TOI : Rising Re makes IT sector work more

spadival · 19th July 2007, 17:19

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?"

scooby05 · 19th July 2007, 17:22

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.

GTO · 19th July 2007, 17:32

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%!

rjstyles69 · 19th July 2007, 17:33

Ugghhh more traffic jams and chaos

.

sbasak · 19th July 2007, 17:34

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.

Zappo · 19th July 2007, 18:26

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.

vivekiny2k · 19th July 2007, 18:31

Quote:

Originally Posted by Zappo

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.

speedmiester · 19th July 2007, 19:01

Quote:

Originally Posted by sbasak

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.

finneyp · 19th July 2007, 19:42

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!

Zappo · 19th July 2007, 20:01

Quote:

Originally Posted by vivekiny2k

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.

vivekiny2k · 19th July 2007, 20:53

Quote:

Originally Posted by Zappo

__________________
Don't push a point... beyond the edge.

yup. totally agree with that.

artofzen · 19th July 2007, 20:57

I thought companies use hedging to overcome exchange rate variations.

spadival · 19th July 2007, 21:20

Quote:

Originally Posted by Zappo

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??

theMAG · 19th July 2007, 21:45

Quote:

Originally Posted by spadival

.... Which company will pple go to??

Freelance consultants

finneyp · 19th July 2007, 22:37

Quote:

Originally Posted by spadival

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.

19th July 2007, 17:19	#1
spadival Senior - BHPian Join Date: Oct 2004 Location: Melbourne, AU Posts: 1,773 Thanked: 26 Times View My Garage	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?"
	() Thanks

19th July 2007, 17:22	#2
scooby05 Senior - BHPian Join Date: Jul 2005 Location: Mumbai Posts: 1,145 Thanked: 192 Times	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.
	() Thanks

19th July 2007, 17:32	#3
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,517 Thanked: 300,584 Times View My Garage	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%!
	() Thanks

19th July 2007, 17:33	#4
rjstyles69 Senior - BHPian Join Date: Sep 2006 Location: Bengalooru.. Posts: 4,343 Thanked: 842 Times View My Garage	Ugghhh more traffic jams and chaos .
	() Thanks

19th July 2007, 17:34	#5
sbasak BHPian Join Date: Nov 2005 Location: CCU-LTN Posts: 608 Thanked: 14 Times	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.
	() Thanks

19th July 2007, 18:26	#6
Zappo Team-BHP Support Join Date: Oct 2005 Location: Hyderabad Posts: 5,921 Thanked: 2,683 Times	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.
	() Thanks

19th July 2007, 19:42	#9
finneyp Senior - BHPian Join Date: Dec 2005 Location: Bangalore Posts: 2,716 Thanked: 319 Times View My Garage	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!
	() Thanks

19th July 2007, 20:57	#12
artofzen BHPian Join Date: May 2004 Location: VOCI-LHR Posts: 735 Thanked: 68 Times View My Garage	I thought companies use hedging to overcome exchange rate variations.
	() Thanks