Prince2 - hands on how to...

Here is the order to which a project can be managed using the PRINCE2 process model:

1. The Programme Management developed a project charter, or has defined preliminary guidelines and goals for the project. This information will be used in SU (Starting Up a Project) to assign a PM, appoint a project team and to prepare project documentation for the project board to terminate/authorise the progression of the project to the next phase.

2. The project board will reject/authorise the project to progress to the initiation stage after reviewing the project brief & initiation stage plan for the project, as well as allocating resources for the project initiation phase. The project goes into the next phase if project board approves the initiation phase.

2a. If the project board rejects the team's proposed initiation stage plan, the process is restarted again.

2b. If the project board approves the team's proposed initiation plan, the project moves to the IP stage.

3. In the project initiation phase, the project team will plan the quality and develop an overall plan for the project. More importantly the Business Case, PID (Project Initiation Document), Project Controls and Plan for the next stage are created for the project. These are submitted to the project board for assessment and approval must be gained to proceed to the next stage.

3a. If the project board rejects the project team's proposed next stage plan, the process is restarted again.

3b. If the Project board approved the plan for the next stage, the project is now moving into a 'doing' phase where work package definitions are defined. Line managers are usually involved at this stage to give consultation on specific details on work packages.

3c. The Business Case, PID and next stage plan are reviewed by the project board that assesses if the project should continue by evaluating the viability of the updated Business Case. In addition, the next stage plan is reviewed and approved before the project can proceed to the next phase. Should the project board decide that the Business Case for the project is no longer viable; the project shall proceed to CP (Closing a Project) prematurely.

4. During CS (Controlling a Stage), the project manager and the line manager agreed on the specification and expected quality of the work package. It is then the responsibility of the line manager to coordinate his/her resources to get the work completed to the quality and specification of the work package. In some cases line managers can be contacts from external parties to the project team or project organisation.

5. Depending on the size of the work package, checkpoints may be used to monitor the progress of the work package.

6. Once the work package is completed, the completed work package is handed to the project manager who should get verification that the completed work package is consistent with the standard specified in the work package definition.

6a. If the work package fail to satisfy the quality or specification specified on the work package definition, the project manager can reject the package and the whole process is restarted again.

7. Step 4 to step 6 is repeated for all work packages planned to be delivered during the current stage. Multiple work packages can be initiated concurrently and with multiple line managers/3rd-parties providers.

8. Project controls are in place to highlight to the project manager any project issues and risks that were identified and/or realised during the current stage. The project manager should seek ad-hoc recommendation from the project board (through DP-Directing a Project) if realised issues/risks threatens the overall project.

9. Should the project board decided, after assessing the business case, that the project is no longer viable, the project shall proceed to close (CP-Closing a Project) prematurely.

10. The project board can give ad-hoc feedback and/or recommendation, in respond to the realised issues/risks, to the project manager to be implemented in the current phase.

11. During the implementation of the current phase, the project manager may realise that targets set within the current stage plan may not be realised as a result of unforeseeable internal and/or external issues. In this case the project manager should update all relevant project documentation and prepare an exception plan taking into account of the realised issue/s and its effect to the current stage.

12. The exception plan is presented to the project board for review and recommendation. The project board can either reject or approve the submitted exception plan, taking into the new plan's effect on the viability of the business case for the project.

13. The decision to reject or to approve the submitted exception plan is communicated to the project manager as feedback.

13a. If the project board rejected the initial exception plan, the project manager should submit subsequent exception plan incorporating project board's recommendation.

14. The project manager should inform project board if exception plan is un-workable with project board's recommendation, as ad-hoc feedback.

14a. If the project board, after evaluation, decided that the business case for the project is no longer viable, the project moves to CP (Closing a Project) to be closed prematurely.

15. When the current stage is approaching an end, the project manager should update all relevant project documentations;

15a. If the current stage is not the last stage, prepare project plan for the next stage.

15b. If the current stage is the last stage, initiate a notification of project end and proceed to CP (Closing a Project) to formally close the project.

16. The next stage plan is submitted to the project board for review.

17. The project board reviews the submitted next stage plan and assessing the viability of the business case to either approves or rejects the submitted next stage plan.

