In My Opinion: Sunny Gupta, Apptio

BUSINESS & TECHNOLOGY

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VC Talk: Rajeev Srivastava, Basil Growth Fund BPO Special
PUBLISHED SINCE 1997 IN THE U.S. & INDIA APRIL - 2011 SILICONINDIA.COM

Nimish Soni Managing Director

Contents April 2011

Cover Story

16

ENGINEERING PROCESSES TO TRANSFORM BUSINESSES

Xchanging
By Vimali Swamy Nimish Soni

06 [In My Opinion] Transforming IT Through Technology Business Management 08 [Infocus]

By Sunny Gupta, Apptio

25 [Business] Making Business Impact Via Managed Services 26 BPO Services & Solutions Be Indian, Buy Indian 28 Connect India
By Rahul Kanodia, Datamatics Global Services By Aparna Challu, Infinite Computer Solutions (Inidia)

36 [Business] Entrepreneurial Lessons for Software Startups 38 [Technology] Companies are Still not Extracting the True Promise of Cloud 40 [Business] Investing in University Spin-Offs 42 [Technology] BPO on the Cloud
By Saurabh Chandra, Neev Information Technologies By Hemant Elhence, Synerzip

11 [VC Chakra]

12 [CEO Spotlight]

RadiumOne raises $21 Million in Series B Funding Hubspot raises $32 Million in Series D Funding

15 [VC Talk] Emerging Trend Potential for IT Service Providers to Obtain PE / VC Funding 22 [Cover Feature] BPO Sector Is Doomsday Near?
By Hari Anil

Web 2.0 is Changing Consumer Pattern! Transforming Outsourcing with Verticalized Solutions U.S. Still a Tough Turf for Mid sized Players

30 [Technology] Cloud Telephony is the New Tool Enabling Crowd Sourcing of Call Centers
By Murthy Chintalapati, Ozonetel Systems

By Milind Godbole, Aditya Birla Minacs

By Vinit Nijhawan, Boston University Office of Technology Development

32 Will Cloud Help You to Spend Smarter and Save Money? 34 [Business] The Changing Face of Indian BPO Industry
By Suresh Yannamani, HOV Services By Ravi Thakur, Coupa Software

By Rajeev Srivastava, Basil Growth Fund

44 [ CEO Speak] Remain Small to be BIG Key trends in the IT Services Market 46 [SI 20 Profile]
Prashant Ranade, Syntel

By Ezhil Arasan Babaraj, CSS Corp Labs

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April 2011

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his time all Indian delegates were excited about worlds billionaire Warren Buffets visit to India and his move to invest in Indian market. This 80 year old $62 billion worth billionaires move to invest 99 percent of his wealth in India indicates a testimony to Indias promising booming economy. Moreover it calls for many of the Indians who have built global companies to take Indian market as a serious one. Well, but is India well versed to foresee its greener pastures? For instance, if you take any developed country, faster economic growth has been attained because the leaders could foresee the needs much ahead, be it heavy investments in infrastructure, massive funding for science and technology, exceptional connectivity, a public-education system that is the envy of the world and generous immigration policies. As a country which has been envied for many such factors, America until now was under the assumption that it is still No. 1. However, today it sees the position dwindling. Now, America is realizing its mistakes and cutting down on the spent as they have the largest amount of debt in the world incurred through wars and aids. As India is taking a similar growth trajectory to further achieve its global ranking, it can take tips from the U.S. about what to do and what not to. India is currently the second fastest growing economy of the world. India's growth potential may well be measured by the facts that India's current economy is worth $1.3 trillion , and is set to grow at an impressive rate of 9.25 percent in coming years. In 1991, when India opened its door to liberalization, we set our growth path open. We achieved in 10 years what we did not achieve in 35 years before liberalization. Today the world is waiting for a similar move interms of FDI investments. The bill to raise the foreign investment cap from the current 26 percent to 49 percent in private insurance has been tabled and is with a Standing Committee of Parliament. Instead of rejecting the bill, the committee should work on closing the loopholes on negative aspects. Now is the need to focus on infrastructure. Even a study by Goldman Sachs states, In the next 10 years, India needs to invest more than $1 trillion towards infrastructure. Recently Infrastructure mutual funds of India have shown great interest in roads, power and railways. One can judge the enormity of investment opportunities in Indias infrastructure by seeing that India is set to invest $500 billion by March12. In the coming years, lets hope to see best days of India much ahead than U.S. Lets see more Buffets docking in India in future. Please do share your thoughts with us. Christo Jacob Managing Editor editor@siliconindia.com

Is Indias Best Days Ahead of U.S?

Editorial

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By Sunny Gupta

The author is President, CEO and Chairman for Apptio

in my opinion

Transforming IT Through Technology Business Management

f you spend enough time with CIOs from large enterprise organizations, you will hear the word transformation thrown around quite a bit. Thats due largely to the fact that CIOs are under increasing pressure to evolve IT from a department that keeps the lights on to one that can transform the business itself. So what strategies and best practices are these transformative CIOs putting in place to evolve their organization to become more business focused? This is what we set to find out when we convened our most recent CIO Technology Business Management Council meeting. More than 65 enterprise CIOs and IT leaders gather twice per year to discuss how they are applying transformational strategies in their organization via the emerging discipline of Technology Business Management, also known as TBM. The vision of TBM is to bridge the widening gap that exists between IT and the business units it serves. For too long now, these CIOs have had to combat the perception that IT is too expensive and demonstrate the business value that IT provides to the business. And with clouds quickly gathering on the technology horizon, it has become even more important for IT leaders to be able to clearly articulate the value of IT to the business in a language the business understands: finance. One way to think about the New IT is in the context of a classic supply chain. To truly understand your cost of goods sold (COGS), you need to also understand the fully burdened costs of all the raw materials that comprise the finished product. In the supply chain of IT, these raw materials consist of everything from data center facilities and labor costs all the way up through the server and application tier. Taken
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together, these components make up the IT services that the business units eventually consume. However, getting a handle on what these services actually cost to deliver and how they are being utilized has up until now been more dark art than science. Could you imagine a manufacturing floor running at 10 percent utilization? IT should be no different. In order for CIOs to effectively run IT like a business, they require a new set of purpose-built tools that can unify financial metrics (i.e., GL, payroll, and more) with key utilization metrics (i.e., server usage, ticketing, and more). Just as a modern manufacturing enterprise could never imagine running their business without an ERP system in place, todays CIOs are demanding new performance metrics that provide the same level of cost transparency and accountability from their organization. Among the three presenters at the last council was Rebecca Jacoby, CIO for Cisco who is currently in the midst of a multi-year services transformation initiative and Charlie McNerney, GM for Microsoft Global Foundation Services, which represents one of the worlds largest IT deployments. What follows are four best practices identified by our panelists: 1. CIOs require a Purpose-Built Management Suite - Whereas every other enterprise function relies on a business performance suite to run their operations (think CRM for sales or ERP for finance), IT is often reduced to spreadsheets and ad hoc tools to manage their own business. So when the CEO asks a seemingly simple question, such as how much money will we save if we virtualize 15 percent more of our data center? the CIO often gives estimates based on assumptions, not actual data. CIOs will not succeed in running the business of IT until they can employ the same scorecards and dashboards that their

C-level peers have been using for years now. 2. Do not wait for 100 percent Clean Data: Many IT leaders are reluctant to kick off their transformation initiatives until they feel confident that their data is thoroughly clean and accurate. The rationale being that if you start with bad data you will end up with a faulty output (i.e., Garbage-In-GarbageOut). However, as many companies

CIOs will not succeed in running the business of IT until they can employ the same scorecards and dashboards that their C-level peers have been using for years now.

4. IT Transformation Starts with Culture CIOs with IT transformation projects on their agenda must recognize that the cultural changes are just as important as the technology decisions that are ultimately made. Re-

to the business. As Charlie at Microsoft is fond of saying, if you make the facts available, eventually rational minds will prevail.

who have embarked on their own transformation journey will attest, you are actually better off jumping in and letting the data clean itself. Rebecca, When I worked in supply chain we had a similar issue. We were going with a new tool and had two plant managers. One said he wouldnt use it until the data was 100 percent complete while the other guys said, I get it, it is 90 percent accurate now. The one that was 90 percent accurate was actually 100 percent accurate within a month. The other one took a year. Its amazing how accurate the data becomes once you start using it.

Sunny Gupta

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3. Cost Accounting is the New IT Skill: Forget ITIL certifications. One of the most overlooked and essential skill for tomorrows IT manager is basic cost accounting. At Cisco, every single person in Rebeccas organization is going to be required to take a basic web-based class on cost accounting. Without this foundational skill, IT managers are unable to provide meaningful cost analysis back to the business. For instance, while calculating unit cost information at the server level might be of interest, understanding and communicating the variance in cost is much more valuable

becca at Cisco has implemented strategies that address the cultural aspect of their services transformation. To ensure cross-functional support for their own services transformation initiative, Rebecca established management cohorts which are small groups (12-15 people per group) each with their own designated leader. These cohorts meet eight times per year for two hours per session with a goal of sharing leadership strategies and best practices. According to Rebecca, these cohorts have been instrumental in terms of getting everyone to buy into the notion of transformation. The bottom line is that transformation is a journey, not a sprint. There is a tendency for people to confuse innovation and transformation because they both imply the same thing: change. However, there is a subtle and important difference between the two: whereas innovation implies changing what is, transformation suggests creating whats new. For todays business oriented CIO, this is exactly what is needed an entirely new methodology to quantify the cost, quality, and value of IT and be able to communicate it in a language the business understands. si
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April 2011

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Net Commerce in India to Reach $10.4 billion in 2011

he Indian ecommerce industry is expected to grow by 47 percent and touch `46,520 crore ($10.4 billion) by end of 2011. This was indicated in a study by the Internet and Mobile Association of India (IAMAI). The report said that the market which was at `8,146 crores in 2007 came a long way from there and reached an estimated `31,598 crores by 2010. The report also points out that it is the online travel industry that is leading the market. The online travel industry was `6,250 crores in 2007 contributing about 77 percent of the industry then. In December 2010 this industry stood at `25,258 crores, about 80 percent of the total ecom-

any Indians and IndoAmericans are included in the list of Young Global Leaders for 2011. The list by the World Economic Forum consists of 190 individuals from 65 countries. According to the forum, the people who received the Young Global Leaders award received it for their professional accomplishments, commitment to society and potential to contribute to shaping the future of the world. The list includes Indo-American personalities like Nikki Haley, South Carolina Governor; Vivek Kundra, U.S. Chief Information Officer; Gita
siliconindia

Many Indians Gain Position in the Young Global Leaders List

Gopinath, Harvard University economics Professor; Sandeep Chatterjee, SourceTrace Systems Co-Founder; and Saleem Ali, University of Vermont environmental studies Professor. Indians like, Members of Parliament Meenakshi Natarajan and Deepender Singh Hooda; Ocimum Biosolutions Founder and CEO Anuradha Acharya; Sanjay Chandra, Managing Director of real estate firm Unitech; Priya Hiranandani-Vandrevala, Hirco Group Founder and Co-Chairman; Manish Khera, Financial Inclusion Network and Operations CEO; Chetan Maini, Mahindra Reva Deputy Chairman and CTO;

merce market and is expected to grow to `37,890 crores by December 2011. As of 2009, second to online travel comes eTailing with 7.82 percent share which equals to `1,550 crores. In eTailing, computers and computer peripherals account for `560.52 crores while cameras, mobiles and MP3 play-

ers contribute `389 crores. Other major contributors to net commerce include online classifieds (jobs, online matrimonial, cars, real estate and others), buying movie tickets, food delivery and gaming subscription is estimated to be `1,210 crores. Financial service transactions over the Internet comprise nearly 7.8 percent of the market size, which is about `1,540 crores. According to the report Indian online users have exhibited willingness to make purchases over the Internet and this attributes to the growth in net commerce industry. Given the increasing awareness and acknowledgement, the overall industry is set to experience a high growth in the next couple of years.

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Shaffi Mather, Ambulance Access for All Co-Founder; Ramakarthikeyan Srikrishna, founding Partner and Head, global strategy, sales infrastructure, HCL Technologies; and Bhavin Turakhia, CEO at Web products marketing company Directi, are also part of the list. The 2011 honorees will now be part of a broader forum of 668 Young Global Leaders worldwide. They will participate in World Economic Forums events, including its annual meeting in Davos, Switzerland, the annual meeting of the New Champions in China, and the forum's regional meetings worldwide. si

India is 10th Among the G-20 Countries in Cleantech Investments

lobal clean energy finance and investment grew considerably in 2010 to $243 billion, a 30 percent increase from the previous year. China, Germany, Italy and India are among the nations that most successfully attracted private investments; points out a new research by The Pew Charitable Trusts. The report ranked India at the 10th position for its five year growth

niversity of Buffalos Provost Satish K. Tripathi is recommended by Chancellor Nancy L. Zimpher of the State University of New York as the next University of Buffalos President . It would make Dr. Tripathi, UB's 15th president and the first born outside the United States and leader of the largest public university in the state during what's considered a critical time in its history. Tripathi is an internationally recognized computer scientist who joined UB as Provost - the university's Chief Academic Officer on the 1st of July, 2004, after serving as Dean of the Bourns College of Engineering at the University of California, Riverside. This opportunity will make Patna born Tripathi, the first Indian American to head a Research University which is a part of the American Association of Universities. Chancellor Zimpher has re-

University of Buffalo Gets its First IndoAmerican President

quested the State University of New York Board of Trustees to convene a special meeting in April in Buffalo to formally consider Tripathi's appointment for the post. She also named Tripathi as UB's officer-incharge, effective immediately, with all of the responsibilities and authority of a campus president. Tripathi said, It would be my distinct privilege to lead our remarkable university, which is recognized for its tradition of excellence and has an extraordinary future ahead.

