Economic Times: Head start

Dr Ajay Kela, MD and COO,  Symphony Services

15 Jul 2008, 0325 hrs IST, Priya C Nair, ET Bureau

My reason for success...

is my team. The team includes all the employees of the company. I always immerse myself with the team and truly enjoy the camaraderie associated with chasing big, audacious goals and motivating each other to achieve those goals along the way, not forgetting to have fun as well.

I admire....

passion for winning, thinking out-of-the-box, never heeding to ‘it has not been done before’ attitude and camaraderie that would never leave anyone behind. I can do without a mindset that is dragged down by ‘it has never been done before’ and pointing fingers.

I look for...

people with intense desire to succeed, a ‘can do’ attitude and open-hearted willingness to help colleagues, apart from the technical skills. My people are passionate about what they do, cherish success and stretched goals, and they relish the teams they are part of.

My goal....

is to make my job redundant by having multiple subordinates capable of taking over. The juice behind my decisions is substantive value to all stakeholders in the framework of highest integrity and honesty.

Employer brand is critical...

in this competitive environment. Best brands are built by the biggest brand ambassadors, the employees of the company.

At the end of the day, what I value most...

is grooming leaders and building a value focused organisation through repeated ‘wins’ that translate into unprecedented success and number one status in the game.

Delegating work to subordinates...

is the only way to build an organisation of leaders and build a scalable organisation. Acquiring responsibility should be based on meritocracy, demonstrated leadership skills and willingness to put others first.

Businessworld: No More Captivating

GUEST COLUMN
Reasons why captive units of software firms are floundering can be traced to their parent companies

AJAY KELA
11 July 2008

It is hard enough to build software products two buildings apart, let alone when your teams are continents apart. Nascent captives are learning this the hard way. Today, barely 4-5 years after more than 600 companies set up captives in India, the warts are starting to show. But before we try to understand what is killing subscale captives, let’s try and understand what drove the idea of captives.

In early 2000, after the dot-com bust, software companies, with escalated cost structures and reduced revenue streams, decided to offshore for strengthening their financials. Venture capitalists encouraged the trend within their portfolio. But these companies experienced an enormous nervousness about giving their crown jewels and revenue-generating activity to an offshored outsourced partner. So, they did the next best thing: they set up offshore captives, believing that their in-house practices combined with labour arbitrage would produce the cost benefits. But something has obviously gone wrong. A Forrester study says that 60 per cent of captive centres fail to meet expectations. Not surprisingly, many captives are reconsidering their strategy.

Not all captives flounder. Those that look at offshore centres as strategic and give time to scale have succeeded. The truth is that companies such as Motorola, Texas Instruments, Adobe and Oracle gave themselves 10- 15 years to succeed, during which they underwent multiple significant product release cycles, giving them a chance to achieve process and operations maturity through hands-on experience. Contrast this with companies that want to succeed in 3-4 years’ time. Given that a typical product release cycle is long, is it realistic to expect any kind of process hardening? In young captives, productivity usually is a fraction of onshore productivity leading to increasing impatience.

Meanwhile, young captives begin to feel the heat of other factors. Process immaturity, fear of the unknown and IP (intellectual property) concerns lead to tactical thinking, and safe and uninteresting work gets offshored. My observation has been that this tactical thinking and second-class work results in building an organisation where employees feel like ‘second-class citizens’. You can see where a situation like this is headed: micro management becomes a way of life and the employees in the captive facility begin to lose interest leading to more trouble, chief amongst which is dealing with plunging morale and motivation, a lack of ownership of the products and negligible innovation — the bread and butter for any software company.

It’s a domino effect from here — attrition and senior management churn due to increasing frustration leading to a vicious cycle of product delays, higher investments in HR and retention programmes; the leadership spends an inordinate amount of time and energy on recovery and travel; and communication costs escalate. Also, during early years, support processes ranging from facility, IT, HR, finance, legal and compliance drain captive focus from their core mission of product engineering. Finally, since captives are cost centres and do not necessarily have a ‘profit and loss’ mindset, they continue to raise salaries to retain talent.

Many of these enterprises are looking for ways out. One of the more obvious options is handing over their subscale captive to seasoned service providers. The primary goal is to preserve the investment in captive employees, while increasing the productivity and effectiveness of the team. They achieve this by combining their expertise in working with hundreds of other companies with the inherited experience of the best within captive employees, which are then dedicated back to the client organisation.

