Last weekend, the Nigerian internet space was abuzz with conversations on the remuneration packages that Nigerian software developers should be paid compared to their American counterparts. Participants argued back and forth on whether Nigeria should develop a software export scene or demand high salaries and risk losing decently paying remote jobs.
@Nigerianspring said: I’m a Nigerian, although this sounds lovely, I’d prefer a smaller pay difference than equal pay. That way, there is an incentive to still hire us and we still get good pay. Win-win. Equal pay leaves us with less advantage. Getting hired will then boil down to ‘presumed’ skills.”
The comment was in response to an American developer @tanoaksam who said: “A Nigerian developer who performs the duties of a Silicon Valley engineer for a Silicon Valley business should be paid Silicon Valley wages. Full stop, no room for argument, don’t @ me.”
Among the two camps of discussants – those who campaigned for the development of software export capacity and those who demanded higher wages for local software developers, one discussion point stood out prominently and it was the case of the Indian I.T consulting industry, the biggest software export market globally.
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Majority of the participants in the online discussion alluded to the Indian IT consulting model being the best model for Nigeria to adopt, especially in this period of dwindling FDIs and crude oil revenue.
While many argued that $10,000 may be lower than expected to pay a Nigerian Senior developer, the leading argument was that most of the jobs were outsourced to Indian developers almost like clockwork. This begs the question, “What is the Indian software export scene like and why should Nigeria be like it?”
So how much do Senior Developers in India earn?
According to Glassdoor, a Senior Software Developer at SAP India earns, ₹1,643,425 a year which is $22,100; more than double the $10,000 amount that some Nigerians receive for similar jobs.
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The Indian I.T Consulting ecosystem
Based in Bangalore, India, which is now viewed as the Silicon Valley of India, according to the Reserve Bank of India (RBI), India’s software exports in 2019/20 was valued at $128 billion. The United States was the largest importer of Indian software export at 56.6% followed by Europe with a 26.6% share.
Meanwhile, according to India’s National Association of Software & Services Companies (Nasscom), despite a global pandemic and initial uncertainty, the industry registered an overall growth of 2.3 percent with revenues growing to total revenues $194 billion in 2021.
So how does India do it?
The largest Indian I.T Consulting companies are Tata Consultancy services, with revenues of $23 billion; Infosys ($14 billion); Wipro ($8.7 billion); HCL Technologies ($11 billion) and Tech Mahindra ($5.4 billion).
Bangalore’s IT ecosystem comprises hubs like the Electronic City, which was founded in the late 70s as a cluster for I.T consulting in India. Also domiciled within the ecosystem are top I.T companies and academic institutions, building the perfect cluster of talent for both I.T service export and more recently, internal startup service growth, attracting billions in funding.
Infosys for example says its Business Process Management section manages large and complex processes for more than 200 clients – across global locations and industries.
“Most of our clients have been with us for many years, and this multi-year view of engagements has given valuable insight into how transforming processes is key to transforming the business,” they said.
They added that their Process Progression Model (PPM) addresses the complete cycle of objectives of the three stages of progression of a business process – Operate, Optimize, and Transform.
The company’s PPM takes client processes on a journey of progression and continuous improvement. Irrespective of the existing state of the client process/industry/function, the model is geared to transform the process through an evolution curve of higher process maturity.
Infosys added that the PPM is designed, keeping in mind, the complete cycle of Operate, Optimize, and Transform objectives of every business process for its clients which are mostly foreign.
The Indian I.T sector keeps adapting to modern times and today all its leading players have well-defined consulting and change management offerings that can cater to the demands of digital transformation programmes across verticals which has not only made India the preferred destination for large I.T consulting projects but also built a pipeline of independent contractors with experience from the big players in India starting their own smaller software exporting businesses.
Replicating or mirroring India’s IT service exports sector in Nigeria is something that will take time, money and dedication from the government particularly in the areas of policy creation and the development of critical infrastructure for education and skill development.
India has worked to create clusters and invest in education to make the skill pipeline ready. Nigeria, which has the advantage of being in the same time zone as Europe, can hack the Indian opportunity to clinch some of the 26.6% of $128 billion paid to Indian developers, an amount which is projected to increase in the near future.