Speaking at the occasion, Chancellor Zimpher said, "It is my great pleasure to recommend Dr. Satish Tripathi as the next President of the University at Buffalo. Dr. Tripathi's international reputation as an accomplished researcher and transformative leader in higher education makes him ideally suited for this post. Public research UniSatish K. Tripathi versities like UB provide access to high quality, affordable education and engage in research that helps build vibrant communities at home and across the globe. Dr. Tripathi will provide outstanding leadership for UB as it carries out this important mission."

rates in renewable energy capacity and seventh position worldwide in the amount of installed capacity. The list is dominated by China with its record $54.4 billion in investments in 2010 represents, a 39 percent increase from 2009. Germany came second in the G-20, up from third last year, after experiencing a 100 percent increase in investment to $41.2 billion. While U.S. lost its sec-

ond position and settled with a third. U.S. had maintained the top spot until 2008, till China displaced it. United Kingdom experienced the largest decline among the G-20, falling from fifth to 13th. According to the report, the uncertainty surrounding clean energy policies in countries like UK is causing investors to look elsewhere for opportunities. si
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April 2011

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MIT Honors Two Indian American Professors
wo Indian-origin professors are among the four to have been named 2011 MacVicar Faculty Fellows for their outstanding undergraduate teaching, mentoring and educational innovation at Massachusetts Institute of Technology (MIT). Bishwapriya (Bish) Sanyal of the Department of Urban Studies and Planning; and George Verghese of the Department of Electrical Engineering and Computer Science were honored along with Christopher Schuh of the Department of Materials Science and Engineering; and Patrick Winston, of the Department of Electrical Engineering and Computer Science.

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Bishwapriya Sanyal, who received his PhD in urban and regional planning from the University of California at Los Angeles, joined the MIT as a faculty in 1984 and served as the head of the Department of Urban Studies and Planning from 1994 to 2002. He also chaired the MIT faculty from 2007 to 2009. Sanyal, currently the Ford International Professor of Urban Development and Planning, also directs the SPURS/Hubert Humphrey program at MIT for mid-career professionals. George Verghese is a Professor of electrical engineering and has been part of the MIT faculty since 1979. He received his B Tech from

the Indian Institute of Technology, Madras in 1974; his MS from the State University of New York, Stony Brook in 1975; and his PhD from Stanford University in 1979, all in electrical engineering. It is certainly in the spirit of Margaret MacVicar's commitment to students that we award these prestigious fellowships and recognise the creative efforts of MIT's outstanding teachers. This year's fellows are deeply committed advisors and mentors, they have led important curriculum changes and made significant contributions to programs in student life, says MIT Provost L Rafael Reif.

adiumOne, an online advertisement company that leverages social media for better advertising performance, closed a $21 million Series B funding. The funding was led by Crosslink Capital, other investors include DFJ Esprit, and previous investors Adams Street Partners and Trinity Ventures. The company is planning to use this funding for international expansion and acquisitions. It recently opened its UK office, and in the coming months will be launching in continental Europe and Asia Pacific. Our goal at RadiumOne is to use social data to change online advertising for the better, and make a positive measureable impact on advertisers and consumers, says Gurbaksh Chahal, Founder and CEO,

RadiumOne raises $21 Million in Series B Funding

RadiumOne. The social evolution of the Internet has given us an opportunity to do this, and we feel we are filling the void of socially-targeted advertising outside of Facebook. This latest round of funding will accelerate our growth, and allow us to make the moves that will truly establish RadiumOne as the pioneer in bringing social advertising to the open web, adds Chahal. Since its inception 18 months ago, RadiumOne has worked with over 200 Fortune 500 brands. When we look at potential portfolio companies, we try to identify who has the technology and vision to really disrupt an industry and make a global impact, says Jim McLean, partner at Crosslink Capital and new member of Radiu-

.S. President Barack Obama has nominated two Indian American women to key posts in his administration. Chicago based Deepa Gupta has been nominated as member of National Council on the Arts, while Nisha Desai Biswal has been named as member, Congressional-Executive Commission on the People's Republic of China. Apart from these two, seven others have been nominated to key administration posts. I am grateful these accomplished men and women
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Two Indian American Women Nominated into Obama Administration

have agreed to join this Administration, and I'm confident they will serve ably in these important roles. I look forward to working with them in the coming months and years, said Obama. Gupta is a Program Officer for Media, Culture and Special Initiatives at the John D and Catherine T MacArthur Foundation in Chicago, where she manages the Foundation's grant making in arts and culture in Chicago and the MacArthur Award for Creative and Effective Institu-

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tions. She is also a board member of the National Kidney Foundation of Illinois and an advisory board member of the Cure JM Foundation. Nisha Desai Biswal currently serves as Assistant Administrator for Asia at the U.S. Agency for International Development (USAID), which she would continue to hold. In the past, she has also worked with the American Red Cross both in their Washington headquarters and overseas as an international delegate in Armenia, Georgia and Azerbaijan. si

ubSpot, vendor of an all-inone marketing software platform for small and medium sized businesses, raised $32 million in a Series D funding round. The company was founded by Brian Halligan and Dharmesh Shah in 2006. Sequoia Capital, Google Ventures and Salesforce.com, all participated in this round of funding, which made Hubspot the first company that got funded by all these three investors. Apart from them all of HubSpots existing venture capital investors General Catalyst, Matrix Partners, and Scale Venture Partners - also participated in this financing round. The companys all-in-one marketing software is used by over

Hubspot raises $32 Million in Series D Funding

mOnes board. We have seen it firsthand with companies like Pandora, and we know that RadiumOne will be extending that same disruption into the display advertising ecosystem, says McLean. This round brings the total funding raised by the company to $33.5 million.

Gurbaksh Chahal

4,000 businesses. Dharmesh Shah, Co-founder and CTO of HubSpot commented, We founded the company based on a simple premise: Businesses want an easy-to-use, complete and integrated marketing

Brian Halligan and Dharmesh Shah

platform that helps them get more leads and customers. We plan to use this new capital to further invest in this ambitious vision and further our existing lead in the marketing software category. We back companies that are transforming their industries, says Jim Goetz, General Partner at Sequoia Capital. HubSpot is the emerging category leader in the SaaS marketing sector. Their customer base exceeds that of all the other relevant marketing software companies combined, including Eloqua, Marketo, Genius, and Manticore, he adds. Part of the $32 million will provide liquidity to some existing shareholders. It has so far raised a total of $65 million in funding. si
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April 2011

CEO SPOTLIGHT

CEO SPOTLIGHT

Web 2.0 is Changing Consumer Pattern!

Ankesh Kumar, CEO, Sharetivity

his is the era of Internet and there is a large movement towards consumer shopping. It is different from what we saw in Web 1.0 which was shaped by Amazon and eBay. Now, the same is undergoing a re-invention as consumer behavior like how people purchase, how they make decision, how companies cater to those purchases and more are making in-roads. Today the shopping is research based and mobiles have come to play a very important role. There are apps to help consumers get instant reviews on what is out there in the stores before they go out there to make a physical purchase. Similarly, Web 2.0 led by social networking is forcing the consumers to change their purchasing behavior. Facebook and Twitter has leveraged social interaction tremendously and this is having a direct impact on a consumers purchasing behavior. One can easily connect with their friends and ask for their opinion before making a purchase. For Startups today, it is important not only to build a cool product but also bring innovation into the business model so that it is
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monetizing. This is important in terms of funding as VCs are becoming more and more discriminating into what and where they invest. With globalization, the biggest challenge for an entrepreneur is to collaborate with his teams across the world. Ten years ago, when one started a company with 5 or 6 people in the office, one could walk to someones desk and ask how the UI is developing or how a mobile app coming along. But now with the emails and twitters and setting up a collaboration projects online with the teams virtually, is a challenge when quality comes into question. The next challenge is to find the right people to either join you or become partners with. With a lot of people out there doing similar work; to find the right partner can involve a lot of prescreening. In case of large companies the problem is that the right hand doesnt know what the left hand is d o i n g . Ankesh Kumar

They launch a project, there is another team doing a similar project and a lot of miscommunication tend to happen. Apart from these challenges, it is fairly exciting times to be an entrepreneur. si

he IT enabled services industry is projected to grow at 9-10 percent both in international and domestic market. There are several trends that are driving the industry today. Foremost is the emergence of new geographies as a potential near-shore center. Most BPO providers today, are identifying new geographies to set up centers that are in close proximity to their customers. For example, shore for U.S. near shore center would be in South America and for Europe it could be in the Asia Pacific region. Another thing that is being seen clearly is that factors like call cost arbitrage, availability of pool of English speaking professionals, IT educated professionals and more can no longer be called differentiators for India. Today, these have actually become the basic tools for operating within the BPO space. This is something you need to have on the table when you go bid for a contract. What we can call a differentiator now is what can we add. What value add can one bring to the client over and above these basic tools. The other trend could be providing end to end transformational outsourcing, where we are talking about

Transforming Outsourcing with Verticalized Solutions

Manoj Malhotra, CEO, Salient Business Solution not just going to the clients and telling them this is what we offer, but rather asking them what they need and then providing a customized technology enabled verticalized solution with services that are needed by the client. This is the kind of expectation a client has from a service provider today. Hence, one needs to develop niche and differentiator within a vertical. Apart from this, one also needs to have specific domain knowledge, understanding of the industry trends, knowing what works and does not work within the industry and more, if you are to operate in that vertical. Additionally, clients today want their service providers operate on an OPEX based model rather than a CAPEX based model. Another norm today is process engineering and innovation, where one is looking beyond the tried and tested ways of doing the work. How can we improve upon the entire experience of what is being done by using ones knowledge that has been gained through working for multiple clients in the same environment. This is the transformational business impact which the client is expecting the service provider to make. This is a growing trend that we see which transcends across various vertical

that any BPO is expected to operate in. My advice to entrepreneurs today is to pick your space and look at customizing and specializing in that. They need to focus on areas which are skill based, more vertically oriented, domain oriented and where technology enablement can also be used. This is because managing a manpower incentive or a capital incentive business with some of the more commoditized players will become very difficult for a new player to come in. si
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Manoj Malhotra

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April 2011

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April 2011

CEO SPOTLIGHT

he IT services industry, as we all know, was badly hit by the recent financial recession and is currently in the recovery phase. It was the mid sized companies, who heavily depended on the U.S. market, suffered the maximum impact of the recession. Nonpayment, bankruptcy, inability of acquisition of new accounts is some of the prime issues that still continue to haunt the mid sized players. In order to attain a speedy recovery, we at Globsyn moved our focus towards the domestic market and have managed to outrun the recession. We also shifted our operations to Malaysia and have even opened up a new office in Singapore there is very good demand for IT services in these markets; from consulting practices to implementation of SAP and ERP. That is an area in which we are also offering our services and have grown a lot. Also focusing in new sectors and markets helped us stay balanced when the U.S. was in the grip of the recession. But I see the market turning around to normalcy in the U.S. by the first quarter of 2012. Earlier the approach towards off shoring was narrow, but now it has become more diversified and multilayered. Even people are coming
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U.S. Still a Tough Turf for Mid sized Players

Bikram Dasgupta, CEO, Globsyn technologies from a very vast set of specializations, while the requirement is getting much more narrow and focused. Fundamentally India is an off shore country where we need to do services from start to end, and when we do this, technology is not the whole part. There are methodologies, software engineering elements, project management elements, and several other elements that are getting refined and developed every three months, so for the last 18 months the main focuses of the companies are to keep up with this. This is a major trend in the industry now. Still, getting the right person for the right job remains the main challenge. This is a problem we are continuing to address. The most fundamental thing about being an entrepreneur is that you should be addressing an unaddressed problem or gap in the society. And if this identifies with your passion, your chance for success will multiply by many times. If that gap is not there then it will be a tough job as you will be fighting with too many people. On a more philosophical level I believe, You become an entrepreneur because you believe there is more to life. si

Bikram Dasgupta

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ccording to Gartner, global IT Service spending in 2010 was approximately $800 billion but there seem to be very few, if any, PE / VC firms that invest into IT Service providers. The focus of any PE / VC company is to ensure a huge upside for its investors and the only way to ensure the same is to invest into an IT product company that would become the next blockbuster product. The tremendous success of a winning product ensures that there is a huge non-linear / exponential growth to both the top-line and bottom-line, critical to driving huge valuations. IT Service providers are very dependent on strong hiring and training engine to drive the growth of the company, as the revenue growth is tightly coupled to the staff strength. Acquiring & retaining quality staff is a huge challenge that most of the IT majors have been trying to overcome. This lends unpredictability to the growth of the service provider - a major deterrent to obtaining investments from PE / VC firms. Other important factors that drive valuations are differentiated service line, offshore and onshore mix, growth model, and more. With global enterprises looking to reduce the Total Cost of Ownership of their IT assets, they are seeking alternatives to existing IT strategies. As a result, we are seeing an in-