I believe this is the right path to take for subscale captives with no near-term plan to scale to 500 people or beyond. Service providers who ship one product each day across their client base have their processes honed through execution and invest heavily in developing best practices and technologies through centres of excellence. All this leads to creating an offshore centre that is on a par on productivity, quality, ownership and innovation with parent organisations.

On the cost side, using a partner can also provide a critical pay-as-you-go opportunity. You don’t have to set up a facility for 200, if in the first 6-12 months your head count is going to be just 100. Next-gen companies have begun to find experienced partners to manage their development and, to me, this spells a serious trend that is going to shape the future.

Express Computer: Failure -- the best teacher

 He has the optimal mix of experience and cultural know-how for his role. Ajay Kela, COO and MD, Symphony Services, Corp, is equipped to lead the business expansion worldwide. Reports Nikita Upadhyay

Ajay Kela comes from a lower middle-class family inhabiting in the suburbs of Mumbai. His father was a cashier in a government bank and his mother was a home-maker. His father was not highly educated but would spend a huge amount of his income on Kela’s school fees. His parents’ passion for education and their sacrifices for the same became his biggest inspiration.


Stepping stone

Most of his education was done in Mumbai. He did his bachelors from IIT-Mumbai. Subsequently, he went to the US in 1981 to do his PhD in Computer Graphics from the University of Rochester. His affinity towards maths and engineering seemed like a natural choice.

Repeating the third grade because of his poor performance was a transformational event in his life. “The shock of being left behind while my friends moved on was both embarrassing and saddening; not to forget the financial burden it had on my family. This made me not want to repeat the experience ever again. Subsequently, throughout school I was amongst the toppers. Failure was the best thing that happened to me early in life,” Kela recapitulated.

The journey

His first job in 1986 was with GE Corporate R&D Center in Schenectady, NY. After completing PhD, his mind was geared towards research and publications; however, his heart was in software product development. He eventually followed the mind but the work there did not ignite his internal passions.

In 1989, he pursed his passion to build software products for large scale commercial organizations and joined Autodesk in California. He started as a line manager and within six years became the VP of AutoCAD, a division of Autodesk, and steered it to high success. Post Autodesk, Kela worked as an Entrepreneur in Residence (EIR) with NEA, a Silicon Valley venture capital. “During the EIR stint with NEA, I visited India in 2003 and met Dr. Romesh Wadhwani, Chairman of Symphony Services. I was enamored by their vision which motivated me to make a dramatic and swift decision to join them. I could foresee that the dotcom bust would create a market for more efficient R&D activity,” explained Kela.

His degree at IIT and then the subsequent PhD degree trained him to be a good engineer but not a good business manager which posed as a challenge initially.

Shouldering responsibilities

His strive is to acquire the number one status for his company in its particular genre. Being the key executive and having given the best at Autodesk and consistently striving at Symphony are his biggest achievements. “The greatest motivation comes from fuelling a passion within each employee that drives them to excel in their responsibility and helps them contribute towards the success of the organization. Associates describe me as someone with a silent brewing passion,” stated Kela. Once he is passionate about an idea, painting a vision and the path to get there follows naturally. Being a good team leader, he thus forms a team that believes in the vision and imbibes the drive to achieve it.

He encourages out-of-the-box thinking. Also, for engineers, physical presence in office is typically not necessary. As long as commitments are met, it doesn’t matter where employees work from. He readily encourages the concept of ‘work from home,’ if the employee so desires. Similarly, engaging employees at the grass-root level in strategic and business decisions is his preferred modus operandi as this brings in the benefit of a total buy-in and generates a feeling of ownership within the employees.

His biggest dream for the company is to create an organization where individuals would swear by the company and cherish their time spent. This typically comes from providing individuals an environment to excel, treating them as equals, conferring them with utmost respect and operating at the highest level of integrity. His personal dream is to create such a company and leave behind a legacy.

Close to heart

Kela loves nature. His family vacations are typically in the mountains—hiking. He is particular about his morning workouts and exercises religiously four to five times a week. His family gatherings are usually associated with singing and dancing where he actively participates.

According to him, the greatest quality in his wife is that she forgets the negatives of life very quickly. His two kids are aware of their responsibilities and have a good balance between sports, cultural activities and academics. When they were new additions to the family, Kela took two years off to spend time with them, which have been the most memorable years of his life.

Kela encourages and drives non-traditional and non-conforming thinking within his kids. “In India, education is a strong focus. I believe children under 15 are naturally inclined and passionate about non-academics such as sports, drama, dance, etc. After 15, they tend to intrinsically draw themselves towards academics. I encourage my kids to pursue their natural instincts at their age,” opined Kela.

