Accelerate your biz @ Virtusa

N. S. Vageesh | Updated on February 06, 2011

Mr Sumit Sood

Sumit Sood is a Punjabi who has consciously chosen to settle down in Chennai. That may make him seem like the lead character popping straight out of the Chetan Bhagat best-seller, Two States. I quiz him about this decision, since it is the rare ‘North Indian' who makes such a choice without being guided by career moves alone.

Here is his take: “I like the pace of the city. It lets you be yourself. There's not the mad rush, power play or intellectualising of other metros. When one of my friends asked me the same question while we were travelling by car, I asked my driver to switch off the engine for a moment during a traffic jam. I asked my friend if he could hear anything. He said “nothing”. I said, “That's it. In no other big city would you have seen that happen. There would have been people screaming and jostling and raising hell. There's a lot of culture and civility here.” True. After that lovely and heart-warming commercial for our beautiful metro (TN Tourism Dept — please make a note), we quickly shift gears and head straight into business.

Sumit gives me a backgrounder on his company, Virtusa, which is an IT Services company providing IT consulting, technology and outsourcing services. They started 14 years ago and operate out of Sri Lanka, and two bases in India at Hyderabad and Chennai. Sumit heads the banking and finance vertical of the company, its largest contributor to revenue, apart from his responsibilities as VP, Middle-East and Asia. Virtusa has about 5,000 employees spread across its development centres in Chennai, Hyderabad and Sri Lanka, besides its offices in the US.

Sumit talks of rising expectations of customers and employees and says one of his biggest challenges is to create an environment at the workplace that would combine the learning atmosphere of a university with the sanctuary of a home.

What brought Virtusa to Chennai?

The abundance of talent here and the readiness to do cutting-edge work brought us to this place. We were among the first firms to start doing outsourced product development work. We didn't want to be a me-too cost arbitrage player that gets business by offering to do something for 30 per cent less. We spent a lot of time thinking about what we are good at. We realised we are good at building, maintaining, testing product lines that are built for multiple use across industries and geographies, which people configure and use. We are good at product line engineering.

To give you an example from the automobile world, if you take many of the cars (say, the Alto/Zen/Wagon R, etc), they all drive off the same base platform. The variants are bolted on top. We wondered why the same thing could not be done in enterprise software. That's how we started out somewhere in 2002. We are just about eight years old in this but we do have a disproportionately high share of Fortune 500 clients for a company our size. We have talked about efficiency when others talked about costs. So big enterprises have been ready to work with us and we have at least 50-odd clients with whom we have fairly deep relationships. About 90 per cent of our clients are those who have stayed with us for 12 months or longer.

How much does the banking vertical contribute?

The banking vertical is the largest and contributes about 54 per cent of our top line. It is also the fastest growing.

Where are your clients coming from?

Till about two years ago, we didn't do any business in this part of the world. That's changing. Today, the US contributes 74 per cent, Europe 21 per cent and this region contributes 5 per cent and growing fast. The drivers for us are the focus on efficiency. This region doesn't care about cost arbitrage. What I can do for you in an outsourced mode for $10 an hour, you can yourself do at $9 an hour. You'll outsource only for efficiency or capability.

Which are the markets that offer promise in the Asian region?

Singapore is one. Everybody there is globalised or globalising. Again, they are looking at where the next level of efficiencies is coming from, and that opens up a lot of possibilities. There is a lot of technology investment happening in the government sector.

In West Asia, there is a lot of action in Qatar. UAE and Dubai are beginning to stabilise after having gone through their own share of financial woes. Sri Lanka is opening up and we hear of a lot of pent-up demand in Indonesia every day.

The biggest driver for demand in these places is the increasingly younger populations. Their expectations are widely different from ours. You may have stood in a queue in a bank to draw money. This generation doesn't know about such things.

What can you offer that a bigger competitor such as Infosys, Wipro or HCL Tech can't?

It's true, they are larger and offer a wider range of services. But the depth we offer and the unique global perspective we bring to the table is what differentiates us.

Especially in the area of high-volume consumer finance, collection and disbursements in insurance, housing finance, business process management and looking beyond work flow.

The business intelligence, analysis and reporting part — we are good not only in individual silos but also in the way we bring it together in an enterprise and deliver a basket of solutions — that is what appeals to our customers.

The outsourced market is a very crowded one. There is no reason for any of our customers to work with us, since we started out fairly late. The only reason they do work with us is that we help them bridge the gap and bring value to the table. For instance, we did some work for one of the top banks in the world, when they were grappling with a problem in the custodial business for the last one decade and half.

When you don't play the cost game, won't you lose clients, especially during a global crisis ?

The cost arbitrage factor is always there — but it is not at the forefront. It is not the primary reason why customers work with us. The whole focus of the efficiency play is two-fold: 1. To reduce the number of units of work and 2. To deliver it in a global distributed model. Especially during the crisis, more customers worked with us because we were delivering a double whammy.

What do you look for in a new recruit?

I look for self-confidence. We are in a business that needs us to interact with people from different cultures, different economic backgrounds, and different situations. Self-confidence is very important. The second quality is humility. We are in a people-intensive business. There are times when we have not made an offer to the best candidate (on other parameters) if we felt that there was a probability of one-upmanship in him or her. It is no use having 10 great people and 150 disillusioned people.

The US government's discouraging of outsourcing by US firms — is this temporary or will it be a long-term threat?

The question has been open since time immemorial. If you go back to the fundamentals of economics and the wealth of nations, in the long run, you are better off doing what you are good at as a country and producing goods efficiently. That is the most efficient utilisation of our resources, human and natural. All of these situations are driven by political factors – but it is the macro economic fundamentals that will play out. I don't know the complete answer. Nobody does. What is relevant to us may not be relevant to others. Time will settle these things.


Published on February 06, 2011

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