The author is Managing Partner, Basil Growth Fund

VC Talk: By Rajeev Srivastava

Emerging Trend Potential for IT Service Providers to Obtain PE / VC Funding

creasing interest in adoption of SaaS, Cloud Computing and Open Source technologies that are likely to increase the role of the IT Service providers. Gartner, in their report, Gartner Predicts 2011, highlighted that by 2015, tools and automation will eliminate 25 percent of labour hours associated with IT services. Clearly, the successful IT Service providers of tomorrow would be the ones that provide value to their clients using a mix of pure play services with accelerators that reduce the time to adopt / deploy new solutions. Another challenge for small and mid-sized IT Service providers is the plateau effect. Very few IT Services companies have been able to cross the chasm to becoming a great big provider of niche services. The challenges faced by the promoters vary across: lack of professional management, constant worry on working capital, lack of access to a group of advisors who could be the sounding board with skin in the game geographical spread size of company to provide confidence to major enterprises to entrust key projects We, at Basil, see a tremendous potential in providing growth capital to IT Service providers that have a very focussed and niche offering with a proven business model that has a potential to scale. Our experience with this model has convinced us that gone are the days when one could create huge organisations providing generic IT Services (this would have been relevant in the 80s and 90s). The need of the hour for CIOs is a partner that is best fit and solves a very specific problem for them someone who they could trust completely to solve the problem at the earliest, as opposed to eventually. Open Source, Cloud & RIM, Identity & Access Management, Enterprise Mobility, Integrated Customer Interaction Management are some of the niche areas where we see tremendous opportunity for IT Service providers to compete on a level-playing field with the IT majors. Our advice to promoters seeking investment would be to ensure you have a differentiated, niche offering with accelerators to provide value to your clients. Prior to aligning with a PE / VC, ensure you interact with the partners in the fund and their past investments to understand their valueadd across Strategy, Sales & Marketing, Finance & Administration and HR & Recruitment. si
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Rajeev Srivastava

April 2011

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April 2011

Cover Story

stablished in 1999, Xchanging India, the Indian subsidiary of UK based Business Processing and Technology Services Company, Xchanging, is bent on more than transforming the core model of providing business processing services; it hopes to revolutionize it with a strong 3500 technologically competent teams across Gurgaon, Mumbai, Pune, Bangalore, Chennai and Shimoga, Xchanging India today is outperforming several of its competitors in delivering mission critical, high volume domain specific processing to its customers in a wide range of sectors banking and financial services, manufacturing and logistics, insurance, public sectors among others as well as horizontal offerings that cover areas such as procurement services, accounting, human resource and technology. When Xchanging, a leading Business Processor formed an enterprise partnership with Deustche Bank, one of the prominent banks in Europe, it had brought an all new meaning to the word business transformation that had been the buzz in the BPO industry for some time. According to this, instead of just taking outsourcing contracts on a simple fee-for-service basis, Xchanging would form joint ventures with the client to perform their back-office functions. Xchanging has operational control and the partner has boardroom representation. As processes are standardized, the EP can add third-party outsourcing contracts, benefit from scale advantages, and begin to generate revenues. We are not just a business process outsourcing unit. We are more oriented towards outcome based outsourcing. It is not about adopting back end jobs and taking responsibility of operations accomplished at a lower cost but to share the risk, responsibility and performance with our customers. says Nimish Soni, Managing Director for India. And has this worked? Definitely a yes, its success evidenced in the seven joint ventures that have been formed since then.

ENGINEERING PROCESSES TO TRANSFORM BUSINESSES

By Vimali Swamy

Xchanging

Nimish Soni Managing Director

Carving a niche for itself / Building Core Competency Despite a myriad of service offerings, the companys core competency continues to be the BFSI segment. Xchanging is one of the largest provider of policy checking, production, issuance and premium collection services, with over 400 insurers, reinsurers, managing agents and syndicates as customers, the company handles millions of electronic transactions annually in a global business-tobusiness network with a throughput of over $124 billion and provides certainty of payment managing an efficient transfer of funds between trading partners. Today, it is one of the large providers of commercial insurance business processing and technology services with significant expertise in Commercial Property and Casualty services. Xchanging has a suite of offerings based on the integration of ITO and BPO for the Commercial Insurance and P&C Marketplaces. Its number of customers and over 1500 BPO and ITO staff make it one of the prevalent providers or Platform Based BPO to the Commercial Insurance Industry. Its commercial Insurance and P&C specific platform based BPO offerings include, new business and underwriting to improve underwriting profitability, reduce acquisition time for policies, improve time to market and profitability for products, improve profitability on policies and risk exposure; policy servicing to reduce the overall administration costs and errors as well as improve premium collections; claims optimization for reducsiliconindia

This is quiet a phenomenal achievement considering the recent upheaval the BPO industry witnessed in the last 2-3 years. So what makes it tick? Continuous innovation, a healthy work culture and thinking long term sustainability, Nimish is quick to respond.

ing the combined ratio, faster and more efficient processing, improved subrogation, and investigative services; brokerage services for rapid processing and placement of new business for Brokerages, account, and contract management. Business Transformation: Driving Success The BPO industry especially in India is a highly competitive one. Everyone is talking about value added services and providing outcome based services. If one takes into account the skill set and size, pricing models, there is hardly any difference gap in the top 56 BPO players in the country. So where does one set its uniqueness? In case of Xchanging it is not competence but rather execution, says Soni. Apart from this, the company has been making quite an impact amongst its customers by not only executing the

Xchanging India is slowly emerging as a strong solution provider in the subcontinent; this comes through the efforts of an able leadership team at the helm of affairs. Soni is supported by a dynamic team which has been together for almost a decade. Milind Joshi-Director for Production, Srikrishna M Chief Financial Officer, Srikantan Hosur Director Quality Assurance and Himanshu Bhardwaj as Head of Service and Sales.

required functions perfectly but in a way completely transforming the way a process is managed. One such example of transformation is its work for London market associations. In 2005, when Xchanging embarked upon a program to move the London insurance market (the worlds largest) from a paper-based to an electronic environment for improved efficiency and lower costs. The key technology component that underpinned this initiative was a document management system called the Insurers Market Repository (IMR) IMR is a key piece of infrastructure for the London Insurance Market. It supports the electronic processing of premiums, policies and claims through the Accounting and Settlement (A&S) and Electronic Claim File (ECF) solutions. The IMR enables its users to create, maintain and submit premium, policy and claims documentation direct to Xchanging and share docuHimanshu Bhardwaj ments with their trading partners, Head of Service & Sales eliminating paper and increasing processing speeds. Xchanging Customer experience and building developed and delivered the IMR long term partnerships are at the over a period of years in partnerheart of our delivery approach, we inship with the Trade Associations. vest in deepening these relationships Today it remains an essential feaand in turn knowing our customers ture of the Market change probusiness goals and challenges better. gram championed by the Market " We are delighted to have all of Reform Group (MRG). our customers as referencable and have successfully expanded almost all Following the successful imof our partnerships " plementation of the IMR,

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Xchanging, last July, signed another contract with the leading London insurance market associations the International Underwriting Association of London (IUA) and the Lloyds Market Association (LMA) to build an eAccounts capability on the existing infrastructure. This capability now further enhances the electronic submission of accounting entries to Xchanging by brokers and insurers. As part of the contract, Xchanging will also provide a Carriers Accounting Entries service. As a result, the creation of premium accounting splits, which is currently done by brokers, will be managed by Xchanging. The e-Accounts capability will deliver a number of benefits to insurers as well as brokers. It will enable earlier settlement of cash items through faster, standardized processes, increasing the flow of business to the London market. It will allow brokers to submit premium closing data to Xchanging using industry standard ACORD messages and largely eliminate rekeying data by Xchanging. Additionally, it will reduce the work load for brokers in reconciliation of accounting entries and support a common accounting process for bureaux / nonbureaux premiums. Chief Executive of the LMA, David Gittings, adds, This is another key step in making the London market more attractive for brokers to deal with. The e-Accounts project illustrates the markets commitment to be the leader through technology powered processing. Xchanging designed, delivered and continues to operate the IMR for the London insurance market. The IMR is today the largest processor of ACORD messages the global industry standard for message exchange. An average of 20,000 ACORD messages is processed on the IMR every day. With over 6,500 registered users worldwide and 250 connected brokers, managing agents and

ITO service o erings

Banking and Financial Services Shipping Oil and Gas Logistics Real Estate Insurance Manufacturing Media and Entertainment Public Services

Shared Services and Hybrid Model Xchanging has one of the strongest Insurance practices in India with com-

insurance companies, the IMR has delivered a fully electronic environment for faster, more accurate and reliable service to end customers. It has removed capacity constraints and standardized process across the London market to allow for growth. The IMR is a central part of the ongoing London market transformation program. This is just one of the many successful engagements of business transformation by the company.

*To know more contact at Sales@asia.xchanging.com or Himanshu.Bhardwaj@asia.xchanging.com

petencies spanning across premiums, claims, technical accounting and underwriters-brokers back office services. Its footprint is spread across six major cities and nine processing centers supported by a strong team of 1500 dedicated insurance professionals engaged in business processing and technology services. But companies operating internationally require a consistent standard of service globally. Xchanging, today is one of only a handful of BPO providers able to able to meet these requirements through its global delivery capabilities through well balanced onshore, near shore and offshore presence. Hence, in times of
Outsourcing at Xchanging is about sustainable value delivery through aggregation, simplification, technology enablement, supported by spreading cost arbitrage beyond the Tier 1 locations globally.

Srikrishna M, CFO

any kind of natural disaster or regional disturbances any process can be transferred between the centers offering uninterrupted services to clients. The company also brings tremendous experience in setting up offshore shared services and hybrid captives,
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most suited, for customers looking at achieving greater cost efficiencies while retaining operational control. It deploys its existing infrastructure in providing all back office and support services in achieving the lean offshore processing resulting in less management overhead for the customer. The companys BPO offerings also provide flexibility to respond to changing business needs and industry dynamics, allowing its customers to scale their businesses quickly. A customer can start modestly and scale rapidly given the scale of business need. At the same time, customers are Milind Joshi also seeking solutions offering more Director Production than fixed price and labor rates based traditional outsourcing and The technology empowered, young, off shoring. In short, a new outenergetic production colleagues come-based outsourcing value deliver world-class services that are on proposition. The company thus par with 'aircraft production precision. provides outcomes based outsourcing through its gain-share outsourcing, striving for maximum bust quality and HR practices provalue and share it transparently with vide distinct edge. Xchanging provides finance and accounting its customers. functions to a variety of industries Financial Shared Services Center such as banking, insurance, pharmaceutical, logistics, retail, hospitality Model Xchanging offers services to its cus- and real estate services. One such example is the service tomers in a Financial Shared Services Center (FSSC) model with over Xchanging provides to the worlds 10 service delivery centers across largest property management and U.S., UK, Asia Pacific and Australia real estate service firm with an emcatering to multiple language re- ployee base of 20,000 plus operating quirements FSSC provides a whole gamut of figo to market strategy nance and accounting functions such as procurement services, accounts payable, accounts receivable, fixed assets accounting, Bank & GL reconciliations, budgeting and reporting, statutory & tax reporting, payroll, pension and treasury operations to global clients. Global delivery locations, multiple language competencies, expertise in implementing technology enabling tools, access to global industry best practices, time tested implementation, operations, engagement models, rosiliconindia

from 58 countries. Managing over 55 client legacy systems; data processing, interfacing and consolidation through X-PRO (Xchangings enabling tool - an end to end Procure to Pay solution) proprietary system used for workflow management and interfacing between client legacy systems and GL system. More than 170 employees operating from multiple locations in India process 1.6 million invoices in six different accounting applications. 65000 vendor requests are processed annually in 5 different accounting softwares. 99.5 percent quality output has been maintained for the last three years since 2008. Also worth mentioning is the Process Service Level Agreement with Premium Consulting Services Company in UK with 7,000 professionals in 120 offices throughout the world, rated as top global Human Resources consulting firms with revenues of over $1.2 billion, at 100 percent turn around time and quality. Xchanging successfully handles payroll for 300,000 pensioners every month, eliminating paper work across all the functions. Audit trail automated using X-Pro thereby reducing the auditing efforts tremendously. Directly works with the customers service provider to source inputs for accounts finalization.

Soni along with his team knows that while it is important to have a long term vision while achieving the companys goals, it is equally important to give back to the society where it operates. Hence, Xchanging is quiet actively involved in its CSR initiatives where it adopts nearby schools and villages and help them in raising funds for improving infrastructure. The company recently adopted a primary school in the outskirts of Shimoga, an upcoming town in Karnataka providing computers and helping repair the existing school buildings. This is part of the companys global Charity Program where it also invites its partners and clients to come ahead and contribute to the cause. Currently a three year support program which is helping shape young lives.

Going beyond Corporate Work

strong is Xchangings focus for its people, a congenial work environment, value infused culture, regular management employee interactions, harnessing entrepreneurial spirit in employees, unleashing potential through workshops and trainings, addressing every one by their first name at work and backed by ample support from management in terms of coming up with innovative ideas, explains Soni. This friendly outlook coupled with technical competency is a winning combination, differentiating Xchanging from the others in the industry.

