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NDTV Profit - June 27, 2007
New quality benchmarks to hurt IT industry
Tuhina Pandey
India's IT industry is trying to increase the number of HIB visas but there could be a lurking threat from another US agency.
The Software Engineering Institute (SEI) that sets certification benchmarks for the software sector is coming down hard and saying that they are not meeting certification parameters.
SEI wants Indian IT companies to re-audit for Level 4 & 5 status that will certify them as mature companies in terms of quality. This is a certificate that almost all top 200 IT companies including the top 20 IT companies heavily rely upon to bag contracts.
These top 20 Indian IT companies account for approximately 50 per cent of the total revenues of the IT sector in the country, about $30 billion out of which $23 billion are exports.
But the time is running out and audits will have to be concluded by August 2007. Each center will have to be certified separately with certification cost per center working out to $50,000 dollars. So for a mid sized company having 10 centers would mean half a million dollars going straight off from its annual profits.
Limited assessors
"Large company impact will be certainly be effected, they have widespread centers and will have to audit all of them the mid sized will have far more difficulty in dealing with the situation, some of them may be disqualified as their overall standards are lower the required," said Ashok Sontakke, Vice President, Quality Assurance, Nihilent.
With only 58 Assessors worldwide and India with only 13, chances are the companies will find it difficult to meet the deadline. Moreover there is still no clarity from SEI on what the parameters will be for the fresh certifications.
Experts say if the new stringent measures were to be adhered to many mid size and small companies may be demoted to level 3 resulting in huge loss of image and business of the Indian companies in the international market.
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