The private sector & national competitiveness

Michael Alan Hamlin

Posted on September 20, 2006

Industry must lead development

Delegates to the recent BPA/P-NASSCOM Business Conference in Manila were interested in many of the initiatives the National Association of Software & Services Companies undertook early in its 15-year history to promote India’s business process outsourcing (BPO) industry, especially the software sector, but also contact centers, design & engineering, animation, transcription, and backend business services.

NASSCOM is straight-forward about this role. It’s website includes a page titled “Building the India Brand in Software.” The organization does much more than build the India brand, but everything it does is meant in some way to contribute to enhancing the image of India as a software and BPO powerhouse. For example, NASSCOM publishes an impressive series of industry reports, produces and participates in meetings and conferences, and undertakes projects intended to help maintain quality standards and publicizes their impact.

In the conference session featuring NASSCOM president Kiran Karnik, a delegate asked the high-profile executive how NASSCOM and the Indian government work together. Karnik’s quick response was, “We don’t depend on government.” Karnik made it clear that while government has done some helpful things for the industry, what made India the world’s leading software and BPO hub was the industry itself.

Among the very first things NASSCOM’s founders did was to liberally endow the association to ensure that it had the financial resources required to make a meaningful impact. With those resources in place, NASSCOM set out to achieve a set of key objectives. They included helping the national and state governments formulate policies to support the industry and create jobs, promoting the industry and the Indian brand globally, encouraging members to pursue international quality certifications, moving to uphold intellectual property rights, and expanding the quantity and quality of the talent pool.

It did these things by leveraging what NASSCOM assistant vice president Md. Shahabuddin calls the “Four Ps of India IT-ITES Success.” The first “P” is People. India has over one billion people, and greater than 90 percent are less than 60 years old. About 250,000 electrical engineers graduate annually.

Next is “Process Technologies.” India has more CMM-certified companies – an internationally accepted process credential for software development companies – than any other country in the world. Certification signifies that these companies adhere to international quality standards in developing products.

The third “P” is Practices. Processes are methodologies. Practices are routines that ensure industry integrity, such as data security. NASSCOM estimates that its members allocate from five to 15 percent of their budgets to security. The final “P” is Policies, and this is the area where government has played an important support role by introducing financial incentives for investment, streamlining bureaucracy, and revamping educational curricula.

To capitalize on and sustain these strengths, NASSCOM develops and undertakes a number of project-based initiatives. For instance, to assure a reliable supply of quality workers, the association developed the NASSCOM Assessment of Competence, or NAC. The assessment is useful for both software professionals and their potential employers. For professionals, it provides a credential that immediately signifies they have the skills potential employers are desire. For employers and new investors, it removes the time-consuming and expensive task of conducting their own assessments.

The Philippines is following the NASSCOM lead. For example, the Business Processing Association of the Philippines (BPA/P) promotes the industry, publishes relevant industry reports and surveys, and encourages its members to attain internationally accepted process certifications. The Cebu Educational Foundation for Information Technology (CEDF-IT) has developed a NAC-like assessment with the support of the European IT Service Center (EITSC), called the Philippine Information Technology General Certification Exam (PHIL-IT GCE), for software professionals.

PHIL-IT GCE provides the same benefit to Cebu-based software developers as NAC provides NASSCOM members. However, CEDF-IT’s mandate is limited to support of the Cebu software industry. To benefit a broader group of cities and regions, CEDF-IT managing director Bonifacio Belen hopes that other associations will adopt PHIL-IT GCE, and put it to work outside of Cebu.

Two thoughts come to mind: First, either BPA/P or the Philippine Software Industry Association (PSIA) would be the natural choices for implementing the assessment nationwide. It is likely that funding for this purpose would be available from EITSC or other funding sources. Second, perhaps it would be worthwhile to consider merging NAC and PHIL-IT GCE as the first in a series of cooperative projects BPA/P and NASSCOM have pledged to undertake together.

However that turns out, the lesson of NASSCOM is that industry must lead development, and provide the resources necessary to do so. BPA/P is undertaking some important initiatives that aren’t quite ready to be announced publicly which will enable the Philippine BPO industry to play a stronger role. And more focused organizations like CEDF-IT also have an important contribution to make.

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