Srikanthan Hosur, Director Quality

Engineering Processes for Efficiency Operating in a mission critical sector like BFSI apart from competency also requires high levels accuracy. But when processing million transactions a day in several centers across multiple countries, it becomes quite a challenge to monitor and track every transaction. Though a margin of one percent may generally be acceptable, when processing claims of worth $80-90 billion, even this error can transcend to a large amount. To avoid this, in 2003 Xchanging developed an efficient metric system that tracks every transaction right down to the computer from which it was processed. This metric system has provided quite an edge to the company when it comes to providing monitoring processes and quickly responding to any customer query. Other than the in-house metric system, the company also conducts frequent internal and external audits to keep a check on quality as well as data security. And whats the focus Xchanging has for its employees? Equally

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From Tier 1 to Tier 3 Cities: Spreading its Presence To achieve consistent and high QualIt is a matter of great feat for ity deliveries, high value productive Xchanging India that a majority environment and customer satisfaction of the companys customers are in our services we use robust quality methodology in all our Processes at those from reference and since Xchanging 2005 there have been no major decline in the clientele. But a common concern for many cus- The Road Ahead tomers is the rising cost of operations Now a decade old in Indian BPO inin major cities where the company dustry, the company has not only fooperates and it is effecting cost in its cused on international markets but SLAs. Thus, in order to ease the op- indentified potential in domestic erational cost pressure on its cus- markets as well. The company is a tomers, Xchanging India has cutting edge solution provider of identified a perfect solution in iden- technology services to BFSI sector tifying Tier 3 cities as centers of op- in India, Bangladesh, Sri Lanka and eration. The company recently set up Bhutan. With its expertise in SWIFT a 1000 seater facility in Shimoga, a payment gateway for banks, small town in the heart of Karnataka. Xchanging provides its services to This center currently handles seven over 160 banks in Indian subconticritical processes and employs local nent. Apart from BFSI new areas talent there by reducing OPEX. In like healthcare, retail and manufacthe similar lines it is indentifying turing also are holding promise. To other cities like Solan in Himachal tap this opportunity the company Pradesh among others. These places Soni has envisioned a three pronged will take anywhere between 10-15 strategy grow the existing platyears to develop into a fully fledged form, add new portfolios (like retail, city like Bangalore and thus help us banking and hedge funds) and conkeep costs in considerable control tinue to implement lean processing. Though the competition continalso providing employment to youth of these cities who would otherwise ues to rise high, for Xchanging this migrate to bigger cities like Banga- is just the beginning for many more lore or Chandigarh for employment, years of successful transformations to come. si explains Soni.
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April 2011

Cover Feature: By Hari Anil

BPO Sector Is Doomsday Near?

oomsday, Armageddon, end of the day, as we all know these words or phrases have negative connotations, and outside religion they can never have any positive aspects associated to them. For that matter, even the slightest doubt that something is heading for any of these cannot be good. According to a NASSCOM report the IT/BPO sector is estimated to aggregate revenues of $88.1 billion in FY2011 of which $12 billion is from the BPO sector. They are also estimating the domestic segment to grow and reach `127 billion by 2011 and are predicting a very bright future for the industry. It seems to be such a great time for the BPO segment, or is it really? There are many developments in the Indian BPO industry that might not have a very positive effect on the industry, which makes it doubtful on the prospects of the industry. To begin with, the STPI Act ending on the 31st of March, MAT to be levied on units operating in SEZ, a lack of availability of skilled labor, an increase in labor cost, and finally other countries like Philippines are gaining more prominence in the market. It is these factors in the segment that makes one wonder Is the future going to be a bright one for Indian BPO sector or is it nearing its doomsday?

giants in the industry very badly it can be a knockout punch for the The Budget Woes For long, IT/ITeS companies had small and medium companies who been under the protective umbrella are still surviving from the recession. of the STPI Act. Launched by the SMBs will get hurt due to the withIndian Government back in 1991, the drawal of tax benefits here. On the STPI Act provides facilities to IT in- other hand several other competing dustry for undertaking software de- countries have these benefits and velopment and IT enabled services naturally business will start moving for 100 percent exports using data towards those countries, says Shancommunication links in the form of mugam Nagarajan, Co-founder & physical exports including export of Chief People Officer, 24/7 Customer. professional services. Individual But being small and medium in size units can also do business in the do- seems to have its own advantages, mestic market up to 50 percent of the The benefits of being small are that exports. With the act expiring on the you can be more nimble and more 31st of March and the government is agile; you can also be more responnot showing any signs of providing sive, faster and better to client need. an extension to this, spells trouble The SMB sector has to learn to exbrewing for the BPO players. Also ploit that more and more, as it looks companies in Special Economic to win larger contracts in the indusZones were safe from MAT till now, try, says Manoj Malhotra, CEO, but the recent budget made it clear Salient Business Solutions. Post recession many of the comthat this will no longer be so. The levying of MAT along with non-ex- panies are looking to outsource tension of STPI Act beyond FY11 everything other than their core will have a major negative impact processes and are no longer just the IT/BPO sector as profit margins looking at the cost advantage or of these companies(especially small labor arbitrage; rather they are lookand medium) who enjoyed tax ex- ing for service providers who are technologically advanced emptions under the above and are capable of promentioned schemes is viding niche end to end expected to come Being small, you solutions. The promidown. can be more nence that Business Though this nimble and agile. Transformation Outmight not affect the sourcing (BTO) gained in the recent times is due to this. BTOs help its clients in more ways than one; they help in cost and labor arbitrage, reduction in time required for product development, helps in reduction of complexity of major projects, and many more. So a migration to BTO models might just help our BPOs. Well, the migration to BTO model might not be an option anymore, The companies have no choice but to deliver more value as customers are expecting more value Manoj Malhotra added to the services being offered,

Pressure from the customers forces companies to move up the value chain and stay competitive

Unskilled Labor, Threat of New Geographies The rising wave of challenges Talented and skilled employees are the main reason behind any companys success. While talent retention has always been a challenge for BPOs, now they are staring down the barrel of a different kind of issue, lack of availability of skilled labor. As per a NASSCOM report, the outsourcing industry is expected to face a shortage of 262,000 professionals by 2012. The direct result of the lack of availability of skilled labor will be the inflation of pay roll cost. The major cost factor for a BPO is its pay roll cost, about 50 70 percent of the total operational cost, when this goes up the profit margin goes down. This will in turn force the BPO companies
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says Rahul Kanodia, Vice Chairman and CEO of Datamatics. This is good as it forces the company to move up the value chain and stay more competitive. The companies can also charge a premium price for these value added services and make profit from it, Kanodia added.

Rahul Kanodia

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to increase their service costs, which will make their customers look for cheaper alternatives. Lack of the availability of skilled labor together with increase in labor cost can be a lethal combination not just for SMBs, but also for the giants of the industry. We need an excellent education system that train individuals for jobs in BPO industry as well. If academia introduces courses in spoken English and business communication at least for the last two years of school or college and make this compulsory, this will help in eradicating the scarcity in talent pool in the industry, says Nagarajan. Philippines have a large English speaking population created through change in their educational structure. So Philippines has two advantages over the Indian BPO sector, cost arbitrage and availability of skilled labor. A report by World Bank highlighted that last year Philippines outstripped India as the worlds call center capital in terms of manpower and growth in BPO receipts and the industry data showed that at the start of 2010, revenue generated by the BPO sector in the Philippines stood at $5.5. This is no longer a negligible threat. As of now Philippines BPOs are concentrating more on the voice processes, mainly of the U.S. clients, and they are not very strong in the non-voice area, whereas India is very strong in the non-voice processes. But one can see that it is only a matter of time before they gain strength in the non-voice areas as well. India has another huge advantage, which is its gigantic domestic market. This market is a huge opportunity for the Indian BPOs to leverage on. This is something the Philippines does not have, says Kanodia, pointing out an advantage India has over Philippines. Indian domestic BPO market is expected to
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We need an education system that trains individuals for jobs in the BPO industry

Shanmugam Nagarajan

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What should we do to survive the Doomsday and stay afloat? It is given that there will be a cost arbitrage. But if you are going to win the contract you cannot rely solely on that, because you can be rest assured that there will be at least four others on the same table with you who would have the same cost arbitrage or even better. So cost arbitrage will remain an important factor, but not the sole defining or decision making criteria, and you have to provide more than that to win a contract or to swing a job in, says Malhotra. So low cost is no longer one of our strengths; we cannot compete with

grow by 16.9 percent in FY2011, to reach Rs 127 billion. This presents an enormous opportunity for the Indian BPO companies. The companies should not shy away from this and should leverage it to the utmost extent. This can enable them to go a long way.

the likes of Philippines in terms of cost arbitrage. We have to look at our strength which is the experience we gained trough working with different companies in the field for several years and start providing more value added services to the clients. Secondly much attention should be given in developing the necessary work force. BPOs have already started working with universities for developing course models that equip the students with necessary skills to be a part of the industry. As Nagarajan mentioned, a focus on spoken English and business communication in the school or university level will go a long way. This will definitely help in increasing the availability of workforce in the industry. Government support plays a huge part. When we were working with China, the government was giving the company that we partnered with, 200,000 squre feet of fully furnished office space, free computers and software, no electricity charges, no water charges, no tax for five years, no employee tax for two years, and subsidized housing for employees. In China the operational cost is about half of that in India, plus all these support from the government, there is no way India can compete, says Kanodia. Governments in countries similar to ours around the world are providing more and more support to the industry understanding the real potential of it. Our Government has to do the same for the uninterrupted growth of Indian BPO industry. As a whole, with all the dark clouds of the immediate threats for the BPO industry, it definitely looks like the doomsday is near. Still one can slightly see a ray of hope emerging from all dark clouds, which suggests that this need not be the end. But the industry has to act now and act fast if it wants to escape and survive. si

uperstition, despite our age of science and technology, plays a prevalent role in our day to day life, and it can be seen everywhere from the big time to the backyard. It is a belief founded by someone, no matter how evident, it is irrational, and always relies on chance. No matter what meaning superstition may bring to people in general, to the players in the cricket field as in the world-cup this time, it is a sense of duty, a feeling of comfort they receive from a certain superstition. The propitiation of the right gods, ritual dances before the hunt, can all be viewed as efforts, no matter how faint or unavailing, to control destiny. Likewise Business Plan/Risks plays an important role on how you would like to control the destiny of your business or organization by not sitting on the lap of superstitious, but a firm Business plan. Be it from initiation of a new Line of Business (LOB) or expanding business in new regions or bringing innovations to existing customer and so on. Almost a decade ago, questions were, What business do I take to my customer, How do I do it and Who does what? Since the economic down-fall in mid 2007, the IT world today is calling this the year of operational excellence. How do we harness the creativity and brainpower of our entire unit to fine tune all facets of the sales machine? Are we focused in the right places? Are we putting our wood behind the right arrows? The goal in all of this, by the way, is to work smarter and not harder. In the managed services world it is about everything, We will do all for a price! While we do it all, we will also

The author is Global Head-IMS, Infinite Computer Solutions (Inidia)

Business: By Aparna Challu

Making Business Impact Via Managed Services

work towards enabling growth to our customers, helping our customers to improve efficiency and margins and helping them to reduce costs. Now what drives the managed services to end customers? Why would any customer adopt Managed Services? Is it cost, efficiency or is it business impact! If I had to pick, I would say business impact. In the recent survey, most IT units spend as much as 80 percent of their budgets on routine maintenance and day-to-day operations, while only 20 percent is spending on new technology or business-process enhancements. Now the conventional wisdom is, with the total IT budget being constant, it is better to spend more on new initiatives and minimize spending on legacy systems. Most of you would probably argue that the distinction between maintenance costs and new initiatives should be guided by the business needs, within an IT services lifecycle framework through reversal of the standard 80/20 rule and to a considerable improvement over the way IT functions. I wont deny that either! Now how do we make a business impact by providing managed services to any customer? As per Forrester research group half of the IT operating and capital budget is being set aside for new IT initiatives and increasing capacity to support business expansion, which means that more dollars are going to be

allocated to services-based transactions. Budgeting, planning, execution, lead flow and more, these are some of the important aspects that can set an example for the roadmap from a basic environment to service based which is a more holistically managed services. If I have to quote an example, there are customers who have highly centralized operations vis-a-vis customers that have a server in every office, under every desk in a cubicle. According to Gartner, information and communication technology (ICT) spend is expected to reach $71.9 billion in 2011, a 10.3 percent increase from 2010 spending of $65.23 billion. We could possibly use the important aspects to make a business impact and thus making it a business enabler that is more matured with flexibility to adopt new change, with standardized SLA and matured problem management and consolidated environment. Today various customers of Infinite across the globe use our model where measurement can be done with huge reduction in operations and maintenance cost with ability to integrate and maintain inter-operability, providing maximum business realization and show IT return on investment. We at Infinite offer Infrastructure Managed Services Maturity model through people, Process and Technology which form the core structure in any business initiatives. si
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The author is Vice Chairman and CEO, Datamatics Global Services

Business: By Rahul Kanodia

The Indian enterprise market has matured enough for Indian BPO providers to start targeting the domestic market. What factors will drive this growing trend? Kitna deti hai?(whats the mileage?) the ubiquitous phrase aptly captured in a TV commercial for Indias best-selling cars was so true for Indian enterprises looking to buy IT or business process outsourcing (BPO) services. Considering recent trends, this psyche is changing, and Indian user enterprises are finally waking up to the tremendous advantages that BPO solutions bring to the strategic and operational aspects of their businesses. Benefits like 75 percent reduction in operational costs, a 50 percent reduction in turn-around time, optimizing cash flows, accelerating revenue cycles and improving your understanding of the customers cannot stay ignored for long. In the light of these tangible and immediate benefits, BPO services and solutions are no longer an option that enterprises can leverage to stay competitive. Rather, they are strategic imperatives in the hands of the enterprises leadership, business groups and business support functions. It is a sign of increasing maturity. So far, the Indian IT and BPO industry has been growing on the back of a cost advantage as compared to local resources available in developed economies. This advantage did not exist for local enterprises. A cost-conscious user community would have missed out on an opportunity to create a lean, highly profitable organization that is quick to respond to customer needs and preferences, and comply with regulations.
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BPO Services & Solutions Be Indian, Buy Indian

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There has been a paradigm shift though, with the recent economic downturn acting as a catalyst. With competition from larger, cash-rich corporates increasing, Indian enterprises too have begun implementing global best practices, building highly efficient and scalable business processes, increasing customer responsiveness and hastening time-to-market for a wider range of solutions and services. Cost is no longer the only, or even the most influential factor in an Indian enterprises decision to purchase an IT / BPO solution. Business process transformation and product innovation are turning out to be the topmost drivers of the local consumption of BPO services and solutions. Key drivers for growth in BPO service adoption in the coming years will be the need for greater control and real-time monitoring of enterprise assets, better analytics and intelligence for effective business decisions, customer-centricity, seamless integration of assets and systems gained through M&As, future proofing of business processes and lower operational costs. New buyers have emerged as they finally start seeing value in enhancing business processes through technology. Sectors like manufacturing, media & publishing, education, banking, insurance, utilities, retail, telecom and government have begun to increase their spends on technology and BPO solutions, and will continue to do so in the coming years.