17a. If the project board rejects the submitted next stage plan, the project manager should submit subsequent next stage plan incorporating project board's recommendation.

18. Steps 3b to steps 17 should be repeated for all subsequent project stages.

19. Follow on from step 15b: The project manager should ensure that the project delivered all products, and in the quality standard specified in project specification documents. In addition the project manager should ensure users approved and signed off all delivered products and all post project responsibilities allocated. Project board should then approve the closure of the project by handing over responsibility of the product to users and release all resources assigned to the project. In addition the project board should inform corporate management of the project's closure.

My Selected Journey Photos

End of Models

Sixty years ago, digital computers made information readable. Twenty years ago, the Internet made it reachable. Ten years ago, the first search engine crawlers made it a single database. Now search engines are sifting through the most measured age in history, treating this massive corpus as a laboratory of the human condition. They are the children of the Petabyte Age.

The Petabyte Age is different because more is different. Kilobytes were stored on floppy disks. Megabytes were stored on hard disks. Terabytes were stored in disk arrays. Petabytes are stored in the cloud. As we moved along that progression, we went from the folder analogy to the file cabinet analogy to the library analogy to — well, at petabytes we ran out of organizational analogies. Now they call it clouds.

The Petabyte Age is now challenging all boundaries. The biggest and the scariest victim of the Petabyte age is Theory. Anderson in his book The End of Theory: The Data Deluge Makes the Scientific Method Obsolete sums it up: "This is a world where massive amounts of data and applied mathematics replace every other tool that might be brought to bear. Out with every theory of human behavior, from linguistics to sociology. Forget taxonomy, ontology, and psychology. Who knows why people do what they do? The point is they do it, and we can track and measure it with unprecedented fidelity. With enough data, the numbers speak for themselves."

The often quoted phrase, "Essentially, all models are wrong, but some are useful", is attributed to George Box one of the most influential statisticians of the 20th century and a pioneer in the areas of quality control, time series analysis, design of experiments and Bayesian inference. It now seems a rude reality as all modeling will be challenged by the statistic spewing Cloud of the Petabyte Age.

The royal road would be to demonstrate that models are crucial to science, which would be grounds for thinking that they are logically necessary. Timmer takes the short cut on pragmatic grounds: models have utility, regardless of their truth or falsity. Models, so to speak, make the scientific establishment go around.

History of Bengalis in UK

Origins of the Bengali community
It all started when Calcutta became the Indian terminus of the P&O line in 1842 and Bengali Lascars started arriving in London on the P&O mail and passenger ships. There is evidence of a Muslim Bengali community in the East End before 1850. This consisted mainly of Lascars who had either been abandoned in the port or had voluntarily left their ships. Few single Asian women arrived in England in this period.

The First Bengali British
Bengalis from the Indian subcontinent were the great patrons of art and music. Many Bengali Lascars and destitute servants found it difficult to gain employment in England and became musicians playing Indian drums, tambourines and sitars in the streets of the East End. Some eventually entered into relationships with local English women and a generation of Bengali-British children was born. Perhaps the most famous child of Bengali-British parentage was Albert Mahomet. He was born in 1858 at Sophia Street in Bow, East London, to an English mother and an ex-seaman from Calcutta. Mahomet grew up in a world of crime and poverty that claimed many of his siblings. Eventually, he moved to the city of Wells and became a respected Methodist preacher and photographer.

Bengalis in late 19th-century London
In 1856, Calcutta became the headquarters of the British India Steam Navigation Company (BINSC). This greatly increased the employment of Bengali Lascars in the British Merchant Navy. By 1873 there is mention of a lodge run by an Englishwoman called 'Calcutta' Louisa and another run by 'Lascar' Sally, for Indian Lascars at the riverside of the High Street at Wapping. 'Lascar' Sally’s real name was Sarah Graham. These English women lived with their Indian partners and often even spoke Bengali or Hindi.

Not all Bengalis in 19th-century London were part of the East End working class. There were Bengali students of medicine at London University, and numerous members of Bengali aristocracy. One Hindu Bengali from Calcutta by the name of Lal Mohan Ghose (1849-1909) was educated as a barrister in London. He stood unsuccessfully as a Liberal candidate at Deptford in 1885 and 1886.