Kela believes that sports is a great teacher in life. To excel in any sport usually takes many failures. This repeated failure is a great teacher and drives one to excellence, he claimed.

New York Times: Indian Find They Can Go Home Again

By SARITHA RAI
Published: December 26, 2005

BANGALORE, India - Standing amid the rolling lawns outside his four-bedroom villa, Ajay Kela pondered his street in the community of Palm Meadows. One of his neighbors recently returned to India from Cupertino, Calif., to run a technology start-up funded by the venture capital firm Kleiner, Perkins, Caufield & Byers.

Ajay Kela with his son, Ankur, and daughter, Payal. The family returned to India from California.

Across the street from Mr. Kela is another Indian executive, this one from Fremont, Calif., who works with the outsourcing firm Infosys Technologies. On the other side is the top executive of Cisco Systems in India, who returned here after decades in the Bay Area and New York.

Also on the block is a returnee from the United Kingdom, who heads the technology operations of Deutsche Bank.

Mr. Kela's neighborhood is just a small sample of a reverse brain drain benefiting India. The gated community of Palm Meadows in the Whitefield suburbs, and many others in the vicinity, with names like Ozone and Lake Vista, are full of Indians who were educated in and worked in the United States and Europe, but who have been lured home by the surging Indian economy and its buoyant technology industry.

"Nothing unusual about this lane at all," said Mr. Kela, 48, who moved from Foster City, Calif., to Palm Meadows last year and is president of the outsourcing firm Symphony Services, which is based in Palo Alto, Calif.

Nasscom, a trade group of Indian outsourcing companies, estimates that 30,000 technology professionals have moved back in the last 18 months. Bangalore, Hyderabad and the suburbs of Delhi are becoming magnets for an influx of Indians, who are the top-earning ethnic group in the United States. These cities, with their Western-style work environment, generous paychecks and quick career jumps, offer the returnees what, until now, they could only get in places like Palo Alto and Boston.

And now they offer something else: a housing boom. Homes have tripled in value in Palm Meadows over the last 12 months, and rents have quadrupled. "Expatriates are returning because India is hot," said Nandan Nilekani, chief executive of Infosys Technologies, India's second-largest outsourcing firm, which recruited 25 returnees from top American schools for its 100-seat summer internship this year. "There is an increasing feeling that significant action in the technology industry is moving to India," he said.

While most returnees are first-generation expatriates, second-generation Indians living in the United States are also returning, said Lori Blackman, a recruitment consultant in Dallas. "Among them I sense an altruistic pull to return to India to help build their home country to a greater power than the country had ever hoped to achieve," she said.

But the trend is raising fears among American specialists that it could deplete the United States of scientific talent and blunt its edge in innovation. "The United States will miss the talents of people of Indian origin who return to India," said Brink Lindsey, vice president for research at the Cato Institute in Washington, adding, that the moves could create greater possibilities for trade between the two countries.

For many returnees, the newly challenging work environment in India has tied in neatly with personal reasons for returning, such as raising their children in Indian culture and caring for aging parents.

"When I left India 25 years ago, everybody was headed to the United States," said Mr. Kela, who pursued a Ph.D. at the University of Rochester and stayed two decades, working for companies like General Electric and AutoDesk. For India's best and brightest, a technology or engineering career was an irresistible draw to the United States, even until four or five years ago.

"But now they all want to get on the plane home," said Mr. Kela, who returned with his wife and two children.

Once a regular at Silicon Valley job fairs, trying to woo Indians back home, Mr. Kela no longer needs to sell India. He receives 10 résumés a month from people with decades of work experience in the United States yearning to relocate.

With globalization, many Americans of Indian origin in the high-technology industry are looking at India as a "career-enhancing move," said Anuradha Parthasarathy, the chief executive of Global Executive Talent, a search firm in Menlo Park, Calif., who is swamped by such job-seekers. Many technology companies - multinationals and Indian outsourcing firms as well as start-ups - are eager to hire returnees with Western managerial experience or technology specialization.

Companies based in the United States, like ipValue, a company in Palo Alto that commercializes intellectual assets for large technology companies like British Telecom and the Xerox Corporation, are helping accelerate the trend. When ipValue recently decided to expand its operations, it chose to do so in India. "We are really betting on the Indian diaspora returning home," said Vincent Pluvinage, its chief executive. The firm just hired a top executive from Oracle to head its Indian operations and expects a third of its 20-member team in India to consist of returnees by January 2006.


