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Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta (Part 1)

Posted on Friday, Apr 1st 2011

Neeraj Gupta is the CEO and co-founder of Systems In Motion, a nearshore outsourcing company in Ann Arbor, Michigan. Previously, Neeraj was a member of the executive team at Patni, a $700 million Indian IT services company, and founder/CEO of Cymbal, a services company focused on the telecom sector. He is an investor in and board member of various technology startups.

Sramana: What is the background story of the three founders of Systems In Motion? How did you meet?

Neeraj Gupta: The genesis of the organization came from all three founders, each of whom had experience working in global services. We came together and saw how the landscape was changing. We were in Silicon Valley and noticed a lot of innovation coming out of the SaaS industry and how enterprise services were coming together in that domain. Looking at global services and SaaS, we felt the industry was ready for change.

We had all done enough work in the offshore industry that we felt the challenges that the industry would face were significant. They were driven by cost and inflation in India. Companies there were not innovating at a pace that they needed to. We all decided to leave our corporate jobs. Dave and I knew each other from the global outsourcing industry where we had met a number of times, and Mike was a customer of mine.

The concept came together very quickly. I had left my job and I told Dave about the concept at a lunch meeting. He about jumped out of his chair because he had been thinking about the same thing for quite some time. He wrote a white paper about lower-cost domestic sourcing. My issue was that the model would not work unless we put a fair amount of innovation into the concept, regardless of the economics of the model.

The model had to be changed from a resource-based model to one that was output based. While there has been a lot of discussion in the industry about how to move to an output-based model, no scalable model had come about. Our model married the scale and operating fabric of the Indian model with the innovation of Silicon Valley. That is the experiment that we started with Systems In Motion.

Sramana: All three of you are based in Silicon Valley?

Neeraj Gupta: We are, and we added a fourth team member because we have a strong Midwest operating component. Colin [Chapman] joined right after the company was founded. He had a lot of experience building delivery centers. It did not take us much effort to get people like him to join because anyone who has been in the industry long enough understands what the good, the bad, and the ugly is relative to other models. The issue with getting the model to work in the U.S. has always been economics. We have a base operating model that is set up where we can get reasonable cost delivered here in a productive and innovative manner. We believe we can beat nearshore vendors in Canada, Mexico, and Latin American companies and over the course of a few years, as we become more tied into the global provider stream, we may be able to give direct competition to the larger providers in India.

This segment is part 1 in the series : Building A Nearshore Outsourcing Company In Ann Arbor, Michigan: Systems In Motion CEO Neeraj Gupta
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