order to sustain profitability.

The “high value” Consulting Business could be a potential growth opportunity. Consulting business contributes to 3-5 per cent revenue of the large Indian IT companies. For Accenture, a global leader in Consulting, over 60 per cent revenue comes from the consulting business with an average billing rate at least 4 to 5 times higher than the current average billing rates among large Indian IT companies. Although consulting is a high revenue generating business, the key challenge is to get the right skilled resources. The consultants are subject matter experts who possess deep domain expertise.

To sum up, over the past 15 years, the impact of salary cost increase vis-à-vis billing rate and thus on profitability has been quite significant among mid-size IT companies, while larger IT companies have been able to handle the impact through effective pyramid management.

India's IT revenue is expected to grow three-fold by 2020 and thus demand for Indian IT professionals would be high. However, it looks increasingly likely that the Indian IT Industry will move towards single-digit net margin levels over the next decade.

The author is Director, Engineering, Teleca Software Systems India. Views are personal.