India IT Behemoths Revamp Culture to Attract Young Talent, Battle Startups

India's oldest and most distinguished IT firms are doing what would have been almost sacrilegious a few years ago - holding coding marathons to develop innovative fixes and deploying "commando" units to resolve clients' IT woes within hours.

Infosys, Wipro and other Indian IT giants, which rose to prominence during the outsourcing boom in the 1990s and 2000s, have struggled to keep pace with mushrooming startups. The rate of revenue growth has more than halved since 2011-12, partly due to the emerging competition.

Those young set-ups say they go beyond cookie-cutter solutions and argue that they do the job more quickly and for less. They also attract the creme de la creme of India's engineering graduates with their culture of bubble chairs, breakfast bars and table tennis at work, in a way that the corporate, straight-laced atmosphere of the country's IT trail blazers struggles to.

Client demands are similarly changing in India's $147 billion (roughly Rs. 9,38,710 crores) IT outsourcing industry. Major telecoms, retail and banking firms want more than an outsourced help desk, and now demand everything from help solving a server crash overnight to help building an app, industry veterans say.

"When people around you change, moving from a very process-defined model to a much more agile model, it is definitely making a dent in everyone's thinking," said Sanjiv Kovil, Wipro's chief technology officer.

To deal with this, Wipro, for example, has set up small "commando force" units that help get swift solutions by copying a startup environment where small teams move fast. India's third-largest IT services provider has also introduced gaming-like training sessions and so-called hackathons to solve both fake and real client problems.

"It is not the wild west - there is a method to the madness. We have kind of defined the boundaries, but within that we have allowed for a lot of flexibility," Kovil said.

Earlier this month Infosys - long known for its inflexible rules of employee decorum - did away with a formal dress code. The company had already relaxed rules that stopped workers from accessing social networking web sites at work.

At Tech Mahindra, associates and mid-level employees can win quizzes and contests to spend a day with the CEO and exchange ideas, a practice that industry veterans say was impossible to imagine even a few years back.

Bearing fruit
There are some early signs the more flexible approach is yielding dividends.

Tech Mahindra said it won a contract last month to build an electric vehicle charging system for the city of Ontario, Canada, because its flatter structure had allowed the manager responsible to decide alone and move fast with his bid.

To be sure, it is hard for large IT companies, with an army of thousands of employees, to change overnight. Yet, steps as small as implementing a casual dress code and allowing employees to use their own tech devices mark a major cultural shift in an industry that still relies heavily on manpower to win business.

"These changes are cool. I like that they have finally decided that we are adults," said one young Infosys executive who has spent seven years with the firm, declining to be named.

"But the real changes are different - for example, giving smaller teams more authority, that makes more of a difference. That is happening, but slowly."

For now, even small changes should at least help retain the sector's traditionally fickle talent.

"(Young graduates) have access to overseas travel, they are spending time with customer organisations abroad and they are looking at that culture. So they are questioning their organisations," said Asheesh Mehra a senior Infosys employee who quit earlier this month to start his own company, Antworks.

© Thomson Reuters 2015