The passage back is no longer an ordeal, because much has changed in India. Whereas watching a movie in a dingy hall was once a weekend high point, now fancy multiplexes, bowling alleys and shopping malls offer entertainment, and pizzerias and cafes are ubiquitous at street corners. Indians who once could choose between only two car models and fly a single airline find they have returned to a profusion of choices.

Even as the lifestyle gaps between India and the West have narrowed rapidly, salary differences at top executive levels have virtually disappeared. Annual pay packages of a half-million dollars are common in Bangalore, but even for those taking a pay cut to return home, the lower cost of living balances smaller paychecks. Starting salaries for engineers are about $12,000 in India, versus $60,000 in Silicon Valley.

But relocating is not without its challenges, as Venki Sundaresan, 38, discovered a year ago when, after 15 years abroad, he moved to India with his wife and twin daughters to be the information technology director of Cypress Semiconductor.

In atypical fashion, Mr. Sundaresan scorned the "soft landing" that many returning Indians seek by living in gated communities. Instead, to have the "true Indian experience," the family opted to live in the teeming Indiranagar neighborhood. For his 5-year-old twins, he spurned upmarket international schools popular with other returnees and enrolled them in a neighborhood school. Mr. Sundaresan owns an Indian-made car, a Maruti Baleno.

"We've already driven the Mercedes and the BMW in the United States," he said. "What is the point of dodging around Bangalore's potholes in a limo?"

Living in Palm Meadows, Mr. Kela and his neighbor Sanjay Swamy, 41, who heads the Indian operations of Ketera Technologies, face very little transition anxiety. Mr. Swamy bought and moved into a Palm Meadows villa with his wife, Tulsi, a financial consultant, and 8-year-old son, Ashwin.

The communities buffer returnees from Bangalore's bumper-to-bumper traffic, unpaved sidewalks and swarming neighborhoods. Mr. Kela; his 9-year-old daughter, Payal; and 6-year-old son, Ankur, enjoy riding bikes on weekends, and they often play cricket, which Mr. Kela is passionate about. His daughter is learning the classical Indian dances of Kathak and Bharatanatyam. For Halloween this year, Mr. Kela led his children on a trick-or-treat walk.

Mr. Kela says he misses the freedom to drive anywhere or go on long hikes. Yet, life is comfortable, with two live-in maids, a full-time driver and another on call, all of whom are "outrageously affordable."

His neighbor Mr. Swamy is immersed in building a Silicon Valley-style team in Bangalore, but with some local adjustments. When he learned that the company routinely received calls from prospective fathers-in-law of employees, asking to verify their ages, titles and salary details, Mr. Swamy wrote a memo titled "HR Policy on Disclosing Employee Information to Prospective Fathers-in-Law."

"While I want to be entirely supportive of ensuring that our confidentiality agreement does not result in your missing out on the spouse of your dreams," Mr. Swamy said, "I don't want competitors to use this as a ploy to get at sensitive information."

Businessworld: Our Own Silicon Valley

GUEST COLUMN

Bangalore may become East’s silicon valley, thanks to rapid expansion in software ecosystems

AJAY KELA

16 Jan 2009

Historically, the software product industry has been dominated by Silicon Valley in the US. A few companies in Europe, too — such as SAP — have seen outstanding success. In comparison, the Indian software industry is nascent; and Indian companies, except for the odd few, are crawling babies. But the course of history is set for a remarkable change. One of the predictions I have is that Bangalore will emerge as the Silicon Valley of the East by 2015.

Dramatic as this may sound, the signs of evolution in the software product ecosystem are all around us. This is evident on two fronts. First, nascent software product companies are mushrooming in India. And second, established software product companies around the world are increasingly outsourcing their product development activities to India, thus changing the ecosystem.

There are four spokes in the ecosystem for software product development to flourish: entrepreneurs, software engineering talent, availability of capital, and access to markets. Recently, product services companies such as Symphony Services are also acting as catalysts to the software product ecosystem — a fact that is not only accelerating and strengthening the first two spokes but, also providing a framework for software product companies worldwide to raise productivity, accelerate time to market, increase quality, and provide the best talent through global access to such talent.

To begin with, it is entrepreneurship that is helping boot the ecosystem. With the Indian economy vibrant, Indians returning home from overseas are increasingly setting up their own companies in India. Add to it the fact that the new generation of Indians are more entrepreneurial by nature. Helping them along are organisations such as The Indus Entrepreneurs (TiE), the National Entrepreneurship Network (NEN) and Nasscom. We are reaching the tipping point and now have a robust entrepreneurial ecosystem forging this industry forward.

