Outsourcing: Lalit Dhingra, President Of NIIT Technologies (Part 5)

By Sramana Mitra and guest author Aditya Modi

Lalit Dhingra: The people who are doing BPO work in Manila want to venture into IT, too.

Sramana Mitra: But they are different skill sets. If you want to do IT software development, you need a higher level of skills than if you are doing pure BPO work.

LD: Yes. That is how the expansion happened. Some of the folks who were in BPO went into IT in that case and took some projects. The experience has not been that great in terms of productivity, but they are doing really good work from the design perspective.

SM: I am just giving you some perspective. I have been talking to a lot of people who are in your business. East Asia I don’t think has really ramped up to become an outsource software development destination at all yet; however, I think Eastern Europe is doing very well. Eastern Europe is really ramped up. There are a lot of people who are doing a lot of very strong software development operations in Eastern Europe. Latin America is actually, in some categories, coming up rather well. I spoke recently with the person who runs a TCS in Latin America. TCS has 6,500 people in Latin America. They are a very productive operation. I think the productivity question that you are raising is that basically, TCS in Latin America is implementing TCS India’s processes. A lot of it is also processes, building processes that allow you to be productive and so forth. If it’s an experienced vendor who has good process they would be productive, but if you don’t have the experience and the processes, then you are going to be less productive.

LD: You are right. You are absolutely right. My experience is that maybe the people, the companies who are there I mean not, Indian companies setting shop in these countries. So if Indian companies like TCS or Infosys or, say NIIT, takes up the processes and goes and set up a shop in Latin America or even in the Philippines, the processes would be different.

SM: One of the value propositions around which Latin America is getting projects, from the U.S. in particular, is the time zone issue.

LD: That is right.

SM: And the same with nearshore United States. There is a nearshore United States trend also going on. I have talked to some people who are building based on that trend. For both of those categories, definitely, there is an interest in getting people in the same time zone to have more overlapped working time. What other observations do you have about the direction of your industry?

LD: From the outsourcing perspective, I think the nearshore is key, so I work more than the nearshore I am looking at and the rural outsourcing, which is taking secondary cities in the U.S. and trying to create development centers in those areas and connect some of the on site business with those rural centers.

SM: Is that something you are doing now?

LD: I am working on it. Probably by the middle of the year, which is July or August, we may have something going for us.

SM: And can you discuss with me, if it is not confidential, what are the parameters when you are looking at different regions whether they are small towns or rural towns?

LD: Well, being connected with the main towns is one. Places that are well connected and have a good university nearby so that you can obtain resources from that university, and the client is willing to take and give the work there. The cost of living and everything has to be taken into account. So, those are some of the criteria we are looking at. We are choosing those particular towns and affiliating with universities and making sure that we get the resources to do the job.

This segment is part 5 in the series : Outsourcing: Lalit Dhingra, President Of NIIT Technologies
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