Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq (Part 3)

Sramana: What did you do next?

Mohammed Farooq: I decided to move back to Texas. My friends from the State of Texas Governor’s Office had called me back. They wanted to transform Texas technology due to health laws, so I took over as the CTO of Health and Human Services. I drove state wide transformations and for the next seven years, worked as the CTO running a $6 billion IT operation. It transformed the state into a shared services model.

I left in 2007 and they called me back in 2010 and told me that it was not working. They were locked into one sole-source provider IBM. Their costs were going up and they had no way out. I proposed a new model to them which was to treat IT as a supply chain. The cloud lets you do that. Can you route your demand to any provider in the supply chain? You can do that in real time. My friend thought I was nuts. I knew that the cloud had given us the opportunity to do that, but there was no technology in place to be the router or broker. You need to put a lot of business brokering in as well.

That is the genesis of Gravitant as a product company, which occurred in 2010. That is my next journey into entrepreneurship. Gravitant took on the challenge of enabling the vision to take enterprise IT and operate it like a manufacturing supply chain.

Sramana: So you created the notion of Gravitant in 2010?

Mohammed Farooq: I launched Gravitant as a consulting company in 2005. I was working as a CTO consultant to the state for seven years.

Sramana: During the period you were working as a consulting company, was the State of Texas your only client?

Mohammed Farooq: I had some other clients as well, although the State of Texas was the predominant client. We had IBM as well, who we picked up as a client in 2008.

Sramana: What were you doing for the State of Texas during that period?

Mohammed Farooq: I was doing three things. First, I worked on a service delivery model for healthcare for the entire state. We were supporting 6 million clients. We were transforming the way healthcare worked. Take eligibility determination enrollment as an example. We had to figure out how to take that from a face-to-face model with 15,000 case workers doing intake of applications to a multi-channel model where that could be accomplished via the web, mail, or a contact center. I spent a lot of time transforming the way healthcare was delivered in Texas.

Behind that was the challenge of operating an efficient IT delivery model that enables healthcare. You really have to change the complete health IT entirely, from eligibility to enrollment to payment. We had to know the outcome of every dollar spent on healthcare. We had to change IT completely to deliver that new model.

Second, I took Texas State IT and transformed it into a shared services model. We had 76 data centers and consolidated that to one data center. We put a managed portfolio application on top of that to enable operations in the shared service model. The goal was to reduce IT costs and increase delivery.

The third project was figuring out how governance takes hold in a very proactive way for CFOs and CIOs in the State of Texas. They were not able to make decisions and control such large assets with their existing business models. They had a $6 billion dollar operation. I put together a governance framework that I called Performance Management and Governance and built systems and processes to manage the large IT supply chain.

This segment is part 3 in the series : Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq
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