Entrepreneurs need software product engineering talent. The good news for them is that an army of engineers is rapidly being groomed. Traditionally, Indian IT industry has focused on building software for internal use. If a Bank of America wanted internal efficiency in its operations, it would specify the product functionally and turn to an Indian service provider to build the software product. Thirty years and a $40-billion industry have honed engineering skills yet this has been limited to catering to a small internal user-base. That was the first stepping stone. Post the dotcom bust of early 2000, software product companies that built commercial grade products used by millions of end-users have en masse moved their product development activities to India. Result? Driving down Outer Ring Road in Bangalore gives you the feel of Highway 101 in Silicon Valley. This is accelerating the development of the second spoke — building an army of software product engineers.

There is something else that has begun to lend Bangalore the flavour of Silicon Valley; many of the Valley’s venture capitalists are setting up shop here, some with $100-million funds focused on India. Intel Capital, Sequoia and NEA Indo-US Venture, among others, have now created India specific funds. Along with the capital, they too are sending their investment experts to mentor the entrepreneurs and guide their companies. This is yet another harbinger of things to come in the software product space in India.

Finally, access to markets is critical — and as far as India is concerned, this is the weakest spoke in the ecosystem. For Indian companies, US and European markets will continue to dominate in the short term. In a bid to reach these markets, Indian firms will offshore their sales and marketing functions, a model that is proving successful. In parallel, the Indian market is evolving — even today the retail and telecom space in this part of the world, along with China, Japan and Korea, are bringing vast opportunities for foreign software product companies.

It is evident that the software product ecosystem is expanding. Talent is scaling up thanks to software product offshoring; capital is available to the point where even high net-worth individuals are turning into investors, and markets in this region are maturing. Would it be risky to predict that by 2015 Bangalore will become the Silicon Valley of the East? You take a guess!

CIO Magazine: Firing up Innovation:

Ajay Kela
Interviewed By :Kanika Goswami
March 2008

The ashes of the dotcom bust became fertile ground for a new segment of technology companies: software development enterprises that provide tools and software for international giants. Symphony Software Services was one such opportunity. Set up in 2002, today, it delivers more than a thousand products to customers worldwide. Ajay Kela, the MD and COO of India operations, says that the technological innovations his engineers bring to the table are pivotal to the existence of many of his clients. At Symphony, IT breathes life into the innovation process and is instrumental in keeping innovators on the cutting-edge. As the industry moves into newer, more profitable areas, Kela believes that innovation must run deep and wide -- both in and outside of IT.

How does Symphony use IT and where is it heading as a company

Ajay Kela: After the dotcom bust, huge amounts of fiber deployments and software that couldn't be paid for, drove India's BPO industry. Today, we believe that software development will go the way of manufacturing. A few decades ago, manufacturing was dominated by companies in the US and Europe. Then, components started going offshore and today, an IBM laptop is just an assemblage of components from different parts of the world.

The same thing is happening to software development. Most companies that get funding in the Valley do not have the resources to do their own engineering. They are major outsourcers. Twenty-five, out of a 100, of our clients are early-stage companies for which we form the engineering base. We are responsible for their entire product development -- right from the whiteboard stage all the way to shipping. In five to 10 years, all engineering will be completely outsourced. It's a very high-end market and India is moving up in it. Symphony operates in this high-end technology market. We do IT services for internal applications, and for BPOs -- we are their revenue generating component.

In our industry, IT is very crucial due mainly to three things. The first is IP protection. We own client IP, or at least have a very broad access to it. IT helps secure that access to keep compliance and anxiety levels in control. Collaboration is another, because our work is so dynamic that our teams need to collaborate all the time with teams at another end. I'm not only taking about project managers -- we have 500 people for one of our clients sitting here and they all have to interact with the client. There's a huge need for collaboration.

The third thing is visibility. Because our clients send their revenue-generating activities to us here, an enormous nervousness builds up. These companies cannot afford a mess up here, so we have create visibility for their CEOs. Given the amount of concern our clients have, we have to provide complete transparency. Since they cannot keep coming here, IT helps. We have to rely heavily on technology.

What sort of compliance issues do you face and how do you deal with them

There are massive compliance issues, all tied to access to IT. Most are IP-related. To protect that IP we have ISO27000 certification that enables us to get the best global best practices to be implemented in the organization. It provides mass information access to our client -- access to very sensitive information, the framework has a security provision, so it's not violated.

You are entering into an agreement with Optimal Engineering. How will this benefit Symphony

Our business is in three areas, first is independent software vendors (ISVs), like Autodesk or Oracle. Then there is a second segment around e-commerce companies where software is mission critical. The third market we entered into recently is embedded software. Today, hardware devices are all being commoditized and software is the differentiator. Optimal had a very strong practice in the embedded space. In their segment they have a lot of expertise; it will be a strong relationship.