Early 20th-century experiences
In the interwar depression years there were a number of Sylheti seamen in London, selling cheap articles. At least one Sylheti ex-sailor Ayub Ali, arrived in London and established a restaurant at 76 Commercial Street in Whitechapel. Another Sylheti ex-sailor, Syed Tofussil Ally, opened the British Indian Sailors' Home and seaman's outfitting shop at 32-3 Victoria Dock Road, in Canning Town. Despite the poor wages and risks, many Bengali men joined the British Merchant Navy in the Second World War. The reasons for this were the shortage of British men available for service with the merchant fleet (due to the demands of the Royal Navy) and the outbreak of famine in Bengal. Syed Ally moved out of the docks and he eventually ended up in Glasgow. In 1943, Ayub Ali and Shah Abdul Majid Qureshi established the Indian Seaman’s Welfare League at 66, Christian Street. The membership of this organization was largely Sylheti.

Partition, Civil War and its effects
After the British left India the subcontinent was partitioned in 1947. A Hindu-dominated India was created together with two predominantly Muslim areas known as East and West Pakistan. One of the most affected areas was the Assam Province of British India. The Muslims of Sylhet had given this area a Muslim majority. Hindu politicians feared that this would lead to the entire northeast of British India becoming part of a Muslim state. They decided to divide Assam and Sylhet became part of East Pakistan, today’s Bangladesh.

Beginnings of mass migration
The insecurity over the autonomy of areas of East Pakistan led many seamen from Chittagong, Chalna and some towns on the Brahmaputra River, to leave their vessels in the Port of London. There is further evidence that in the 1950s and 1960s the Sylhet area was targeted by British officials seeking workers in London’s post-war boom. These workers and ex-seamen subsequently brought their families to Britain. By 1964 some of the streets off Brick Lane were more than 60% Asian, with predominantly Sikh and Pakistani Muslim households.

Civil war on the subcontinent
The Muslim state of Pakistan existed in two culturally and historically very different areas of the subcontinent, separated by thousands of miles of Hindu-dominated India. After nine months of civil war the state of Bangladesh was created in 1971. A flood of refugees and immigrants arrived in East London to join friends and relatives. They formed the largest Bangladeshi community in Europe.

Many of the early arrivals were from the rural areas of Sylhet and Chittagong. It is worth noting that the early seamen, including cooks and galley-men, were from these same areas. It is one reason why the Bengalis were able to move into the 'Indian' restaurant trade throughout the country. These early innovaters can be credited with the modern British Cusine called "the Indian Curry".

The 21st Century and today
Bengal has contributed many professionals to the Britsh Society in the past few decades. We see a sizeable number of Bengali doctors from India who have migrated to Britain and have merged to the mainstream society. A recent influx of IT and finance professionals has also brought in a fresh wave of expats who are contributing positively to the British society. Many have settled in UK and made it their homeland. Their contribution is nessesary to bridge the existing gap with the mainstream British Culture.

