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Old 19th July 2007, 17:19   #1
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Thumbs down TOI : Rising Re makes IT sector work more

BANGALORE: Desperate situations call for desperate measures. That probably explains why several IT companies are today discussing the possibility of asking employees to work more hours - and maybe even on Saturdays - to beat the ravages of the rupee.

Some divisions in Wipro are discussing the option of getting onsite employees, who are typically paid much more than offshore employees ($30 to $80 more per hour), to put in billable hours on Saturdays.

Rising Re makes IT sector work more-India Business-Business-The Times of India


If one IT co does it, I am sure the rest will follow.. such is the herd mentality..

Anyway, I liked the comment in the end from one IT guy - "When the rupee was depreciating, the company never thought of giving us more time to relax. So how can they do this now?"
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Old 19th July 2007, 17:22   #2
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theres a new series of painting by an artist Sanjeev Sonpimpare, article in todays Mumbai Mirror, on the "material world". one painting in the series is
"rising rupee falling man" very apt isnt it.
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Old 19th July 2007, 17:32   #3
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Its not restricted to the IT industry only; any company who earns in forex is working harder. A dip from 46 to 40 equates to a reduction of 15%!
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Old 19th July 2007, 17:33   #4
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Ugghhh more traffic jams and chaos .
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Old 19th July 2007, 17:34   #5
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Unlike manufacturing, longer working doesn't produce better results in IT.

This is the reason why Indian IT cos should concentrate on more value service rather than provider of labour. Many cos are now moving up on value chain, though slowly.

Most IT wokers are already overworked. More pressure will make them ill.
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Old 19th July 2007, 18:26   #6
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There is another angle to it. While the idea of getting people to put in longer hours may have some meaning for Fixed Bids the problem is that most big IT companies are sustained on long term contracts which are essentially on Time & Money principle.

In T&M the clients keep paying a fixed billing rate for say 40 hours per week on an ongoing basis. This is essentially 8 hours per day for 5 days a week. And no matter how many hours the local company here makes its employees work the outsourcing company is almost always loathe to increase the billing hours. I have seen this happen so many times.

Its not going to be easy to put this into practice fruitfully. They will end up making their employees put in longer hours without proportionate rise in billing hours.
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Old 19th July 2007, 18:31   #7
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Quote:
Originally Posted by Zappo View Post
There is another angle to it.
I think you got the terminology wrong. the points are valid.

T&M is time and material, which is a variable billing.

FP (fixed price) has a fixed revenue irrespective of hours put in.

of course then we have variants like T&M with fixed upper limit. FP with certain penalty/overworked clauses etc.

I am sure WIPRO guys are talking about the T&M projects. But client is not stupid enough to suddenly start paying 10% higher than usual.

Last edited by vivekiny2k : 19th July 2007 at 18:32. Reason: GOSH! it's material
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Old 19th July 2007, 19:01   #8
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Quote:
Originally Posted by sbasak View Post
Unlike manufacturing, longer working doesn't produce better results in IT.

I second it. No way this is gonna work out. Making employees work longer will not yield any better results. Infact it might even hinder the employees performance.
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Old 19th July 2007, 19:42   #9
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All rumours! Papers like TOI are good at it!

With IT Industry already facing high attrition rate, they don't have guts to ask the employees to come & work on Sat'days too!
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Old 19th July 2007, 20:01   #10
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Quote:
Originally Posted by vivekiny2k View Post
I think you got the terminology wrong. the points are valid.

T&M is time and material, which is a variable billing.

FP (fixed price) has a fixed revenue irrespective of hours put in.

of course then we have variants like T&M with fixed upper limit. FP with certain penalty/overworked clauses etc.

I am sure WIPRO guys are talking about the T&M projects. But client is not stupid enough to suddenly start paying 10% higher than usual.

I got the terminology wrong? How... oh ok. I said T&M is Time and Money, did I? Sorry, it was an oversight. Yes you are right it is Time and Material and is the variable billing.

But still, the fact is that clients always agree for T&M as an ongoing project. i.e. the variable billing part is on the duration thing more than the hours. For hours most of the clients are shrewd enough to pre-build the hours per day and per week into the contract. As such they will never agree to more hours per day or week. So its not going to be easy to jack up the billing this way.

Although the Fixed Bid (your FP) projects have a fixed revenue flow this is where they probably can make some money by estimation and accounts jugglery. Considering that the X ManHours for a project will probably need a person or two less they show more profitability if the working hours per person goes up. So this is where they may earn something.

But then as most big companies earn a bulk of their revenues from ongoing T&M projects I said in my earlier post I wonder how much the whole exercise will actually bring in terms of revenue.
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Old 19th July 2007, 20:53   #11
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Don't push a point... beyond the edge.
yup. totally agree with that.
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Old 19th July 2007, 20:57   #12
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I thought companies use hedging to overcome exchange rate variations.
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Old 19th July 2007, 21:20   #13
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Quote:
Originally Posted by Zappo View Post
In T&M the clients keep paying a fixed billing rate for say 40 hours per week on an ongoing basis. This is essentially 8 hours per day for 5 days a week. And no matter how many hours the local company here makes its employees work the outsourcing company is almost always loathe to increase the billing hours. I have seen this happen so many times.
They will tell the client that the benefit of billing an extra day is that they will deliver the project faster.. i.e a project which would take 10 months earlier may be delivered in .. say 8 months.. so the cost to the client is the same.. Its the employees who are the losers. They get dumped in the next project.

Its all about packing in as many billing hours per quarter..pack them in like sardines.. thereby increasing revenue per quarter..Its like a rolling treadmill, IT Honchos like NRN Murthy probably know that it will slow down eventually. But heyy.. make hay while the sun shines..

Finneyp, Re attrition, what will pple do if every major IT company does the same thing.. Which company will pple go to??
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Old 19th July 2007, 21:45   #14
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.... Which company will pple go to??
Freelance consultants
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Old 19th July 2007, 22:37   #15
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Re attrition, what will pple do if every major IT company does the same thing.. Which company will pple go to??
I am sure MNC's will not even think of such move, though our desi cos. are capable to do all this stunts.
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