All indicators point to the fact that the user community is building a layer of next-generation business solutions over the initial layers made of infrastructure, automation and core business components. More than ever before, the CIO conversations are beginning to revolve around how they can help their organizations become good corporate citizens and how they can enable compliance and risk management. The focus now is on how to use technologies, processes and frameworks to enable best practices and industry leadership. With the spate of frauds, stricter regulations and closer scrutiny by a vigilant investor community, the companies boards are holding CIOs responsible for building investorfriendly, corporate governance-compliant processes.

India: Opportunity for Indian BPO Providers Here lies the opportunity for the BPO sector in India, a potential $15-20 billion opportunity, according to the Nasscom-Everest India BPO Study. A recent Gartner study also picks out India (along with China and Australia) as key regional economies that will see most growth. The Nasscom-Everest India BPO study says that reliance on a cost-savingsdriven value proposition alone will not be in the best long-term interest of the Indian BPO industry. The reason being the continued appreciation of the Indian Rupee against the U.S. dollar, inflationary pressures and resource scarcity. The report further states that BPO providers need to innovate and build new, higher-value

propositions for buyers or seek to optimize the current environment to continue the cost-arbitrage-led proposition. Clearly, addressing the business challenges of enterprise users in India through innovative solutions combines the two approaches. Therefore, the future is bright for providers of technology and business solutions, with a focus on designing, developing and implementing building blocks of next-generation enterprises. The user community is bound to lap up solutions that power the enterprises focus on its core, while strengthening performance at the non-core edge of the ecosystem. These solutions combine the next-generation technologies and domain expertise. They would help enterprises overcome challenges that arise from changing customer mandates, new regulations, mergers & acquisitions, technology obsolescence and the emergence of new technologies like cloud computing and mobile devices. One such solution could be the paperto-ERP solution, which streamlines the entire lifecycle of document processing in any enterprise. This business need is driven by a suite of solutions that meets requirements of tax processing, KYC processing, invoice processing, insurance claims processing, account opening form processing for banks, application and examination sheet processing for educational institutions, etc. These are solutions that cut across the various departmental silos that exist in a user enterprise, and fuse business processes and technology. Another solution that considers the vast and diverse Indian demography is a mobile survey solution that meets the need of research firms to conduct surveys on mobile devices. A mobile survey solution can help the researcher, and government agencies for projects like the census survey and reach out to respondents in remote locations with limited access to computers and the Internet. Such a solution provides real-time reports, survey templates, simultaneous data collection, analytics, multiuser collaboration and offline data collection on simplified user interfaces. This is a major leap ahead in survey re-

search projects, and if they manage to meet the complex needs of survey research projects will turn into a killer app. This is an example of business process solutions that deliver business-critical information realtime in non-traditional formats for nextgeneration applications. A key technology trend that will provide a major impetus for the BPO services in India is the emergence of cloud computing. This has enabled a new delivery model that helps convert CAPEX into OPEX. It is non-disruptive and offers advantages of economies of scale, which is a win-win for both, the BPO service provider as well as the enterprise user. From a CFOs perspective, an invoice processing solution on the cloud for instance, will help reduce accounts payables, accounts receivables and Days Sales Outstanding rates, optimize cash flow and lead to more effective management of working capital, lower order-to-cash (OTC) processing time and costs, and roll capital efficiently, among other benefits. Finally, there is one key component of a BPO solution or service that will define its success and popularity in the Indian market. It is the ability of the solution to simplify complex business processes. Indian BPO providers have a clear advantage in this regard. Apart from technology expertise, what will stand in good stead for Indian BPOs is their understanding of the local environment, their experience in integrating and customizing technology, knowledge of the complex tax and accounting practices, and the invaluable advantage of being based here. The reason Maruti continues to produce the largest-selling cars here in spite of competition and higher costs is not just because it has an answer to kitna deti hai? but also because of its endearing Indianness. The government must now pitch in and incentivize local businesses that buy and implement solutions from Indian BPO providers. That will spur the next big wave in the Indian IT and BPO industry. si
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April 2011

The author is President - Asia Pacific, Aditya Birla Minacs

Business: By Milind Godbole

Connect India
he Indian telecom industry, especially the mobile, is one of the fastest growing across the globe, with growth from a one million subscriber base in 1998 to 400 million plus in 2009! This unprecedented growth has been witnessed with ever changing market dynamics. This unprecedented growth has been with ever changing market dynamics. Consider the following key challenges in the industry: The next 100 million subscribers will come from tier 2/3/4 towns and rural India. Average Revenue Per User (ARPU) is already low, will come down further. The cost of servicing has to decline further too. Thus more pressure on the cost of service in tier 1 and 2 cities.
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A robust customer service platform to power the next phase of Indian telecom growth

Service Delivery Model: Connect India is designed as a hub-and-spoke based service delivery model, the typical hub is a state of the art facility with 800 plus production seats located out of a major metro to cater to the urban mass with high Revenue Per User (RPU).

The conventional customer service set-up today just cannot scale up to meet the requirements as growth goes decidedly semi-rural/ rural
The conventional customer service set-up today just cannot scale up to meet the requirements as growth goes decidedly semi-rural/ rural. This is why: Available spend budgets dropping consistently The cost of servicing from tier 1 and 2 cities exclusively is becoming more prohibitive year on year with the consistent drop in ARPU. Accent diversity management: the market shifting towards tier 2, 3 and 4 towns is inducing accent and dialect related difficulties in customer service! Disaster Recovery (DR)/ Business Continuity Planning (BCP) A pure-play metro or a purely rural delivery model hinging on one or two centers brings with it serious DR, BCP challenges.

Hub: Command Center: The hub is the command center supporting all spokes, and will also cater to 20-25 percent of the volumes. The remaining is smartly distributed to the spokes to ensure buffer rationalization. All critical delivery activities like Train the Trainer (TTT), Quality Monitoring, MIS, reviews and overall control will be located at the hub.

Strategy: Our location strategy is based on our research, on infrastructure availability (fiber, last

Ready to Implement: Minacs has done extensive research across Indian states and is fully ready with a detailed template and plans to implement and transition the operation quickly.

The Approach Aditya Birla Minacs has pioneered an innovative proactive response to this evolving business scenario. Based on our deep engagement with the telecom industry, the CRM insight and domestic experience we have created a solution which is Connect India - a robust customer service platform leveraging technology that will power Indian telecoms growth thrust in the coming years.

Spokes: Satellite Center The spokes or the satellite centre is a highly functional, but minimal infrastructure 100seat (approx.) operation, running a strictly two-shift operation, located at a 3-4 hour distance from the hub. More than a Call Center: A typical spoke facility is envisioned to transform into a contact center. But going further with the infrastructure, each spoke will house a full fledged retail center to enable the company to offer sales and other retail, showroom-centric activities.

Many social media efforts are failing, because some enterprises just don't understand how to employ social media to facilitate collective behaviors, says Gartner. The research indicates that pursuing collective intelligence to achieve operational effectiveness is one of the most successful social media adoption trends. Furthermore, collective intelligence is one of the earliest and most mature patterns, meaning that skills and tool capabilities are relatively widespread, and success in this pattern is proven.

Go-live: The hub will go operational first (within 60-90 days of LOI) with one spoke going live every 30 days thereafter. The Connect India model from Minacs is based on control panel framework, which is customizable for meeting specific telecom requirements. This framework comprises of critical delivery elements which are well researched and measurable under our Six Sigma approach. Minacs approach to deploying the Connect India model follows a well-knit flow integrating people, process and technology. Critical functions like hiring, training, quality, transition, on the job training (OJT), floor operations are customized to suit to suit the business needs of the customer. Each of these critical success factors are well thought-through with the help of our proprietary framework to factor in location based challenges. We come up with a best-fit solution for you, leveraging the optimal hub and spoke locations, based on the client requirements. In a nutshell, Connect India from Minacs ensures no major capex investment to the clients and a robust built-in DR and BCP framework. It is a blend of service functions to drive customer satisfaction across your metro and rural subscriber bases. The evolved pricing model featuring highly competitive per call pricing and our commitment to move to an effort plus output model in a pre-defined period is one of the key highlights. As part of the inclusive national and increasingly corporate agenda, together we would like to contribute to creating employment across semi-rural and rural India. si
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mile, etc), political sensitivities, resource catchment areas and other such feasibility parameters.

April 2011

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April 2011

Technology: By Murthy Chintalapati

Cloud Telephony is the New Tool Enabling Crowd Sourcing of Call Centers

I
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n the age of LinkedIn, Facebook, Twitter and other social networking tools, it has become increasingly important to provide the best customer service available. Businesses are seeking ways to streamline customer support and reduce costs. Indian companies are in this context quickly adapting to Crowd sourcing of contact centers, thus enabling them reduce response time to customers. The trend of businesses employing more home based employees, using different methods of social networking to generate higher revenues are increasing in India today, more than ever before. Contact centers are faced with increasing pressure to upgrade their technology both hardware and software to equip themselves for crowd sourcing. Business heads and CTOs

need to realize that their contact center technology infrastructure must be nimble enough to respond to future trends and one of the biggest emerging weapons enabling crowd sourcing of call centers in India is customized Cloud Telephony solutions.

A hosted telephony network provide businesses the ability to operate with multiple telephone numbers and forward them to as many multiple locations as they wish or to a single telephone line.

sales presence across regions of the country whether it is Mumbai, Delhi or Bangalore as well as a national toll free for easy rental. It will also help businesses set up rural BPOs in smaller Tier II & III cities and towns; an important requirement to make domestic call cen-

A hosted telephony network provide businesses the ability to operate with multiple telephone numbers and forward them to as many multiple locations as they wish or to a single telephone line. So, a single line operated from anywhere, looks like it has local

ters a viable business opportunity. Companies have been unable to scale their domestic call centers due to lack of good broadband and internet services in smaller towns. Cloud Telephony is almost a necessity to develop Indias potential domestic call center market.

Ozonetels Cloud Agent solution brings the advantages of the distributed contact center to help businesses achieve more results out of less. Cloud Agent is an innovative approach towards providing professional UCI (unified customer interaction) services built on a Telcos PSTN/wireless Cloud. It offers required inbound, outbound and blended services including Skills based routing of the calls, Computer Telephony Integration with screen POP, IVR, Call Recording, Quality Monitoring, Call and Agent Reporting- both real time and historic, SMS, email, all on a hosted basis. It can be deployed as an anytime anywhere agent for your call center requirements, whether it is inbound or outbound. Cloud Agent is a Plug & Play solution with carrier grade voice quality thus overcoming the limitations associated with VOIP based Call center solutions. The Platform enables crowd sourcing wherein pre-qualified agents receive and process calls in the cloud resulting in significant cost savings by paying only on transaction basis as opposed to agent wise which is the norm.

A cloud telephony platform such as this also makes it possible for businesses to mobilize their contact centers and call agents and makes it possible for mobile workers to be maximally efficient, reachable and effective in their jobs. The contact center is no longer constrained to a single geographic site, with agents being able to work at multiple sites or even from home. Companies will be able to track down and engage the specialist that can best meet their customers requirements, drawing on a geographically distributed pool of specialists. Cloud Agent gives you plug & play solution that will help you eliminate inefficiencies and make your company more productive. Imagine that you dont have to implement unnecessary hardware, software, and you also dont need the manpower to monitor them while you

A cloud telephony platform such as this also makes it possible for businesses to mobilize their contact centers and call agents and makes it possible for mobile workers to be maximally efficient, reachable and effective in their jobs.

still have a customer service that exceeds the required service levels. Cloud Agents makes this a reality by providing an expendable and flexible pay-asyou-go cloud based call-center operation service that will result in significant cost savings. Cloud Agent is a one stop shop so you do not need to make a large upfront investment on call-center resources; the space needed to house them; the hardware, software, and electricity needed to run the computing resources; and the cost of maintaining staff for administering the system, network, and database.