Symphony promises to create value via innovation, collaboration and operational excellence. How does IT help

Innovation is the bread and butter of our clients. The innovation our employees create keeps the companies of our customers in business. If our people fail to innovate, the companies our clients run will collapse. Innovative thinking needs exposure and this is where IT helps.

Collaboration is also extremely core to our business. Our teams seldom work in isolation; our work is a continuously interactive process. Since our staff has to interact with other teams -- and each other -- collaboration is a key component to ensure quality deliveries. E-mail is okay, chat is better, but face-to-face is the best. Although we have exchange programs, face-to-face is not a scalable model. So we turned to IT to create a face-to-face from the desktop. Where operational excellence is concerned -- no company can bring its products to the market if they are not actively using IT to optimize costs.

Today, we have been very successful as a service provider. But it is hard to do software development from two buildings apart, let alone being separated by thousands of miles. You can only get that kind of expertise through knowledge management systems and best practices.

Today, we produce like a factory. On an average, a software company ships one product release a year. Microsoft, for example, has one new release every four years -- we had 1,000 releases this year. We have so many clients, many of whom are early-stage companies that cannot wait and e-commerce clients who update their websites on a weekly basis that we need to be much faster and more voluminous in our production. From an organizational perspective, I can safely say that we are far better than many others.

Our organizational excellence is helping us break new business ground. We have an increasing amount of business from captives, who are asking us to handle their operations. Today, we have about 1,000 people who have given up their captives to us.

In an industry dogged by attrition, how do you tackle staffing and other HR challenges

In our industry there is mostly low-end work doing internal applications. Once you've implemented a SAP or an Oracle application for one client, doing just that can become monotonous. Senior people tend to get bored and begin to question the value they bring. Club this with the late hours people keep at BPOs, irate customers, and you have attrition rates in the range of 60 percent to 70 percent.

However, we are very fortunate that we work on some of the world's best products. If you are a software person, working on technology that is the cr''me-de-la-cr''me is encouraging. Today, we build the world's best CAD product with Autodesk, we are partners with leading ERP providers like Oracle. The top two e-commerce companies are our clients, so our employees are working on world-class products and enormous amount of satisfaction is derived from those brand names.

And from the perspective of our employees, the freedom to innovate helps. Since they have to think of new ideas, they are not replicating their work everyday. That's a key driver in our quest to keep talent here.

And because we need to stay competitive, we identity our top performers to do cutting-edge work for our clients -- about 25 percent of our people. Plus, we create a classy environment that replicates the environment of our US counterparts. We have five-star work environments including desk area that is far higher than the industry average.

We also need to have a lot more freedom. We have an open culture and have monthly beer bashes followed by dancing where even I participate. All this to create an environment where employees are free to create and innovate.

How do you use IT to tackle the HR needs of your employees

We need to eliminate irritants at work, and the best way to do that is to provide all the necessary tools on an employee's desktop. We have completely automated HR functions. The more these activities are automated, the more mind space our people will have to think. We also pushed hard for work-from-home because of time differences. Of course, our clients had issues with their IP being accessible from people's homes. So, we provided network access control protocols that limits their exposure.

What steps is Symphony taking to strengthen its disaster recovery and business continuity capabilities

Within a city we have multiple sites, so if disaster strikes, we can rapidly replicate and move on. Most IP is stored in servers worldwide. So that doesn't suffer. But if something happens to an entire city, we have presences in Bangalore, Pune, and Mumbai and we can switch over rapidly -- including shipping out our employees. We are moving into a multi-country set up so that, if say, there's a nuclear war in India, business can go on.
At the employee level, critical staffers have succession planning -- this extends to the individual level, the building level, the city level and the country level. Data is actually replicated.

Does Symphony use Open Source for development Are your clients using it

We use Open Source for many developments and at many levels. I think Open Source is being embraced today, certainly by early-stage companies and across the board, operating systems will be Linux, middleware application servers on J-Boss, and so on.

Many early-stage companies don't want to invest in commercial software. We provide full support for this aspiration and we have a center of excellence around Open Source. Whenever our clients need to find out if Open Source or Linux can work for them, they use our expertise.

What role does your CIO play, given the company's focus on innovation

Our operations can succeed only if engineers can freely innovate and the CIO is key where this is concerned. All software companies thrive and survive on the next bright new idea. For that to happen, for our engineers to innovate, they need to have access to clients as well as users. They need to get under the skin of the client. We need technology to provide that access. Examples of this include video-on-demand, chat interactions, work-from-home, knowledge management tools.

