Outsourcing: Sanjay Dhawan, CEO of Symphony Services (Part 4)

SM: You’re located in Bangalore?

SD: The main sites are Bangalore and Pune, but we do have satellite offices in Mumbai and Delhi, Gurgaon.

SM: Is there any thought in the company to look at other cities, more heartland cities, lower cost destinations?

SD: Within India, do you mean?

SM: Yes, within India.

SD: Yes. We constantly keep evaluating it. Having said that, the second tier cities in terms of what we do – remember, we’re not a BPO shop. The cost of the kinds of employees we look for and hire doesn’t vary that much between tier one and tier two cities. So, the advantages of going to a tier two city for a company like us are minimal. Yes, the infrastructure costs might be slightly lower than operating in Bangalore, for sure.

SM: If you were setting up shop in a tier two or tier three city in a significant way, I’m sure you would see cost advantages, including salary advantages.

SD: Salary, at least slightly, yes. But, then again, the pool that you hire from is also very limited at that point, since our pool is more of a specialized pool. If we were a BPO shop, yes, you are right. We would absolutely see significant advantages. But we constantly keep looking at it, not making any decisions yet with regards to if there is a tier two city that might make sense for us. Especially in our space, our clients and their access to our facilities is also very important, because, like I said, this is hard-core product development. The onshore and the offshore teams are interacting physically and otherwise together in proximity to international airports and all that stuff also [influences] our decisions about where we are located.

SM: Interesting. I was talking to Sridhar Vembu of Zoho recently – I’ve known him for a long time – and I really find him to be one of the most unique thinkers who’s turning these hiring models on their heads. Zoho actually does not compete for the same talent pool that you compete for, perhaps, because they don’t try to hire very highly experienced or trained people. They hire people from high schools, and they run their own Zoho University, and they train these people.

The thesis is that outside of the top tier engineering colleges, a lot of these engineering colleges are not very good. So, spending three or four years in a second tier, third tier engineering college is a waste of time. They’d rather just train these people on their specific technology or programming languages, whatever they need to train on, and they are productive within six months. Because these are not their resumes don’t have the same level of caché, their attrition is very low. Now Sridhar is setting up shop outside of Chennai in a small town where they’re going to have a large operation. They’re following a similar model to what I’m telling you about, and I find that intriguing. Part of the problem with India is that everybody’s interested in the same pool, same kinds of background and in the same locations. As a result, the amount of pressure on Bangalore, Hyderabad, Mumbai, Chennai, Delhi is immense. The quality of life in these cities really sucks. So, people like you who are in positions to impact these trends in positive directions, there’s some level of sustainability responsibility as well, right?

SD: Yes. You’re absolutely right. There are good tier two cities like Jeypur, like Chandigarh.

SM: Lucknow, Chandigarh, all of these are good cities.

SD: Yes. Mysore, all that. We’re absolutely thinking about that as well. By the way, we run our own university as well. So, we have a Symphony University where we do something similar where we bring new graduates, and we train them for a few months before we can deploy them on the technology and customers where we need them. Yes, absolutely, that’s an innovative way of handling this challenge that many companies face.

SM: If you deploy those kinds of strategies more aggressively, you would handle your attrition issues, also. If you go to a location where there’s nobody else in a significant way, you become the dominant employer. Microsoft did not set up shop in Silicon Valley. Microsoft set up shop in Washington, in Redmond, and they dominated. For the longest time, they dominated the privileged employer status in Washington. Now, there’s a lot more going on. There’s a lot of startups. It’s a more mature eco-system. But, still, Microsoft dominates. You create that kind of dominant position in a second or third tier city. I think that is something that India really needs, and, I would say, you need as well. But from an Indian IT point of view, this kind of thinking is necessary, don’t you think?

SD: Yes. It is something that you cannot debate. It makes sense. The Catch 22 comes around scale, because, again, in our business, scale is important. You can’t have sub-scale operations. If you have sub-scale locations, your overheads are increasing and so on and so forth. So, any such move has to have scale in mind.

This segment is part 4 in the series : Outsourcing: Sanjay Dhawan, CEO of Symphony Services
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