Putting the final touches on a year of worldwide server market growth, fourth quarter 2010 worldwide server shipments grew 6.5 percent year on year, while revenue climbed 16.4 percent, according to Gartner. From a geographic perspective, all regions, with the exception of Japan, grew in revenue with the three highest growth rates shown by North America (24.5 percent), Asia/Pacific (22.4 percent) and Latin America (12.3 percent).

Why is this a big deal? Even the most basic regional number capability was previously limited to actual number rental and call forwarding from virtual office businesses at many times the price of the network telephony services. With a hosted telephony platform such as Cloud Agent, there is no limit to the number of call management and routing options. The sky, your creativity and your business needs are the limit. The Cloud Agent solution is a state of the art implementation of the 21st centurys call centre, based on the cloud computing model, that enables companies reduce capital expenditure (or outsourcing cost) by eliminating physical brick and mortar workplaces from the customer contact process, tap into a nearly unlimited talent pool by eliminating the geographical restrictions on agent recruitment and introduce efficiencies unmatched by its competitors. si
About author
Murthy Chintalapati, Founder & CEO, Ozonetel Systems

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April 2011

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April 2011

The author is Vice President - Service Delivery, Coupa Software

Technology: By Ravi Thakur

wo significant things have been happening over the past few years that have fundamentally changed how organizations operate. The Great Recession and the emergence of Cloud based solutions. The Great Recession taught organizations to look at their overall business and really tighten their belts wherever they can, to ensure that every dollar is being used wisely. Part of that ties in perfectly with how Cloud technology allows organizations to quickly deploy solutions to immediately tackle pain points such as: marketing automation, spend management, and human capital management. The emergence of cloud providers during a recession is a true testament to the value that cloud solutions offer organizations of all sizes. This article helps articulate how cloud solutions help organizations Spend Smarter and Save Money. Over the past few years, as organizations try to protect margins, they would slash employee expenses, i.e.: payroll, travel, bonuses, etc. But, there is only so much you can cut from your employee base, organizations had to take a hard look at where else they could cut costs. So what did companies do? They decided that they needed to spend smarter and save money. For most organizations,
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Will Cloud Help You to Spend Smarter and Save Money?

spending money is not a problem and it really boils down into two different areas: purchasing and travel & expense spend. The challenge is ensuring that all their employees are using pre-negotiated pricing for goods and services and also being frugal when it comes to spending the companies money. Its easy to negotiate a price discount with a supplier; the hard part is ensuring that your employees are actually buying goods and services against that pricing. Its easy to tell an employee to take a shuttle instead of taxi; the hard part is enforcing it. This is where Cloud solutions can help. The Cloud is a way for technology companies to deliver best in class, highly innovative solutions to customers without having to deal with the heavy infrastructure costs that traditional SaaS or on-premise technology companies have traditionally dealt with. Here at Coupa, we have been able to deploy thousands of users from hundreds of organizations at a fraction of the cost of what we would have had to have done even five years ago. This translates to solutions that deliver more value at lower costs than ever seen before in the enterprise space to organizations of all sizes. Its really the democrization of value-add enterprise solutions to organizations of all sizes. The Great Recession hastened how quickly Cloud solutions have been adopted into the enterprise. Organizations will no longer pay, nor afford, multi-million dollar enterprise software implementations those days are over! Fortune 100 companies to small startups, now want to invest in solutions that deliver quick value, high ROI, and low TCOs. The emergence of these two changes in the world of business has created a new space: Cloud Spend Management! Though companies have achieved tangible results from automating their physical supply chain processes, organizations financial operations rarely realize comparable benefits from such investments. This is particularly true of purchasing and spend management processes. Organizations, today in 2011, still have manual, non-integrated and very inefficient processes for helping employees buy what they need to do their job at prenegotiated prices by the company. Imagine, how much more efficient your organization would be if your employees could create purchase orders and expense reports with as little training as it requires to use Amazon.com or Facebook? Thats where you have an explosive marriage of

Spend Management and the Cloud! Exactly what organizations are looking for as we are coming out of the Great Recession the ability to reduce costs and reap savings upwards of 10 percent of total spend. Its a lot harder to grow revenue by $1 then it is to reduce costs by $1, given the cost of sales, development etc., to even generate $1 in revenue. This is where the Cloud and solutions can change the game for you. With easy to use interfaces, deployments measured in weeks, and TCOs that are multiples less than traditional on-premise, ASP solution there is no limit to the impact you can make on your companys financial performance with spend management in the Cloud. Cloud Spend Management solutions are developed from a single code line and built atop a multi-tenant architecture, offering significant benefits over premisebased and hosted solutions. These advantages include: Rapid Innovations: Upgrading licensed solutions can be a hassle when you account for the IT and business resources that need to be involved and the system downtime. Also with in-house, installed solutions new solution functionality is only available when and if a company decides to go through the upgrade process. On the other hand, cloud-based solutions deliver rapid innovations multiple times a year, all involving minimal, if any, effort on the client side. This means that organizations can immediately benefit from new features and functionality introduced by the solution provider. Ease of Use: For consumers, the Internet has changed the way users search for and buy products/services online think Amazon, Facebook, Google or iTunes.

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For businesses, though, the tools and software they use to manage and control spending is overly complicated and difficult to use. Cloud spend management is revolutionizing the way businesses look at their procurement and expense management processes by delivering an intuitive and dynamic solution interface that is as easy to use as Google or Amazon, without sacrificing the robust functionality businesses expect to effectively control spending. Ease of use translates to increased user adoption, which drives greater compliance and greatly reduces maverick spending that cannot be tracked. Data Aggregation: One of the common shortcomings of onpremise and hosted software is that they focus exclusively on spend occurring within the company firewall, depriving clients a particularly valuable information asset their performance benchmarked against the larger customer community or market. By contrast, cloud-based solutions built upon a multi-tenant architecture can aggregate and analyze all data flowing through the system across customer instances. This enables client organizations to benchmark their individual spend metrics and performance against the market for a wide range of operational key performance indicators (KPIs), giving potential insights on how and where to optimize and improve their spend management practices. System Integration: Long lead times, high costs, complex planning sessions and deployment delays these are the factors, inherent to licensed solutions, that usually make organizations balk at the thought of implementing any technology solution and

integrating it to other systems. Cloud-based solutions enable companies overcome these challenges by providing business administrators and IT personnel with easy-to-use and cost-effective tools for system integration. With cloud spend management solutions, organizations can quickly and easily automate the entire procure-to-pay process by integrating directly with their ERP or accounts payable systems to easily match invoices to POs, confirm item receipt and provide timely payment to suppliers. Rapid Payback: Cloud solutions, which typically operate on a subscription or pay-per-use model, are drastically reducing the total cost of ownership of any automation initiative. Traditional licensed software solutions involve heavy, upfront capital investments in hardware and software. Further, these solutions are also more expensive and time-consuming to maintain and upgrade. With cloud-based systems, most of this expense goes away. Clients typically either pay an annual subscription for the service, or pay based on the volume of transactions they process through the solution, resulting in a rapid return on investment (ROI). Ultimately what the Great Recession has taught us is to reduce our risk tolerance, look for the safer bets and quicker ROIs. Its not a world where organizations are forced into large software deployments and have to take on all the risk. With most Cloud services, if you are not satisfied with the service, cancel and only pay for that subscription period. The ability to deploy quickly and easily and to scale as business needs dictate is how organizations are better geared to serve their employees and customers in this new world. si
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April 2011

Business: By Suresh Yannamani

usiness Process Outsourcing, whether viewed through the eyes of the vendor/provider or the corporate business owner, has historically been viewed myopically as a means for corporate entities to strip out cost and increase profitability through labor arbitrage as it applies to siloed business functions such as IT or finance and accounting. This business model led to the rapid expansion of specialized service providers and function specific, corporate captive centers. While these models have proven to be fundamentally and fiscally sound throughout the past two decades, the role of the discrete service provider is coming to an end. The end will be ushered in by traditional market drivers such as increased competition and emerging technology, but more importantly, the fate of individual IT-BPO service providers will be determined by the overall scope and value of the services provided across the clients enterprise.
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The Changing Face of

Indian BPO Industry

Those who fail to adapt to customer demand will see their market share evaporate or find themselves the target of acquisition. The focus for the future must be the customer. When addressing the future it is paramount to note that the market landscape is still bright. As per NASSCOM the Indian IT-BPO sector is estimated to grow over 19 percent in the FY 2011. Its total revenue of Indian IT-BPO is estimated to be $88.1 billion in FY 2011 of which 19 percent would be coming from BPO. Of the total revenue 33 percent would be generated from domestic and 67 percent would export revenue. Direct employment would grow by 10 percent reaching 2.5 million and over 2.4 lakhs jobs will be added in FY 2011. Total employment in FY 2011 is estimated to be 10.8 million. The future of Indian IT-BPO industry looks promising for both domestic and export revenue. The size of global sourcing market has grown from $37 million in FY 2005 to $106 million in FY 2010. Indias share in global market is 55 percent in FY 2010 compare to 49 percent in FY 2005. Of this the Indias market share from BPO market is 34 percent in FY 2010 compare to 45 percent in FY 2005. Revenue from global BPO exports has increased from $12 million in FY 2005 to $42 million in FY 2010. While financial statistics and generous forecasts are encouraging, the IT-BPO market is not immune to the boom and bust cycles that have affected mature global industries such as construction, manufacturing and retail. Although IT and BPO service providers have traditionally benefited from such market cycles, acting as a stabilizing agent for their clients, it is imperative to remain vigilant and understand that continued market share is not a given for Indian BPO and ITO organizations. To rest on past success by assuming that current competitive advantages such as cost, education levels and management expertise, will not erode can be fiscally fatal. Pres-

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sure from other BRICs members will continually increase and the impact of their continued assertiveness is difficult to predict. Competition from outside Indias borders is a given and well covered by the business media. In of itself, competition is not the chief threat to our outsourcing leadership position; it is merely a contributing and ever present factor. Market share will continually remain in flux based on price pressures, regulatory shifts and trends largely out of our control. Business plans account for such variability and allow nimble service providers to react accordingly. However, as alluded to before, the chief threat is the infiltration of an overconfident and relaxed perception that the provision of largely commoditized services can be maintained. Relevancy will be determined by customer value and not solely on line of business expertise. During offshorings emergence in the 1990s, labor arbitrage and technical proficiency drove customer demand, but what made outsourcing sticky was the notion that the customer was king. BPO and ITO businesses were built on relationship nurturing allowing service providers to intertwine their solution sets seamlessly within the customer environment. As new service providers enter the market and strive for differentiation, they are more likely to build business models around buzzwords or trendy marketing practices at the cost of sacrificing customer centric service delivery. For example, the industry is well aware that cloud computing and data virtualization has the power to transform not only the ITO industry but the BPO and KPO markets as well. This being understood, a provider should question whether the short term gain of adopting such a practice, measured in terms of acquiring new prospective customers, solely on the basis of new product positioning is worth a shift in resources from current customers and

core service offerings. Are you simply chasing a fad and repackaging existing ASP based solutions as cloud applications for the sake of capturing buzz? Is this what the customer truly needs? As with all emerging technology, it is important to provide a sound evaluation and incorporate relevant aspects into a solution delivery model, but the key is still value. For the client, realizing a significant ROI from current solution engagements is paramount to the formulation of future business cases for additional services. While new products and ideas are intriguing, such initiatives more than likely fall out of scope within the framework of current outsourcing strategies. A customer may become infatuated with the notion of cloud computing as they become more inundated by the concept within the media and their professional circles. The reality is that such a solution requires resource intensive integration and administration within their existing infrastructure. A service provider must listen in order to differentiate between what the customer is asking for and what the customer needs. In this instance, an end-user is looking for the provider to help them navigate these new waters and integrate them into their current processes when it makes good business sense. By maintaining an open dialogue at all times with the client and focusing on the overall value of the partnership, a service provider is likely to avoid such pitfalls and find themselves rewarded with new business from satisfied, current customers. While investment in new products and markets cannot be shelved, a move that would ultimately sacrifice future market relevance, the core attribute of our success must remain a vigorous investment in the customer relationship. Otherwise, without a keen understanding of each and every customers unique business needs, innovation and product development is

rendered meaningless. To quote a colleague, N.R. Narayana Murthy, chairman of Infosys, Unless our researchers realize what the outside world is and what is happening in the trenches, their innovations will have no value for the customer. A recent article published in a daily newspaper with supporting data from the Indian arms of Everest Research and Gartner, highlighted how customers are increasingly looking to renegotiate current vendor contracts to derive additional value from current agreements. The author draws attention to one key aspect of the on-going renegotiations, changing the way services are billed. Instead of pricing services based on FTE count, customers are looking for KPI or SLA based price models. They are looking for more concrete ways to define the success of an outsourcing agreement and making payment contingent upon proof of such. This model will require the service provider to not only be more innovative in the way they build and deliver services, but in how they report the achievement of critical success factors. Those who understand these concepts will succeed. They will understand their customers internal corporate culture and will be able to deliver value across the enterprise. End-to-end solution providers will continue to displace specialized, commodity driver vendors as they are better equipped to leverage their service offerings and expertise to meet the strategic business goals of customers. To survive, IT-BPO providers must divert more resources to the customer relationship and their overall experience. Complacency in regards to customer value will be fatal to those who fall behind. si
About author
Suresh Yannamani- President HOV Services