History Of Bengal

The history of Bengal can be divided according to the religion of its rulers.
Ancient history
From the 6th century BC, much of Bengal was a part of the powerful kingdom of Magadha, which was an ancient Indo-Aryan kingdom of ancient India, mentioned in both the Ramayana and the Mahabharata. It was also one of the four main kingdoms of India at the time of Buddha, having risen to power during the reigns of Bimbisara (c. 544-491 BCE) and his son Ajatashatru (c. 491-460 BCE). Magadha spanned most of Bihar and much of Bengal.
Magadha formed one of the sixteen Maha Janapadas (Sanskrit, "great country"). The Magadha empire included republican communities such as Rajakumara. Villages had their own assemblies under their local chiefs called Gramakas. Their administrations were divided into executive, judicial, and military functions. Bimbisara was friendly to both Jainism and Buddhism and suspended tolls at the river ferries for all ascetics after the Buddha was once stopped at the Ganges River for lack of money.
One of the earliest historical references to Bengal as perhaps a separate entitiy is the mention of a land named Gangaridai by the Greeks around 100 BC. The word is speculated to have come from Gangahrd (Land with the Ganges in its heart) and believed to be referring to an area in Bengal.
Early medieval history
More concrete evidence of Bengal becoming a political entity is found in the 6th century, with the first recorded independent king of Bengal - Shashanka - reigning around 606.
The first Buddhist Pala king of Bengal, Gopala-I came to power in 750 in Gaur by election. This event is recognized as one of the first democratic elections in South Asia since the time of the Maha Janapadas. The dynasty's most powerful kings, Dharampala (reigned 775-810) and Devapala (reigned 810-850) united Bengal and made the Pala family one of the most important dynasties in ninth-century India. Internecine strife during the reign of Narayanpala (reigned 854-908) and administrative excesses led to the decline of the dynasty.
A brief revival of the kingdom under Mahipala I (reigned 977-1027) ended in battle against the powerful, South Indian Chola kingdom. The rise of the Chandra dynasty in southern Bengal expedited the decline of the Palas, and the last Pala king, Madanpala, died in 1161.
The Malla dynasty emerged in Bengal in the seventh century, although they only rose to prominence in the 10th century under Jagat Malla who moved his capital to Vishnupur. Unlike the Buddhist Palas and Chandras, the Hindu Mallas worshipped first the Hindu god Shiva, then the Hindu god Vishnu. The Mallas built temples and spectacular religious monuments during their rule in Bengal.
Under the Sena dynasty, which lasted from 1095 to 1260, Bengali emerged as a distinct and important language in northern India, and Hinduism began to displace older Buddhism.
Muslim rule
The Turkic invasion of India (including Bengal) came in the early 13th century. The invaders defeated the Sena king Laxmansena at his capital, Nabadwip in 1203 (1204?) The Deva family — the last Hindu dynasty to rule in Bengal — ruled briefly in eastern Bengal, although they were suppressed by the mid-fourteenth century.
During the early Muslim period, the former kingdom became known as the Sultanate of Bangala, ruled intermittently from the Sultanate of Delhi. The chaotic shifts in power between the Afghan and Turkish rulers of that sultanate came to an end when Moghul rule became established in Bengal during the sixteenth century.
In 1534, the Afghan Sher Shah Suri, or Farid Khan — a man of incredible military and political skill — succeeded in defeating the superior forces of the Mughals under Humayun at Chausa (1539) and Kannauj (1540). Sher Shah fought back and captured both Delhi and Agra as he established the most powerful Bengali kingdom that would ever exist, stretching far into Panjab. Sher Shah's administrative skill showed in his public works, including the Grand Trunk Road connecting Sonargaon in Bengal with Peshawar in the Hindu Kush. Sher Shah's rule ended with his death in 1545, although even in those five years his reign would have a powerful influence on Indian society, politics, and economics.
Shah Suri's successors lacked his administrative skill, and quarrelled over the domains of his empire. Humayun, who then ruled a rump Mughal state, saw an opportunity and in 1554 seized Lahore and Delhi. Humayun's death in 1556 led to the accession of Akbar, the greatest of the Mughal emperors, who defeated the Karani rulers of Bengal in 1576 and ruled through governors. Akbar exercised progressive rule and oversaw a period of prosperity (through trade and development) in Bengal and northern India.
