Global tech chiefs say India position still strong

HCL Tech Global Meet is underway in Delhi. Vineet Nayar, CEO of HCL Tech, who is present there talks about what the key take-aways and buzz from the summit is.

He said that this was the biggest CIO event anywhere in the world, outside of Vegas. They are here to discuss the fact of disruptive trends in the business environment. The CIOs are struggling to respond to them. He believes, collaboration is one way you could respond to them.

Along with him were present Peter Bendor-Samuel, Founder & CEO, Everest, Tim Mann, CIO, Skandia and Duncan Aithchison, Partner & MD at EMEA & APAC, TPI.

Excerpts from an interview with Vineet Nayar, Peter Bendor-Samuel, Tim Mann and Duncan Aithchison:

Q: What the key takeaways are and what is the buzz from that summit?

Vineet Nayar: One of the objectives of the global meet was the fact that we believe that if we put customers together, we would have about 400 practitioners talking about their experiences. That value, which we'll create for the rest, is significantly more than what HCL can contribute and that’s the reason we put this event together.

This event as per my understanding is the biggest CIO event anywhere in the world, if you remove what happens in the Vegas. The big issues, burning issues, which we discussed, the fact that there are disruptive trends in the business environment. CIOs are struggling to respond to them. Collaboration is one way you could respond to them. So how you structure collaboration and where are your service providers with your technology venders and among customers, is the big point of discussion today.    

Q: Something is of a more immediate concern right now. Did any of the CIOs come and evince problem about the value proposition that we are giving right now or even the wage cost that has been increasing or the rupee appreciation?

Vineet Nayar: They did express concerns that they do not want to deal with vendors purely as suppliers. They do not see value in pure supply of bodies at low cost, they want incremental value from Indian providers, partnerships that are more structured around win-win. They want incentive structures aligned to their wins and that was a theme that we heard.

We did not hear anything of the US slowdown or the fact that they are concerned about India competitiveness and we had a full strategy session on India competitiveness. They are more concerned about the fact that you need to become closer to us, move up the value chain and add more value than we have been adding, which is a theme I have been talking about for the last two years.

Q: Last year when you gave the USD 200 million to HCL, you had said that the whole educational system on the low weight structure was what attracted you to India. Do you see the mindsets changing among the CIOs, what is bringing them to India?

Tim Mann: We picked out three things of why we chose HCL and Vineet as a partner, they were in particular order about capacity and the ability to get lots and lots of highly talented people onto our account. Second thing was all about competence, which is getting into some technologies, also some of the quality process that HCL have in CMMI-3 and third was the cost.

We signed a deal with Vineet Nayar in February this year, we are very pleased with that. Amongst the CIO community that I represent, I think you are seeing those three things represented. I certainly do not see cost as the leading reason people are coming to India, I think it is more about capacity and competence, you cannot easily find in your own home market.

Q: I had read a recent report, which TPI has published in which the cost of savings by offshoring is reducing. Could you elaborate on that or are you seeing a different kind of value proposition that is attracting people?

Duncan Aithchison: I still think we are in the earlier stages of the near value propositions coming through. Still the core driving the offshore engines is still heavily influenced by the price advantage. Though obviously that is becoming a narrow competitive issue as both the industry over here develops and indeed as the multinational players develop their own capabilities.

So the price differential is no longer the compelling issue. There is certainly an appetite amongst buyers for more, in terms of value propositions. I have to say that still there is a struggle to articulate what that needs to look like and how one that actually makes it happen commercially. Outsourcing is still strongly cost influenced at its core.

I think the challenge is in moving forward, not just for those who are playing from the Indian side, but equally all participants in the outsourcing market do need to look for more creative propositions that will actually deliver true measurable incremental value.

Q: If you could elaborate on the kind of large deal wins and the different changes in the value propositions that we are bringing to the table?

Peter Bendor-Samuel: Things are evolving, no doubt. Duncan’s right, the cost in any service business is always an issue and quite frankly the Indian position is still a very strong one with regard to cost.

Although, we have had rupee appreciation and inflation here for the capability and the quality of resource, there is still no comparable destination similar to India. So we have got some way before that erodes to a point where it affects the market share, but we are seeing a change in the value proposition and the evolution of the value proposition early on. We are seeing the number of the big Indian switch providers, the major Indian providers evolving to be far higher value services.

They are starting to drive transformation within companies and this transformation yields benefits well beyond the commodity or the specific service. They are transforming how people go to market. They are transforming how process are done and that’s based on a very strong set of technical capabilities. They have developed over the last few years and quite frankly some of the very best transformational talent in the world today is coming out of the Indian market.