The Hindu Business Line : `IT cos facing billing problems in UK'

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Chennai Feb. 11 Newly recruited employees of Indian IT companies on short business trips to the UK face a problem - they are not billable for the first six months.

This problem is peculiar to Indian IT companies billing on time rather than project basis.

Employees with less than six months experience in a company only get visitor visas and so the recruiting company cannot bill the client during the time, according to Mr Tom Will-Sandford, Deputy Director General, Intellect, the trade association for the UK hi-tech industry.

Intellect is like Nasscom (National Association of Software and Service Companies) in India. Effectively, an employee should have worked for six months in the recruiting company before getting a visa to the UK and be billable.

He told Business Line, "This is a major concern for the IT industry, not only in the UK but also in India. This issue came up recently from both the UK and Indian companies. We have taken up this issue with our Government. But, I do not know what is the solution."

Mr Will-Sandford was in India as part of the Joint Economic Trade Committee, a bilateral co-operation between the UK and India. The committee meets once a year.

IT was on the top of the table in bilateral relations between the two countries, while the legal sector operates in a closed environment and is at the bottom. He said business projects enabled by IT in the UK were about $3 billion a year and drawing a huge amount of demand. India can tap this market.

"Political sensitivity in jobs and data privacy are two major reasons for Indian companies not being able to make it as prime contractors. It will take time for Indian companies to become prime contractors. Time will do it. Just be patient," he said.

Within the UK the cliché was to talk of China and India as threats.

However, the majority of people in UK's IT industry see India as an opportunity to make UK globally competitive.

Both have skills problems, and in the UK it is an expensive environment and cannot compete with India, he said.

Challenge

A challenge for Indian companies in the UK was becoming prime contractors of big IT contracts, including government contracts.

The three big companies - IBM, EDS and Accenture — dominate the UK market getting majority of the contracts by volume — `turnover may be,' while Indian companies become sub-contractors for the prime contractors, he said.

Indian companies cannot just compete globally on cost alone, as wage inflation is about 15 per cent annually.

"They need to go up the value chain and try to do the McKinsey level consultancy, and that is what big players do. Use skills effectively," he said.

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