Bengal's trade and wealth so impressed the Moghuls that they called the region the "Paradise of the Nations". Administration by governors appointed by the court of the Mughal Empire court (1575-1717) gave way to four decades of semi-independence under the Nawabs of Murshidabad, who respected the nominal sovereignty of the Mughals in Delhi. The Nawabs granted permission to the French East India Company to establish a trading post at Chandernagore in 1673, and the British East India Company at Calcutta in 1690.
When the British East India Company began strengthening the defences at Fort William (Calcutta), the Nawab, Siraj Ud Daulah, at the encouragement of the French, attacked. Under the leadership of Robert Clive, British troops and their local allies captured Chandernagore in March 1757 and seriously defeated the Nawab on June 23 1757 at the Battle of Plassey, when the Nawab's soldiers betrayed him. The Nawab was assassinated in Murshidabad, and the British installed their own Nawab for Bengal and extended their direct control in the south. Chandernagore was restored to the French in 1763. The Bengalis attempted to regain their territories in 1765 in alliance with the Mughal Emperor Shah Alam II, but were defeated again at the Battle of Buxar (1765).
The center of Indian culture and trade shifted from Delhi to Calcutta when the Mughal Empire fell.
Portugese Interests
In 1537, the Portuguese sailed up the Ganges to establish their settlement in Satgaon. In 1580, they moved to a new settlement called Bandel de Hooghly. In 1599, the Portuguese consecrated the Church of Our Lady of Happy Voyage. The Portuguese colony was short-lived. The Portuguese had flouted their agreement with the Moghul Empire and had engaged in slave trade, had fortified their territory and were supplying arms to the Arakan Kingdom that was at war with the Moghuls. Emperor Shah Jehan attacked and destroyed Bandel de Hooghly in 1632 and all survivors were imprisoned. A change of mind of the Emperor led to the release of the prisoners a year later and permission was granted to rebuild the settlement. However, Bandel never revived much except for the church. The church was already a pilgrimage for Christians, Hindus and Moslems alike, at the time of the attack, and continues to do so. The church is now a Basilica and a major center of the Roman Catholic religion in South East Asia.
Dutch colonies
On 1608 the Dutch created their first Indian colony. In 1625 Vereenigte Oostindische Companie of Holland, more commonly known as the Jan Companie, established a settlement at Chinsurah a few miles south of Bandel to trade in opium, saltpeter, muslin and spices. They built a fort called Fort Gustavius and a church and several other buildings. A famous Frenchman, General Perron who served as military advisor to the Mahrattas, settled in this Dutch colony and built a large house here. The Dutch settlement of Chinsurah survived until 1825 when the Dutch in their process of consolidating their interests in modern day Indonesia, ceded Chinsurah to the English in lieu of the island of Sumatra. Fort Gustavius has since been obliterated from the face of Chinsurah and the church collapsed recently due to disuse, but much of the Dutch heritage remains. These include old barracks, the Governor's residence, General Perron's house, now the Chinsurah College and the old Factory Building, now the office of the Divisional Commissioner.
1795 - 1818 British occupation of all Dutch India settlements. 1818 Malabar annexed to British India.
French Colonies
The French established their colony at Chandernagor in 1673. Until the middle of the next century, Chandernagor rivaled Calcutta in its trade. The wars between the English and French were reflected thousands of miles away in the waters of the Ganges, too. Chandernagor was a heavily armed French garrison as was Calcutta for the English. The French built the Fort d'Orleans amongst a number of other buildings. Chandernagor's history reflects the upheaval of Europe during the seventeenth and eighteenth centuries. In the course of these wars, Chandernagor was taken by the British twice between 1757 and 1763 and then again between 1794 and 1815. Chandernagor was the sourcing point for opium for the French and supported more than half of the finances of French Indo-China. Chandernagor remained a French colony until 1949 when a referendum led to its merger with the Republic of India. Chandernagor was a favorite spot for rich Calcuttans during the first half of the twentieth century for French food and wine, duty-free. Chandernagor's French aura remains even after almost fifty years since the departure of the last Adminsitrateur. A gate with the motto of the French Republic "Liberte Egalite Fraternite" marks the entrance to the former Etablissment de Chandernagor. The quai Dupleix, Chandernagor's waterfront road is lined with shady trees and public benches, replicas of the ones in Parisian parks. The former Administrateur's eighteenth century mansion is now a museum of French heritage in Chandernagor. The former Hotel de Paris, the Couvent Saint-Joseph and Rabindranath Tagore's house are amongst the many heritage buildings that line the quai Dupleix. Behind the Administrateur's residence stands the Eglise du Sacre Coeur, reminiscent of French village churches with a statue of Joan d'Arc and a Lourdes grotto. On the Rue de Paris, to the north of the town is the French cemetery with more memories of the colonial age.
