Editor’s Corner: Sudip Banerjee, Larsen &Toubro Infotech Ltd | Article

Sudip Banerjee is the CEO of L&T Infotech, the wholly-owned subsidiary of $7 billion Larsen & Toubro LTD, India’s largest technology-driven engineering organization. Last year NASSCOM rated L&T Infotech one of the 10 top software and services exporters. Banerjee, a member of the founding team at Wipro, reminisces about the early days, explains why he still believes India is the number one offshore location today, and shares what he learned from the life of India’s past president.

Q: You were a member of the founding team at Wipro. Tell me about those early pioneering days.
A:
I joined Wipro in 1983 to sell computer systems; I left 25 years later. There was no outsourcing back then. In the early 1990s I transferred into the outsourcing business. Our team built Wipro into the company it is today.

Q: Being a pioneer is challenging, to say the least. How did the founding team handle the risk?
A:
We didn’t know if we would succeed. Most of our university classmates decided to work overseas. We took a much more difficult route. But we knew we wanted to build something new ourselves. For us it was a matter of passion and pride. We saw other people being successful entrepreneurs. We said to ourselves: If they can do it, so can we!

Q: What was the biggest challenge?
A:
We knew our challenge was to prove India could be an outsourcing destination. How do you prove you can be a trusted partner like the established firms like Accenture and EDS? It was our job to demonstrate an offshore model can work. We had to show that working long distance was possible and cost-effective.

Q: How did you overcome the objections?
A:
We knew it would be tough. We didn’t have any money to spend. We couldn’t afford to attend trade shows. We flew coach to the United States, rented a hotel room, and randomly called people. Only one in 10 people bothered to return our calls. It was very hard.

Q: How long were you going to try before giving up?
A:
I gave myself five years. If it didn’t work, I’d decided I’d find another job.

Q: What were some of the early barriers?
A:
Telecom was the biggest. We had to show the buyers could hear us. People weren’t convinced of the simplest things.

Q: Why do you believe India was a good offshore destination back then?
A:
First, our high-quality English speakers. English is the linga franca of international business, so we knew we would have an advantage. Second, India produces 400,000 engineers and 150,000 science graduates every year. Last year the United States graduated just 60,000 engineers. India has the talent to scale up. India also has a large pool of project managers.

Q: What was the tipping point?
A:
Our big breakthrough came when GE became our customer. The manufacturer wanted to find partners in India. Everyone on both sides pitched in to make the deal happen.

Q: Why did you leave?
A:
My work at Wipro was finished. I had an interesting run. I helped grow the company. Now it’s a huge engine that can grow on its own. Today it doesn’t need a major contribution from people at the top.

I like to take on new challenges. L&T Infotech presents a new challenge for me. However, at 48, this is the last challenge I want to take on!

Q: Today it seems almost every country on the planet wants to get into outsourcing. How will India fare with the new competition?
A:
Still very well. Today, we have a reputation. Everyone considers India the most appropriate location for IT outsourcing. However, I believe companies will always look to other locations for risk reasons. India will be the prime offshoring location with another location as secondary.

Q: What about China?
A:
China is the only country that can match us in size and scale. But China doesn’t have the English language capability or the same laws. We also have a large pool of project managers. So India is well ahead.

Q: Does India have any challenges at the moment?
A:
Yes, we have several challenges. First is the global economic meltdown. Our customers have been affected. I think the next two years will be a difficult time for the outsourcing industry. The growth rates Indian suppliers had gotten used to won’t happen.

Second is education. India has to ensure the quality of its college graduates. We also have to upgrade the quality of our teachers and our labs.

Third, our small entrepreneurial companies have become really large. We have to protect and practice the things that made us successful:

  • Good leadership
  • Quality management
  • Great processes

I predict the big companies will continue to grow and thrive if they remain customer focused.

Q: Do mid-sized outsourcing suppliers in India have different challenges?
A:
We have to come up with a way to differentiate ourselves. We have to develop capabilities that distinguish us from our competitors. And then we have to deliver even better. But we do have an advantage, too. Our customers want to add a mid-size company to their supplier list because they find the larger suppliers are unable to give them the attention they want. We can be their mid-sized provider.

Q: What about start-ups?
A:
They have to differentiate too. They have to have a unique solution that solves a big problem. If they don’t, they will be overlooked.

Q: What is L&T’s differentiator?
A:
We came from business and found our way to IT. We have strong domain expertise in financial services, manufacturing, and energy petrochemicals. Our parent company is known for engineering and construction. It builds refineries and petrochemical plants. In fact, the engineers — both mechanical and electrical — are now a large part of the IT company. Few IT companies have that capability.

Second, specific assets are our crown jewels. One is ERP. We are a global services partner with SAP. Given our corporate history, we have people with strong experience in implementation of both SAP and JD Edwards.

Third, we pay a lot of attention to our customers. We have 150 customers and only want that number. Our customers have longstanding, deep relationships with the parent company as well.

Q: Are there other ways the parent company helps Infotech?
A:
Our parent has very deep pockets. We can survive difficult economic times like we have now. They are also a great source of marketing leads. We often tag along to provide the IT solution.

Q: Indian companies are known for their growth. What are your plans in the next 24 months?
A:
We do want to grow our business. Our revenues this year will total about US$500 million. We want to grow to $1 billion in three years. We also have plans to list L&T Infotech as a separate company.

Q: How do you plan on growing?
A:
We hope to have organic growth. We also plan to pick up some intellectual assets by buying other companies.

Q: Do you plan on adding services?
A:
Oh yes. We want to build up our offerings to fill in the gaps. For example, we want to add infrastructure management and testing. Even BPO. We want to become an end-to-end IT services company.

Q: Was Wipro your first job in the industry?
A:
No. My first job was selling computer systems for HCL.

Q: Please tell me about your family:
A:
I am married and have a son, 19, who lives in the UK, attending a university.

Q: Where did you go to school?
A:
I studied economics as an undergraduate at Delhi University and got an MBA from the AIMA Delhi.

Q: What’s your favorite book?
A:
Wings of Fire An Autobiography of APJ Abdul Kalam, the past president of India. He’s one of my heroes. I found the book very inspirational. When I read, I want to read books that have nothing to do with the IT world.

Q: Do you have any mentors?
A:
The chairman of Wipro, Azim Premji. I believe the IT world will always remember him as a visionary and a great leader. He taught me humility and he helped me sharpen my business acumen. The other is the chairman of MindTree, Ashok Soota. He was my long-term boss at Wipro. He taught me the IT business.

Q: Who was the most influential person in your life?
A:
I really admire three people: Nelson Mandela, Yassir Arafat, and APJ Abdul Kalam. I can identify with people who had to struggle to achieve their dreams. They sacrificed for their cause and stuck to their principles. They were great role models in the early days.

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