April 2011

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April 2011

The author is Founder & CEO, Synerzip

Business: By Hemant Elhence

Entrepreneurial Lessons for Software Startups

You cant make a start-up happen by working at it parttime. Most entrepreneurs try to start their venture in a lower-risk manner by keeping their day job, or doing some consulting work on the side (which pays the bills), while they are building their new venture on the side. This usually doesnt work. When the venture needs it most, your focus and your energy get divided. The real action and progress in building a start-up happens when you make that yet another cold call, looking for your first customer, on that dull Friday afternoon, when otherwise you would have been working on your day-job or your bills-paying-consulting-gig. Dont confuse product based and service based business models. A product based business requires upfront investment in building the product and building a sales & marketing organization that can sell that product. On the other hand, a service based
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Your superb start-up idea, or your IP, is not enough. The real crux of building a business is just that - building the business. In building a successful business, relentless execution is far more important than a great idea or superior intellectual property. Many people dream of great ideas all the time, few really do anything with their idea. Chances are many people have already had the great idea, perhaps an even greater idea than yours. While protectable intellectual property (IP) is helpful, it is neither a necessary nor a sufficient condition for creating successful and valuable business. So dont get obsessed with your idea or your IP itself, rather focus on starting and building the business.

ere are the top eight lessons that I feel all entrepreneurs, especially in the technology space, should heed. These are particularly applicable to software, specifically B2B software, and the service space.

business requires selling and delivering core capabilities. The two require very different business models. Often you can start with a services business model (offering consulting services to your target market) and then over time, productize your offerings to build a software product. This evolution works quite well and there are plenty of successful software product companies who can trace their start-up roots back to a services business model. But the important thing is to build the product in roughly the same market space or domain in which you are delivering your services. What doesnt work is when you start out as a services company and then try to add software products that are in a completely different market segment. Remember, nothing happens, until sales happen. While you can get lucky and land one (the first) customer or even a few customers without following a real

sales process, you really cant build a business without a systematic approach to selling. While selling is not rocket science, most of us need to learn how to sell. Although effective sales techniques may differ from business to business, what is common across the board is that a sales process needs to be highly organized and metrics driven. Dont go for indirect sales channels too early in your cycle. In any startup, the most effective sales people are the founding partners (regardless of their official title), because they have the conviction and the passion for what they are offering. Early in the life of a start-up, using indirect sales channels are not only almost impossible, but also detrimental. It is the direct contact with real customers that provides real market feedback to the founders to help evolve the business idea so it can be successful. Using indirect channels too early chokes off that market feedback for the founders. Indirect sales channels and partnerships are much more effective later in the life of a startup, when they have established their product/service, have successful track record of a number of happy customers, and hopefully they have built a (brand) name recognition for themselves. At that stage an indirect sales channel can be used. Co-founder partnership based on trust, fairness, professionalism, and above all, (financial) transparency. Building a technology business as a sole founder is usually difficult. There are too many different skills required that are unlikely to be found in one founder. So it is natural to have two or three co-founders, with complementary skills, who get together to form the company. While skills of each co-founder are important to keep in mind when forming the partnership, what is far more important is that you are on the same page with your shared vision and values. Enter into the partnership with mutual trust, profession-

alism, and complete transparency. To avoid future heartburn and misunderstanding, it is a good hygiene to put your partnership understanding in writing.

The earlier approaches of building software were borrowed from engineering discipines like manufacturing. While these development approaches seems logical they were deeply flawed for software development

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As far as possible, avoid external capital. Some startup business ideas are such that you have to raise capital to get off the ground, but many are not. If you can avoid raising money, do so. As soon as you take someone elses (friend, family, angel, or VC) money, you now need to live up to a higher standard of fiduciary responsibility and performance. It is natural that the investor will need some visibility and want to have a say in how the decisions are being made. This can be quite distracting and constraining to a startup. If you can, strive to fund your company with revenues. You will spend more time looking for paying customers and less time creating PowerPoint decks and business plans for potential investors. In the early stages, talking to customers is a much better use of your time, since each meeting provides real market input. Landing a paying customer is a great validation of your business idea and vice-versa. Furthermore, a tight cash situation brings in great financial discipline to

Build software using Agile approach. In the last two decades or so, the software development industry has really matured a lot. The earlier approaches to building software were borrowed from other engineering disciplines like manufacturing, building and construction. While these development approaches seemed logical first gathering complete user requirements, then going through a thoughtful design phase, then building software, then testing it, and then handing it over to the customer they were deeply flawed for software development. Over the last decade, the industry has uncovered a much more appropriate way to build high quality software utilizing the Agile method. This method is more likely to meet customer needs. With this software development approach, the user requirements actually evolve and in response the technology and design also evolve. Agile is where you deliver working software in short cycles of 2-3 weeks each, with frequent testing and feedback from the customer. si
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Branding 101 make your name easy to be remembered and found. Pick a one-word name for your company and put all marketing focus on building that brand name. Avoid situations, for example: the companys actual name is Exigent Global Systems Inc, but it is sometimes known by Exigent, sometimes by EGSI, sometime by Exigent Global, and their website is www.exigent-global-inc.com. Strive to come up with a name that is indicative of your business and also ensure that the exact same URL is available to you for your company website.

the start-up, helping achieve operating profitability for the start-up. Of course, when you dont take external capital, you also dont end up diluting your own ownership stake in your venture.

April 2011

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April 2011

The author is Co-Founder & CEO, Neev Information Technologies

Technology: By Saurabh Chandra

Companies are Still not Extracting the True Promise of Cloud

Cloud computing Cloud computing will become as ubiquitous in next decade as renting a server or a space on a rack became in the last decade. Perhaps even more as private clouds start gaining acceptance and Cloud computing will not simply remain something out there but inside the company offices. Although large companies will be early adopters, even midsized companies will soon be using mature open source solutions like Eucalyptus very soon for creating private clouds. Elastic Compute Cloud or EC2. Thus the name Cloud stuck.

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From high profile columnists to Innovations in business siliconindia gives you relevant information that truly matters to you. It also presents bold, forthright and objective views of the trends in the Indian industry. We bring you information, ideas and insights to help you pe. navigate through today's changing business landscape.

Cloud Computing and the benefits of having a Elastic approach to it.

perience the full savings that the elastic platform promises. The graph in the article shows what is the potential of using the computing power and storage truly like an utility e.g. electricity.

Elastic Approach The cloud fundamentally allows an elastic utilization with the underlying platform supporting hourly pricing. However, even with the hourly pricing schemes most companies are still not using the elasticity of the platform to the extent that say electricity consumption is elastic where Air Conditioning maybe switched on during day and only fans maybe good enough at night. Say, you have an India specific news portal that you host in the SinHow we came to where we are? gapore center of Amazon (lowest laAs most of us know, Cloud Comput- tency from India). Typical traffic ing is the same promise that buzz patterns show that news portal traffic words of yesteryears called Utility peaks between 4pm to 6pm when emComputing and Grid Computing ployees in office want a break from wanted to provide. The names them- work and check news. Ideally we selves clearly market the value: would like server capacity to be maxcomputing on tap like the other util- imum between these 2 hours, medium now, you'll join the ities: Gas and Electricity. The techduring rest of the day and minimal elite groupnology of readers who receive unbeatable, was pretty much perfected during night. This will of course be by multiple providers top-qualityindependently venture capital news every day. backed with ability to respond dylike Amazon and Google for their namically to unforeseen sharing of a growing internal infrastructure news link on Digg.com. One would needs. Creating farms of redundant think that this is what everyone ought low cost commodity linux servers to be doing with the promise of hourly backed with intelligent virtualization elasticity. The reality is that tooling and redundancy software layer on has not yet caught up to make these top allowed them to scale cheaply scenarios trivial. Result: we are still for huge growth these players expe- not leveraging the full savings that the rienced. Then Amazon changed the cloud enables and just scratching the game by exposing its infrastructure surface. as a cloud service to other providers Companies like Neev Tech who did not want to invest in creat- (www.neevtech.com) are breaking ing such capabilities themselves. new ground by creating innovative Amazon also labeled its service: tooling and enabling companies to ex-

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An Elastic Cloud Strategy thus gives companies an opportunity to massively reduce their infrastructure related expenditure while also maximizing the savings that can be made on the cloud. The space is currently open for a lot of vendors to provide the next level of innovation on top of the cloud infrastructure and extract the true promise of elasticity. The cloud providers are themselves improving the tooling available out of the box but the vast variety of enterprise architectures will need professional services help to effectively utilize these cutting edge platform features. Apart from elasticity, monitoring is another significant area especially when we include performance monitoring and not just uptime monitoring in the purview. This is especially critical for enterprise applications where server infrastructure of mobile and sales applications can be very performance sensitive. si

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April 2011

The author is Managing Director, Boston University Office of Technology Development

Business: By Vinit Nijhawan

.S. public and private research universities are by far the best in the world at educating young people and conducting basic and applied research. Harvard College was founded in 1636 and was followed by many other universities up and down the east coast. However, the first university to emphasize research along with education was Johns Hopkins, founded in 1876 with a $7 million gift from railroad baron Johns Hopkins. Johns Hopkins model was partially adapted from German research universities. Following Johns Hopkins many U.S. industrialists became benefactors of private and public research universities: Rockefeller to the University of Chicago in 1892; Carnegie Institute in 1902, etc. The Federal government established the National Academy of Sciences in 1863 and the Morrill Act was signed in 1862 provided federal land to states to establish public universities. The first land-grant college was Kansas State University which started in 1863 (where my father went for his engineering degree in the late 1940s). Michigan State University, Pennsylvania State University, Rutgers, University of Wisconsin followed closely behind. The Federal government also passed the G.I. bill after WWII that allowed hundreds of thousands military personnel to get university education. Federal institutions like the National Science Foundation (NSF) and Nasiliconindia

Investing in University Spin-Offs

tional Institute of Health (NIH) were also created right after WWII, launching the 60-year technology led economic boom the U.S. has enjoyed. Between 1940 and 1950, the contribution of the federal government to university incomes increased from $39 million to $524 million. The direction of university research shifted away from research intended for local industry application to more basic scientific research, with applications to national goals in defense and health care. The economic impact of U.S. research universities in commercializing their research has been immense: Since 1939, Stanford faculty and students have founded more than 2,454 companies, such as Hewlett-Packard, Cisco, Sun Microsystems, Google, Yahoo, contributing to the economic dynamism of Silicon Valley. In 2009 MIT publishedEntrepreneurial Impact: The Role of MIT. In 2009 there were 25,800 active companies founded by MIT alumni that employ about 3.3 million people and generate annual world revenues of $2 trillion, producing the equivalent of the 11thlargest economy in the world. According to AUTM (Association of University Technology Managers) just in 2009: 658 new commercial products introduced; 5,328 total license and options executed; 596 new companies formed; 3,423 spinoff companies still operating as of the end of 2009 Gulbranson and Audretsch (2008) studied two programs centered in engineering schools, the MIT Deshpande Center for Technological Innovation and the UCSD von Liebig Center. After granting less than $10 million to projects, these centers helped advance 26 spinoffs that have raised a total of $160 million in outside investments. Between 1980 and 1999, university spin-offs in the United States created $33.5 billion in economic value (Cohen 2000), at an average of $10 million per startup

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In 1980, Congress passed the Bayh-Dole Act that enabled universities to own and manage the intellectual property (IP) arising from federally sponsored research. Universities were obligated to commercializing this IP by transferring it to existing and spinoff companies. The resulting licensing revenue was split between the university and the faculty inventor. Shortly after 1980, spin-offs and products based on university IP rose steeply as universities and faculty were incentivized to commercialize their inventions (see charts below). Boston University (BU) was established in 1869 as a divinity school. It became a major commuter university in the Boston metropolitan area

with about 300,000 living alumni. More recently it has become a renowned research university with over $400 million annually in research funding going to over 2,000 laboratories. BU has 19 colleges and schools with 3,300 faculty, 16,000 undergraduate and 13,000 graduate students. The Office of Technology Development was established in 1975 to commercialize BUs research. BU established a venture capital fund called the Community Technology Fund in 1975. By 2007 it had invested $14M with one significant exit: A123 Battery, an MIT spin-off that was incubated at BUs Photonics Center incubator. In 2007 the new President of BU, Bob Brown (formerly MITs Provost), decided that BU should not have a VC fund and the

Community Technology Fund was shut down. The un-invested portion of the fund was placed in the university endowment and the Office of Technology Development receives an annual draw to support BU spin-off activities. These are invested in two programs: Ignition Grants that advance laboratory research towards commercialization and Launch Awards that provide bridge equity funding for BU spin-offs that will raise venture capital funds. The university spin-off process requires tremendous support from university tech transfer offices. Faculty are generally nave about spin-offs and have to be educated about the process. Entrepreneurs find it difficult to identify viable spin-off research projects and have to be matched to the appro-

priate project. The scale of the opportunity is immense, for example at BU at any given time we are managing about 600 commercialization projects. Each one has a unique path to commercialization. These can be broadly broken up into two distinct paths: license to an existing company or license to a spin-off company. Licensing to an existing company is ideal but it is hard to match existing companies R&D plans with university research. One has a lot more control of the commercialization process with spin-offs though not with followon funding from VCs. At BU we have developed a New Ventures group and process that has the following components: (1) the Kindle Mentoring program that has about 100 start-up CEOs and executives that are matched to spin-off companies; (2) Gap funding with Ignition and Launch awards; (3) student analysts who help with go-to-market strategies and (4) a New Ventures director who orchestrates these assets. They key to obtaining follow-on funding from VCs or other non-equity sources of funding is to match the right entrepreneur/CEO with the appropriate project at the right time. I joined BU in January 2010 to transform the Office of Technology Development. Having no background in university technology transfer turned out to be an asset as I brought new thinking into the process. We are one year into a threeyear plan to transform the way university technology commercialization is done. A key component of the plan is to create 10 spin-offs a year from BU intellectual property and know how. At the end of 2010 we had a dozen spin-off in the market raising equity financing. Several have raised small amounts of seed financing from angels and recently we received our first tier 1 VC term sheet. Stay tuned. si
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April 2011

The author is Director, CSS Corp Labs

Technology: By Ezhil Arasan Babaraj

BPO on the Cloud

loud Computing is nothing but providing Information Technology (IT) related components such as computing, storage, network bandwidth, security, platforms and software as a service. It is considered to be a cost effective method, because you need not pay upfront a hefty amount and you will pay for what you use. Simple Analogy to Cloud Computing I am sure we are all not new to the idea of pay per use, i.e., utility model, we have been using electricity, telephone, mobile phones in the utility mode and the government & telecom providers have invested a lot in building the infrastructure to provide best services to you. In the similar way,
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Cloud Computing Solves: Cloud Computing is going to change the way we compute soon. It is important for the developers to understand that many problems that we currently face like application not scaling, database reached maximum number of concurrent connections, and single server deployment are being addressed by Cloud Computing. From a business perspective you will not be required to invest on your IT infrastructure immediately with a huge CAPEX rather you can invest as your business goes on an OPEX model.