Danish Ventures
The Danish flag that was the ensign of the colony of Serampore and the guardian of wisdom until it was replaced by the Union Jack.
The Danish East India Company established a colony called Fredericknagore, in honor of King Frederick the Fifth near Serampore in 1699. Occupied twice by the English during with their war with Denmark, Fredericknagore failed as a commercial venture. In 1777, after the Danish company went bankrupt, Serampore became a Danish crown colony. Serampore's commercial failure was complemented by its immense success on the cultural front. As the English did not permit missionary activities in their territories, Serampore became a safe haven for missionaries in India. In 1799, Reverend William Carey and two fellow Baptist missionaries established the first printing press in Asia, here in Serampore and began printing copies of the Bible. In 1819, Carey went on to establish the Serampore College, the first institution of western higher education in Asia. In 1827, a Royal Charter by the King of Denmark incorporating it as a university at par with those in Copenhagen and Kiel. In 1845, Denmark ceded Serampore to Britain ending the nearly 150 years of Danish presence in Bengal. Serampore's Danish heritage lingers to this day. Serampore University's massive 1821 neo-classical building now serves as a Baptist theological institute and a museum on the life of William Carey. The mansions built by wealthy Danish families on the waterfront, the St. Olaf Church, Royal Danish Army barracks and the cemetery stand testimony to Serampore's Danish heritage to this day.
British Rule
Scarcely five years into the Company's rule, the catastrophic Bengal famine of 1770, one of the greatest famines of history occurred. Up to a third of the population died in 1770 and subsequent years.
The Indian Mutiny of 1857 replaced rule by the Company with the direct control of Bengal by the British crown.
A centre of rice cultivation as well as fine cotton called muslin and the world's main source of jute fibre, Bengal, from the 1850s became one of India's principal centres of industry, concentrated in the capital Kolkata (known as Calcutta under the British, always called 'Kolkata' in the native tongue of Bengali) and its emerging cluster of suburbs. Most of the population nevertheless remained dependent on agriculture, and despite its leading role in Indian political and intellectual activity, the province included some very undeveloped districts, especially in the east. In 1877, when Victoria took the title of "Empress of India", the British declared Calcutta the capital of the British Raj.
India's most populous province (and one of the most active provinces in freedom fighting), in 1905 Bengal was divided by the British rulers for administrative purposes into an overwhelmingly Hindu west (including present-day Bihar and Orissa) and a predominantly Muslim east (including Assam) (1905 Partition of Bengal). Hindu - Muslim conflict became stronger through this partition. While Hindu Indians disagreed with the partition saying it was a way of dividing a Bengal which is united by language and history, Muslims supported it by saying it was a big step forward for Muslim society where Muslims will be majority and they can freely practice their religion as well as their culture. But owing to strong Hindu agitation, the British reunited east and west Bengal in 1912, and made Bihar and Orissa a separate province.
Another major famine occurred during the second world war, the Bengal famine of 1943, in which an estimated 3 million people died.
Two Independences
As partition of British India into Hindu and Muslim dominions approached in 1947, Bengal again split into the state of West Bengal of secular India and a Muslim region of East Bengal under Pakistan (renamed East Pakistan in 1958)( 1947 Partition of Bengal). East Pakistan (East Bengal) later rebelled against Pakistani military rule to become independent republic of Bangladesh, literally "Land of Bengal", after a war of independence against the Pakistani army in 1971. West Bengal remains a part of India. However, culturally and sociologically, the two segments of Bengal share considerably more than just a single language.
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Indian IT - how it all started

