'To globalise your business, you must diversify often'

At the India-European Union business summit organised by the Confederation of Indian Industry in Lisbon, Portugal, a select group of businesspeople were invited to make statements in the presence of Prime Minister Atal Bihari Vajpayee. Among the select few was India-born Skanda Kumar, global business development director for banking and financial services, Origin BV, a Philips group company that specialises in systems integration, IT consulting and services, and is based in the Netherlands.

He stunned the audience with his disclosure that when Origin was started four years back, it had about 70 employees. Now it has upwards of 20,000 worldwide, thanks to the pro-business policies of countries like India.

Kumar held senior positions at JP Morgan, Bear Sterns, Bankers Trust International, EDS and Sybase as executive director covering trading, technology and operations. He has 16 years international experience in banking and financial services and holds a first class honours degree in computer science and post-graduate degree in statistics from the University of London. He is a fellow of the Royal Statistical Society of Great Britain. Kumar has non-executive directorship in several multi-national companies and is an advisor on technology matters to the Financial Times of London.

He is also a venture capitalist, but keeps a low profile. He admits to keeping in touch on a daily basis with people such as Ramalinga Raju, chairman, Satyam Computer Services, and refuses to put a figure on his net worth. "I'm doing ok and do not wish to scare the likes of Azim Premjis, Narayana Murthys and Ramalinga Rajus," he says with a half-smile.

What he does reveal are his big plans for India, and Indian information technology professionals in particular. "I'm setting up a venture. And I shall offer US-level salaries for Indians in India." In the pipeline is an advertising blitz on satellite and cable television channels and other mass media about his company. "I travel a lot and during my next visit to India, I shall finalise the finer details." Kumar spoke to Associate Editor Y Siva Sankar on the sidelines of the first ever Indo-EU business summit in Lisbon.

On his plans for India:

We are bringing a lot of Indian scientists all over the world. If tomorrow I can get another 500, I would go for it.

On why Indian infotech professionals enjoy demand on the global job market:

Skills in India are extremely valuable, especially in state-of-the-art technologies.

Today, wherever in the world you go, when you are an Indian, with Indian blood, and an Indian image, (and if you) represent the technology business, you have already sold 50 per cent of the business.

On the special skills/abilities of Indian professionals:

I think being Indian definitely brings you flavour. There is a large pool of software engineers available. And 99.9 per cent of the engineers we have are ones who have never done projects which are out of order.

Most of the quality remains perfectly in order for companies to come back and give you work on a renewed basis. So definitely they know what they are doing. Their standard of education is strong, the selection criteria for entrance into universities is high and their command over the English language is probably a key factor… all sorts of day-to-day issues can be done in a professional way.

A very important thing, as an Indian I should share with you, is that Indians can work with anybody in the world, whether it is the British or the French or the Dutch or the German or the Singaporeans or the Australians. We have no problem in taking orders from them, listening to them, giving value for money.

On what Indian infotech entrepreneurs/companies should do to excel at the global level:

To globalise your business, you must diversify often. Most large Indian technology companies are limited to software engineering. And that is a problem for them to grow internationally.

There are two elements to this: If you were to write a large contract for software development in India beyond, let's say, $ 10 million apiece, there are not many companies out there in the world who would trust a local player to underwrite that contract or risk. So always there is another large international company like HP or IBM who take the front-end risk and then outsource to achieve the contract and make a huge profit.

Companies in India do not really have a lot of stretch in their products. They clearly focus on software engineering. Of course, they are excellent at what they are doing. But they are also going to add more value into the new, coming Internet processes and build software in a very sophisticated fashion because that is their bread and butter. There is not enough money in it.

When there is not enough money in it, then you can't go global. To have more money from technology businesses, we should look beyond software engineering, we should look at infrastructure level businesses.

It's not possible for multinationals to leave a few machines in a cage and then not worry about that. They need to have the usual hygiene and new processes in place to make sure their business is risk-free from the technology-risk point. There is always a price tag that they will pay out of their business.

I am advising a lot of Indian companies to enhance their offerings beyond software engineering. They listen to me in the sense that they also know there is a problem. But then for creating an infrastructure expertise, investments are pretty high. Intellectual property rights, tools, know-how, training cost millions of dollars.

On why Indian companies should go up the value chain to systems development, beyond software engineering:

Sixty per cent of our business employees in management are Indians. It's a matter of training. It is either applications development or systems development. What I am saying is: Why don't you emphasise a little more on systems development? Because, that's where all the money is. application development is pretty small as you can see from the revenues of Satyam, Wipro, Tata and Infosys -- they are under $ 200 million a year.

Origin's projects could sometimes be well close to a billion dollars a project. Because you sort of take a business duration of some ten years, and companies outsource. In application development, it will be on a project-by-project basis. So if you finish a project, you have to go and ask them for more projects. So the business has some brakes. Continuity and other factors are affected, constraining the growth of the business.

On why Indian professionals should not shy away from making their pot of gold:

Firstly, in whatever you do, in whatever industry you are working, if you have gained expertise and momentum to deliver quality service and value to the customer who pays your pay cheque, there is nothing wrong in taking a small piece of that pie. Like in the US, you know, when I was first working in California as a programmer, I was earning 70, 80 dollars in the early 1980s. My boss would tell me that if I make six dollars, I will give you fifty cents.

Historically, the corporate culture in India has sort of pushed down the workforce. They never claimed to have a wealth creation approach. I think it is shifting. Because if we don't recognise that everybody needs money, everybody has to make a living, eventually they tend to go away from either India or to another organisation to try and maximise the short lifespan everybody cherishes to have in this world.

My advice is, maximise every dollar, every rupee you can. And keep it for the rainy day because it is important. At the end of the day, you are adding value to your organisation, you are adding value to the business and you are adding value to the client. Try and capitalise as much as you can.

On how he manages his wealth:

I have investments in various countries where I try to maximise my income through greater tax-breaks and tax advantages in investments.

I collect homes as a hobby. I also invest a lot of money in properties. If I have spare capital, I give a lot of my wealth to relatives and family members to let them come up and do something in life.

On his family and how he funds ventures promoted by them and others:

I have three brothers, two are in the States, one in Canada. They also want to start businesses. So sometimes I do provide capital. They may not be able to ask the banks to quite easily fund them. Sometimes I do invest in new initiatives that I believe will make money. For example, the new dot-com companies. So somehow there will be enough space….

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