The economic model in most IT firms in India has not kept
pace with the changing nature of the services they provide. As a re-
sult, revenue growth is tied to the number of employees—a legacy
of the cost arbitrage business model. For a firm to go from $2 bil-
lion in revenue (60,000 employees) to $10 billion, it has to recruit
approximately 240,000 more employees in a very short period of
time. Needless to say, the time is ripe for a fundamental reexami-
nation of this business model. We must add that we do not know
a single senior manager in the IT industry in India who does
not understand this problem at an intellectual level. However, all
their business ...