The Indian software industry dates back to the days before 1990. At that time the industry was tiny - it employed fewer than 30,000 people - but they were employed by or organised in many small firms. There were no satellite communications, no Internet, and the only way of exporting software was export of coders. Personal computers were only ten years old; there were hundreds of programmers who had written BASIC, COBOL and Fortran programmes for IBM mainframes.
India lagged behind the world which was converting to PCs and packaged programmes. So when someone in America wanted their mainframes configured or new programmes to be written for them, they could find such outdated but valuable skills in India. The programmers were clustered around the handful of government laboratories and big businesses. They began to form small outfits and export people - what came to be known as body-shopping.
The business was similar to the recruitment agents for the Middle East which had sprung up all over India - but particularly in Kerala and Rajasthan - in the 1970s when as the oil boom caused a severe labour shortage in Iraq, Kuwait, United Arab Emirates and Saudi Arabia.
The Boom
This business began to change after N Vittal set up Software Technology Parks in 1990. They were industrial estates; the only difference was that each had a VSAT link which firms located in STPs could use to transmit programmes and data. That by itself did not lead to bigger firms; the early STPs deliberately kept firms small by giving them only 500 square feet of space. But such firms could mediate between domestic software producers and foreign buyers; they could get work done outside the STP and use their link to export it. Thus firms no longer needed to be small.
On the contrary, large firms came to have an advantage. When programmers were being body-shopped, their foreign lessor could put them to any use. But once work came to be done offshore, it had to be in large, self-contained packets. As confidence in Indian firms grew, the packets grew larger.
The clients were always in a hurry; it was advantageous to get a job done quickly by putting a large team on it. The constraint on size imposed by the government on firms in STP disappeared once firms were allowed to set up their own VSAT links. This is how big firms acquired an edge after 1993 - an edge that is reflected in today's TCS, Infosys, Wipro and Satyam.
Small firms did not disappear. In Bangalore and Chennai, a practice of outsourcing work grew up; it allowed firms to take on big jobs without taking more people on their payroll. They could also use cheaper programmers who did not have engineering degrees without employing them directly or revealing to their foreign clients that they used them. The labour shortage also brought forth many training firms; besides NIIT and Aptech which grew big, there were many smaller training firms all over India.
And once Internet became popular in the latter half of 1990s, a great many small firms came up that developed and maintained web sites for clients. Thus, while the coming of VSAT favoured big firms, it did not handicap small firms. There was a lot of work for all to share. Along with these came the domestic demand of IT sevices of the domestic sector fueled by the development of the Intenet and Telecom industry of the new Indian economy. With buzz words like ebusiness and CRM hitting the Indian corporate the industry did phenomenal business.
The Bust and Survival
Then came the meltdown of the IT boom in the US in spring 2000; that transformed the landscape in India. Export orders fell; as demand fell, the big Indian firms stopped outsourcing, and small jobbing firms began to close down. As the market for software cooled, the demand for new programmers fell, and with it, the training firms underwent a slump. And customers soon discovered that Web sites added little to the bottom line; so Web designing business also fell off. Thus, all three mainstays of small firms turned down, and many of them closed shop.
What is remarkable about the Indian software industry is the vast number of firms in it. Nasscom has 800-odd members, IT directories list thousands, and there are many more unlisted anywhere. This is what a recent Nasscom survey showed. There were four groups of firms with substantial exports: big firms with sales over Rs 10 billion commanded roughly a third of the exports, medium firms with sales of Rs 1-10 billion had another third, and branches of foreign firms as well as small Indian firms had each roughly a seventh of the market.
Of these, medium and small Indian firms have lost out to the biggest Indian and foreign firms; the market has favoured size. There were also niche service suppliers and firms concentrating on products, with small market shares of 3-4 per cent; of the two, product firms have done badly.
Then there are firms specialising in IT-enabled services - which has done best of all, better even than the biggest firms. These firms are small; but there is no advantage in smallness here. If this business takes off, there will soon be huge firms employing thousands, as GE is already doing.
Thus, the size structure and specialisations of Indian firms have changed unrecognisably and irrevocably in the past two years. The age of the small, unspecialised, undifferentiated, labour-intensive firm is over. Many think that the business they did will go to China and the Philippines. It will not; it has ceased to exist.
The Future
To grow, Indian firms will have to find something else. What will it be? The IT-enabled services market is huge, and India has a clear advantage in its cheap labour. However, this is precisely the part of industry that is most affected by India's political unreliability. Wars, riots, political extremism - these are just the kind of bad news that can prevent the growth of IT-enabled services. And our politicians will ensure that such bad news will not go away.
That is why the industry needs business that is more stable and less sensitive to bad news. The big firms will try to climb up the value chain - go into business process outsourcing, system integration, and embedded software. They do not need advice; they are scanning the market and will take informed decisions.
But if they are to continue their stellar growth of the past, they will have to find new niches. If they do not, they will die - but more likely, they will leave India and become American firms.
The largest Indian firms are already international. They are quoted in stock exchanges abroad, they have large offices abroad, and they have acquired firms abroad. For them to scale down facilities in India and go away would be easy; and the loss would be entirely India's. If this is to be prevented, India needs better economic management at home.