Building An Outsourcing Company In China: Bleum CEO Eric Rongley (Part 2)

Sramana: When you decided to start Bleum in 2001, what area of outsourcing did you intend to focus on?

Eric Rongley: I was doing product development when I was in India and had teams as large as 100 people. I saw companies like Infosys that were very small, and I realized that companies that understood outsourcing and got the formula right could scale their companies dramatically and quickly.

My model was a company called Cognizant, which was based in Chennai. They had 200 people in 1997 and now have 60,000. It is awesome to see a business that can scale like that. I concluded that the companies which succeeded were the ones that focused on delivery and execution. The reality is that there is excess demand in the marketplace for high-quality service. If you can supply that, the market will respond. Bleum is still very much operating on that premise.

Sramana: In 2001, the outsourcing market had started to find its stride. In the process we have developed several flavors of outsourcing. Where did you find the opportunity to focus?

Eric Rongley: Our focus is software development. The business model that we engage our customers in is an offshore development center. An ODC is a team that is dedicated to a single customer. They are dedicated to developing training material, retaining the team, and improving the efficiency and quality of the team over time.

This is one area of outsourcing that is very strategic for companies. It is a big commitment. A company will guarantee 50 to several hundred heads for three to five years. That vendor will become very close with the company in their operation. It is harder to win those deals and it is harder to be successful. However, once you have proven yourself to the company and made yourself invaluable to them, then it becomes a very effective way to grow your company.

In India, I saw that successful companies were looking for close relationships with successful customers who needed large flows of work. If you are doing random one-off projects then you are running on a treadmill. You spend a lot of effort to go nowhere. We focus on high-value software engagements. They are scalable and it is an area where there is a lot of variation in quality of service across the industry. A lot of firms take it very seriously, while other firms just treat it as a function of supplying bodies and offer only resumes to companies to allow them to pick whom they want.

Sramana: What types of teams were you building for your client companies? Was it primarily product development?

Eric Rongley: Not necessarily. In some cases we have software companies who are our customers and we do a majority of the development for their product. That type of customer consumes a lot of software development. Another common customer is a large bank or financial institution that has huge operational systems that constantly need upgrades or enhancements.

A customer who chooses us over another vendor is a customer who needs their software to be of very high quality. A trading system for a Wall Street hedge fund needs a fast system. An increase in performance of one second will let them make millions of dollars a year. They spend the money getting that last bit of performance from the system. That is the type of customer we look for.

This segment is part 2 in the series : Building An Outsourcing Company In China: Bleum CEO Eric Rongley
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