We have a program built around IT called Symphony Orchestra. We have knowledge access management on a portals and we created portal on it for our clients. This is where we store documents, provide an environment for light discussions and a search engine to look through various portals. That's also how we capture best practices.

We are also working around virtual management; this includes many-to-many chats and IPTV. Again our clients treat our employees no different from their own, so they have online meetings where they talk about their product roadmaps. We also have broadcasted meetings.The CIO is crucial to all these development and activities, and as our business expands and technology moves on, he or she will play an increasingly important role in our business processes.

Silicon India: Software Product Development: The Next Frontier for India

Ajay Kela; September 2005 Issue

 The Indian IT industry is seeing a third wave. The first wave was when India saw the emergence of domestic IT behemoths catering to global 1000 companies. Though it was a long process, the first wave signaled the arrival of Indian IT companies on the world stage. The second wave was the BPO industry.

In less than a decade India emerged as the world's first choice for BPO operations. This was also the period when software giants like Oracle, Microsoft and SAP started tinkering with low-end product development activities out of India and the more bolder ones such as Aspect Development (eventually sold for $9.1 billion to i2) that placed their entire bet on India. The latter triggered the third wave that has just begun and it's all about transitioning high-end software product development in high volume to India.

This third wave offers fabulous opportunities to the current generation of IT professionals.

Firstly, the nature of work is crème de la crème of all software work. This offers tremendous opportunity to be creative and innovative and get closer to the wide base of actual end-users. Also, since the work is directly tied to revenue generation for the company, potential rewards for widely accepted solutions are outstanding both in terms of wealth generation and self recognition. However, the best opportunity it offers young engineers today is a fabulous training ground for motivated entrepreneurs who can experience the thrill of creating software or services companies focused on such exciting work.
To capitalize on such an opportunity the IT professionals need to switch their focus from technology to domain. Only individuals that have deep domain knowledge of the space be in CRM, CAD, etc will have the background to understand and provide unique innovative solutions to business problems. Gaining domain knowledge comes through tenaciously sticking to a single field for years together than switching projects and companies every six to nine months.

Finally, to be successful in this field, Indian companies and professionals have to change their mindset. Though Indians have the right attitude and tenaciously drive for progression, what is required is a change in thinking. All these years' Indian companies built software to the specifications of their U.S. and European clients. The change in mindset requires a shift from completing tasks to taking ownership of end-user problems and striving for innovative solutions. This entails getting under the skin of the end-user and having a deep understanding of the problem they are addressing.

Software product development is the next huge wave in India. Today IT Services companies dominate the top tier but its not long before the industry will see Product focused Services Company emerge in the top tier. Software product development is going the manufacturing way. There will soon emerge the 'Flextronics' of software manufacturing out of India. The sun is on the rise in Bangalore for software product development. U.S. companies have seen this before and they always emerged stronger than ever. Few decades ago, manufacturing oriented U.S. companies capitalized on the use of efficient labor worldwide and emerged stronger for themselves and their consumers.

U.S. software companies will go the way as Dell and Cisco – market and marketing savvy and having the foresight to fully capitalize on design, innovation and production through efficient locations worldwide. India stands the best chances of enabling the U.S. software companies leverage global advantage for product innovation and engineering.

CXOToday: Ten Truths Every CEO Should Know About Captives

Ajay Kela
Delhi, Sep 18, 2008 1206 hrs IST

Globalization of R&D has been broadly embraced in the last five years. The early trend was to ship an expat manager to offshore destination to setup a Captive facility with the expectation that over time predictability and savings would come. The experience of Captives tells us this is far from the truth.

From my experience running 100 of R&D Center as a Service Provider, I wanted to share with you 10 things every CEO should know about Captives.

Rome Was Not Built in a Day: And neither are most captives. Billion dollar firms like Motorola, Texas Instruments, Oracle and Adobe showed the way to successful R&D Captives. But this does not mean everyone will or can. These companies invested 10 to 20 years in mastering their Captive operations. Do you have the luxury of time? If not, finding a partner with the right capabilities, right from the start, is a better solution. Why reinvent the wheel when you can ride on your partner's!

Beware of Consultants Bearing Reports: The gap between a consulting report and execution can be significant. Developing and honing your long-distance development processes takes time and practical experience - not advice from gurus. If you're starting from scratch, be prepared for at least 5-7 years of significant product releases before you begin to see process maturity. After all, process maturity cannot be micro-waved for use.