Cloud Providers like Amazon, Microsoft Azure, Gogrid and Google have invested a lot and created the infrastructure to be used by end users like us.

Now, how does a BPO benefit using Cloud Computing? Given todays BPO scenario, if you want to support global customers by 24 X 7, 365 days, you need to have a reliable infrastructure. Almost all the BPO companies have heavily invested on their data center infrastructure comprising of voice technology, network bandwidth, Servers, CRM to support, Softwares that are required to run the business process and more. The cost of upgrades, maintenance, new project accusations are high due to the initial investment. But, in the Cloud Computing world, all the above defined infrastructure components are available as a Service for a BPO to kickstart. It allows them to be competitive in their market offerings. In fact, with this a BPO can be virtually run with a very

minimal or no office space. Some of the relevant Cloud Computing technologies for the BPO are: OpenVBX powered by Twillio (http://www.twilio.com/openvbx) OpenVBX is a web-based open source phone system for business. Get virtual phone numbers, and build business apps with the easy drag n drop editor. OpenVBX comes with applets for auto-attendants, call forwarding, voicemails (with transcription), receiving text messages and more. Integrate OpenVBX with your existing systems. Build your own custom phone applets with just a little bit of PHP. Rebrand and resell OpenVBX to your customers. Give every user their own phone number and personal conference line. Dial whole departments, share voicemail messages with the team. OpenVBX is for companies

and collaboration. Collaboration Platform (Google APPS & App Engine) (http://apps.google.com) Google Apps comprises of Email Services, Google Docs with customized email addresses with your own domain..etc. There are business apps such as CRM, Accounting, ERP related apps are built by others deployed in Google App Engine platform.Computing & Storage (AWS, Microsoft Azure) (http://aws.amazon.com) (http://www.microsoft.com/enin/cloud/default.aspx?qstr=CR_SC C=200017675) If you already have any apps that are purchased for your Call center need, you will be able to securely & remotely host them in the IaaS Cloud such as AWS. But, Azure allows you to host both your .NET Apps in their PaaS platform or other technology apps in their Windows Azure platform Human Resources as a Service (AWS M-Turk) https://www.mturk.com/mturk/welcome) This is a very interesting service by Amazon, if you want a human resource specialist to help you out for

a specific job, you need not recruit them, rather you can send your job description and its related details to Amazon Web services as request. If they find a matching job profile, they will notify the resource, upon interest in both the sides, the defined job can be executed. The best part about the whole services is completely automated and you can program it using their web services API for M-turk. App Delivery Platform (Spoon.NET) (http://spoon.net) Spoon is a very interesting app delivery platform using app virtualization technology. A BPO to run on the Cloud requires certain apps to be made available for their person who provides the operations support. Spoon.NET allows you to make the apps available from the Cloud. CRM Platform (SalesForce.com) (http://salesforce.com) Saleforce.com is a SaaS platform provides complete CRM required for Support business on a utility mode. It has a PaaS extension called force.com, which allows one to develop customized applications using Salesforce.com object model using web services API. si

The consumer purchase rates for personal computers and mobile phones (excluding smartphones) will decline by 39 percent and 56 percent this year compared with last year, respectively, says a new Accenture survey. By contrast, buying rates of 3DTVs (three-dimensional TVs) are expected to rise 500 percent; tablet computers 160 percent; ebook readers 133 percent; and smartphones 26 percent. The survey focused on usage and spending on 19 different consumer electronics technologies among more than 8,000 consumers in eight countries in both emerging markets and developed economies: Brazil, China, India, Russia, France, Germany, Japan and the United States.

April 2011

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April 2011

CEO Speak: By Jaya Smitha Menon

BIG
I

Remain Small to be

Key trends in the IT Services Market

f you look at the past, IT was what I would call a glass house of technology where few technologists in a company just wrote lot of code. But later, the glass house was broken and it became a companywide phenomenon where integration, collaboration, and ensuring that various applications were interoperable became important. Today I look at it as IT shifting to ET(Enterprise Technology) where all of what I just described as IT plus connectivity of various devices and availability of data in real time and not just information but intelligence that can be acted upon and controlled. And this change of going from technology glass house to IT created a tremendous opportunities, I expect this IT moving to ET will create many more such opportunities. Then there are implications around this because now the process in technology is intertwined, meaning Knowledge Process Outsourcing plus technology, as now companies need to have end to end view of the business. Going to ET will createa opportunity in every segment. What each company has to look at is the capability they currently have in a particular domain or particular industry, what they want to build and can build, what foot print they need to have and this will determine which areas will see growth. But clearly outside the most popular industries of today there will be opportunities in areas that are going to see significant changes, like clearly the power or utility companies, technology companies, manufacturing segments, retailers, how they operate, all these are going through major changes and becoming bigger users of IT compared to how they use it today. Priorities as a CEO My first priority is being able to remain who we are and grounded what has made us successful and I call it remain small, to be big. One of our strengths is that we are small enough to listen, we have direct connectivity with our
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client, and we understand their needs, aspirations, and pain points. So clearly as we are growing and becoming bigger in terms of employee strength and revenues, ensuring that we remain small to be connected with the clients and to each other internally. Second priority is as we manage growth how to keep all our associates keep growing and becoming better individuals, better performers and better equipped to handle challenges because personal development and professional development go hand in hand, and to deliver outstanding results you need outstanding people as well as outstanding skill sets, so how do we make sure we continue to evolve to that and stay ahead of the curve. Thirdly, as we grow how we make sure that the culture of collaboration, you know the foundation of trust, remains. So these are three important priorities from my stand point.

we remove all the barriers and prepare ourselves to take advantage of the tremendous opportunity that is present in the segment we operate in. I began my career in Siemens 35 years back, and in my journey, I always felt that what differentiates an outstanding company and mediocre or below average company is leadership.

Thoughts on Leadership I believe that leadership is about change, how do we bring about the change and how we make sure that the who, what, how and why are understood by all the people. It is about leading by expectations as opposed to leading by micromanagement. A leader should outline the thoughts and ideas of who we can be and then ensure that

Prashant Ranade was appointed CEO of Syntel in February 2010, after serving on Syntels Board of Directors since 2007. Earlier, he served as President and CEO of Siemens Logistics & Assembly Systems. He has also held leadership positions at Rockwell Automation and Siemens AG, where he began his career over thirty years ago as an engineer, before working his way up to General Manager of its automation division. Throughout his career, Ranade has demonstrated outstanding leadership skills, the ability to understand and translate new technologies into global product strategies, and deep domain knowledge in healthcare and life sciences, hightech engineering and manufacturing, and supply chain and logistics automation. He holds a B.S. in Engineering from IIT Bombay, an M.S. from the University of Cincinnati, and an MBA from Xavier University, Cincinnati.

Leadership lessons learned along the journey Leadership is all about self-awareness, recognizing your feelings and strengths. Then make sure that the passion in individuals and purpose of organization are alike as none of us like to be told what to do. However if they are inspired by how and what they want to be in a way that it aligns with the purpose of the organization, then ordinary people find a way to do extraordinary things. All leaders should remind themselves that they are not tower of wisdom. Every individual has leadership in them. How do we create an environment where people are comfortable expressing their ideas and opinions. Because even the leaders in the world, they dont have that glow around them where they have just brilliance emanating from them all the time. It is those flashes of brilliance that creates the impact. So how an organization and its leader create a culture where they can capture the collective flashes can be is very crucial. Style of Management My first priority is to make people around me comfortable. I do set demanding goals, but then they understand that everyone around them is going to help them succeed and we have an enabling culture as opposed to culture driven by fear and miss-trust. So building that trust, building the right environment, and getting people to be part of high performance teams to achieve extraordinary goals has been my style.

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Dilemmas and Challenges of a CEO The challenge is making sure that we are getting better every day. We are in knowledge business and according to a lot of experts the world repository of knowledge is growing at 7-8 percent every year. So, no matter how good we are today as individuals and as organization, unless we are learning at a rate above 7-8 percent we will not remain relevant. Ensuring that we stay ahead of this curve is the biggest challenge for me and my counterparts. Then comes the challenge of search and development of talent which is related to this knowledge business. The next challenge is around globalization. How do you keep global thinking and yet act local? That requires something that are global across the globe and something that are unique. Then how do you maintain governments compliance and yet remain nimble, flexible, alert, and responsive to your client needs. Dilemma is more about constancy and change. Companies succeed because of who they are, so you have to stay true to who you are but at the same time make sure you are changing. Combining those two requires understanding of the four or five key values and attributes that have made you successful. Then also be aware of how the environment around you, the technology around you, the demographics, and aspiration of people are changing and balance all these factors. si
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Passion and Paranoia Those are really two sides of the same coin you have to be paranoid to make sure you dont get complacent. But as long as you combine that passion with purpose then you stay away from that fear. When you are grounded in trust and transparency then it is not a conflicting situation but self supporting, because some paranoia actually helps you perform better.

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April 2011

siTech20
U.S INDEX
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 RANK COMPANY
Index of the top tech public companies in U.S founded and managed by Indians

Stock Price (US$)Closing 03.29.2011 81 53 41 46 38 26 34 28 18 42 34 19 15 26 8 7 24 37 20 18

52 Week HIGH 81 60 45 54 38 27 35 43 22 46 34 25 19 28 13 7 34 40 22 20

52 Week LOW 46 31 22 33 26 10 10 21 14 22 6 10 8 12 6 3 16 23 15 9

% CHANGE IN PRICE 4 Weeks 52 Weeks 13 -3 32 -8 2 5 13 7 0 -2 21 3 -17 6 0 -5 14 -4 -10 6 59 35 33 31 33 139 155 178 -12 71 240 93 67 82 0 154 19 31 17 58

CAPITALIZATION In $ Millions 24620 2190 21800 10860 7130 4320 3430 971 1910 1980 2240 1040 1020 1120 860 442 676 693 586 277

Cognizant Tech. Syntel Juniper Networks SanDisk Corporation Microchip Tech Tibco Software Aruba Networks Make My Trip Qlogic Corporation Cavium Networks Isilon Systems* iGate Ixia NetScout Infinera Corporation Magma Design Sycamore Networks OSI Systems EXL Service holdings Keynote Systems

CTSH SYNT JNPR SNDK MCHP TIBX ARUN MMYT QLGC CAVM ISLN IGTE XXIA NTCT INFN LAVA SCMR OSIS EXLS KEYN

INDIA INDEX
RANK COMPANY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

*Isilon Systems has been acquired by EMC Stock Price INR Closing 29.3.2011 3172 1139 464 682 480 66 424 836 473 415 138 100 362 42 2070 184 56 161 38 52 Week HIGH 3499 1220 500 910 517 114 711 1655 625 477 201 144 665 79 2749 215 74 237 70 95 52 Week LOW 2510 685 249 477 340 54 374 655 411 370 128 83 343 37 1313 131 43 147 32 45 % CHANGE IN PRICE 4 Weeks 52 Weeks 6 3 6 6 9 6 -2 9 5 0 -1 -3 -2 8 4 1 14 5 10 -4 14 49 8 -27 21 -35 -35 -48 -5 1 -20 -25 -31 -50 79 23 -25 -8 -36 -16 CAPITALIZATION In Rs. Crore 182188 222866 113759 8580 32914 7283 8897 3852 6308 4037 2231 2188 1477 709 3135 1825 925 423 394 356

Index of the top tech public companies in India

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Infosys Technologies Tata Consultancy Services Wipro Ltd Tech Mahindra HCL Technologies Mahindra Satyam Mphasis Financial Technologies Patni Comp GTL Ltd Rolta India HCL Infosystems Mindtree Moser Baer CMC Ltd Polaris Software NIIT Ltd Sasken Communications Technology Sonata Software Subex Systems
April 2011