Mohan Ramanathan has a few observations about how IT in India works – and in his opinion, Indian IT isn’t growing up. Ramanathan notes how Indian IT companies generally work on a time and material basis, but this isn’t a successful way to grow the IT industry in the country. Instead, he explains, IT needs to depend on the fixed bid model to “grow up”: Working on a fixed bid model requires the industry to be more mature. The pay-off is of course, much higher. You need accurate estimation capabilities, a solid base of knowledge about the job to be done, project management control and above all you need the experience. When a project is taken up on a fixed bid, every possible measure to deliver at the lowest cost is employed – adequate tools are deployed, solutions are innovated and the productivity leaps from one project to the next. Today the IT industry’s productivity comes from experienced people, continuity of resources in the project and a few notches by tools if the tools are being paid for by the customer! The danger is this: T&M contracts don’t build a value chain. There are regions across the world that are able to perform what has typically been Indian IT’s core work for less money (leaving Indian IT struggling to find outside work from foreign companies). By moving to a fixed priced model, Indian IT can spend more time on quality and development of processes, making for a more robust, dependable, and harder-to-imitate quality which can help grow Indian IT into a stronger player on the world market.