Outsourcing: Lalit Dhingra, President Of NIIT Technologies (Part 3)

Sramana Mitra: One of the things about domain knowledge is that in IT-specific projects, the data structure is specific to that business. So, you do need an understanding of the business to even define its data structures and workflows.

Lalit Dhingra: That is correct. That is very straight business. But if you want to add value, how will you do it if you don’t have the domain [knowledge]? We don’t know what these guys are looking at. At present, the Virgin America website has gone through three stages. We know exactly what they are attending it to, and how it will change to bring them more value. You are right from the IT perspective. Yes, we need to understand the workflows, data structures, and everything to go into it.

SM: OK, so let’s talk about who does the kind of consulting you are talking about. This is consultative business process engineering, almost. It is not exactly pure IT software outsourcing.

LD: Well, it is integrated. These are the IT business processes and infrastructure all together in the solution.

SM: Yes. So, this is serviced by your on-site team, yes?

LD: On-site as well as offshore; some are offshore and some are on-site.

SM: It has to be done on-site, doesn’t it?

LD: The designing and all that, it can go to offshore, right?

SM: Yes, offshore for the implementation. But the actual design and consultative business process design, all that needs to be done on-site, yes?

LD: That’s right.

SM: Indian outsourcing companies have been shouting that they want to move up the value chain, they want to move up from pure implementation to consultative projects and more like what Accenture has been doing for a long time, whereas Accenture and IBM have been moving downstream into more of the implementation, and so on. So, it sounds as though you have made a reasonably successful transition into that kind of higher-level consultative process. Is that correct?

LD: I will not define the way the industry is defining today. We will revolutionize the entire thing. I believe if you look at what I call consultative pyramid, at the top of the pyramid was the people who come in and give consulting on the business, saying OK, this is how I will transform your business. Booz Allen, Accenture, McKinsey, they all play in that, right? And then in the end, at the bottom of the pyramid, is where most of the Indian companies started their careers. They say, OK, we will do the implementation; you tell us what do we build, and we  build it; we’ll give you cost effectiveness because we are offshore. And then the next round was OK, I will give you more value-add; I can come up with tools and technologies so that you get more productivity from the dollars you are spending.

That is where it was. There is something in between. The guy says, look, I understand what my business is. If I understand what my business is, is there somebody who can come and say, OK, translate my business into the entire application and implement it in a cost-effective manner. That is not the top of the pyramid, not exactly the bottom of the pyramid. It is somewhere in between. We are making transition not at the top of the pyramid. We are in that in between. We are focusing on the in-between stuff in the pyramid, where we are we going to say, We understand your business. We know what you need, and here it is. We are proactively telling you this is how you should do it so that you can get better solutions to the market faster.

SM: OK, and with that focus and the particular verticals you are focusing on, would you talk to me about who you compete with?

LD: Everybody. Everybody says that we are going toward that. This year [it’s] Cognizant, Infosys. Everybody says we are in that.

SM: And how do you win those deals?

LD: We prove it to them. When we compete, we go and we give our solutions. It is very simple. If I go, say, to an insurance company, and we have 15 to 16 good insurance clients, I know what we have done in that. And we have a solid group that proactively tells our insurance guys, OK, this is how we can implement the solutions for you because we understand the domain. We can come up with better solutions, and that is how we are winning.

This segment is part 3 in the series : Outsourcing: Lalit Dhingra, President Of NIIT Technologies
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