Don't Confuse ITO and Product Development Skills: Even though India has the most mature IT industry, R&D talent with product and domain expertise is still very rare. Drive and passion to succeed is very high in India. Capitalize on this passion to transform these engineers through extensive training and hands-on experience. Be prepared to invest significantly in training by using your home employees and management. Service Providers overcome this challenge through Training department which are tried and tested across their Clients. You may want to leverage this value add and their vast recruiting network to attract the best in the first place.

Grunt Work Leads to Unhappy Employees in India and China Too: If the parent company is going to ship second-class work to the Captive, you better get ready for some serious challenges. Second- class work often results in employees feeling like "second class citizens". The result: your offshore development team is going to quickly get de-motivated and retention will become a huge challenge. Your HR team will have to work over time, recruitment will have to get turbo charged and training will need a shot of steroids. The leadership team is not immune to the effects of declining morale. They're next. Grunt work only disgruntles! Quality work keeps quality people.

Stay off the Expat Carousel: Typical Captives are run by expats on a two to three year assignment. Since they understand the culture and ethos of the parent company, they become the obvious choice. However, this is a mistake. Expats on short assignments cannot intrinsically get passionate about building a sustainable organization. Secondly, when the leader (expat) returns back the organization falters, as the next level of managers also start looking at alternatives. Creating a leadership team that's committed to the long term is critical to success. And remember "expats" are not necessarily the "experts" in managing local challenges!

The Bane of Cost Centers: Captives are cost centers and seldom develop a P&L mindset. Expect accelerated cost escalation compared to the market because the easiest justification -- "this is the market" -- typically prevails. And Centers of Excellence become Centers of Expenses soon. Incidentally, many of the highest paying captives also have the highest employee attrition in India.

Watch Out for Unplanned Investments: Captives are designed with the end-goal in mind. Typically, first year plans are much smaller than the long term objective, but companies often struggle to even reach that objective. The problem is magnified when you plan for 300, hope to hire 100 in the first year, but often only wind up with 30. This unplanned overhead expense can cripple the Captive budget. Additionally, the effort required to manage HR, IT, Facility, Finance, Legal, Compliance, etc., drain Captive focus from their core mission of product engineering. Partners, whom you pay-as-you-go, prevent this cost escalation and are able to provide seasoned support services.

Size Matters: Forrester Research and Gartner proclaim that the scale for an effective captive is 500+ resources. If companies don't think they can approach 500 in a three year timeframe, it's not worth establishing a captive. Even if you plan to get to 500, but are starting fresh, look for a partner to setup your operations under the Build-Operate-Transfer model (BOT) to speed time to productivity while minimizing costs and risks. Look for offshore partners who guarantee cost advantages, have proven operational excellence and engineering best practices, boast brand equity and are willing to work at cultural cohesion. At least when it comes to captives, small is not necessarily beautiful, it is actually painful.

Evaluate the Hybrid Model: The dirty little secret is that few captives are truly doing it alone. Almost 50% of captives are also working with providers outsourcing 30% to 50% of their work. Partners can help with flexible capacity needs, geographic diversification, specialized functions, accelerated scaling, managing facilities and talent and, not to forget, access to the partners best practices and Centers of Excellence could directly benefit your own Captive. Remember CK Prahalad's formula for success in "The New Age of Innovaton": R = G. Resources are global and partnership is the way to go!

The Captive Trend is Reversing: A recent report by Forrester Research indicated that more than 60 percent of captive centers are struggling to achieve the anticipated performance or productivity advantages. According to Zinnov Management Consulting Pvt. Ltd. the net result is a precipitous decline in the number of new captives started in India over the past few years - from 76 in 2004 to just 15 in 2007. Further, according to Zinnov, Providers are expected to outpace the growth of captives by more than 300 percent over the next four years. In fact, Forrester posits that 10% of captives will turn over their operations to Providers. Warren Buffet said, "It is only when the tides run out, you will know who has been swimming naked!" Competitive forces and need for innovation will drive captives to leverage enormous benefit from partnering with service providers!

Conclusion: The global product engineering market has changed significantly in the past five years. What was once conventional wisdom may not hold. Today, leading analyst firms are recommending that software vendors evaluate the provider model as an effective alternative to starting or growing a captive. The precipitous drop in captive development centers being started is a telling indicator that the transition is well underway. As software companies review their global R&D strategies, they should keep in mind the factors mentioned above. If their strategy doesn't include scaling to at least 500 resources quickly, investments in establishing a local brand, measuring the effectiveness of their efforts and a hard review of the overall cost structure, they may want to give that strategy another look.