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Vaswani’s Dell promotion reflects India’s services edge

Dell has promoted Vaswani as the new president of its $8.3 billion software services and outsourcing business
Pankaj Mishra Mail MeTwitter
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First Published: Thu, Dec 06 2012. 11 40 PM IST
Suresh Vaswani joined Dell last year as chairman of its Indian operations and executive vice-president of Dell Services. Photo: Pradeep Gaur/Mint
Suresh Vaswani joined Dell last year as chairman of its Indian operations and executive vice-president of Dell Services. Photo: Pradeep Gaur/Mint
Updated: Fri, Dec 07 2012. 01 03 AM IST
Bangalore: Last year, when Dell Inc., a late entrant in the global software services and outsourcing business, was looking for an executive who could help it compete with established rivals, it hired Indian information technology (IT) veteran Suresh Vaswani, formerly the joint chief executive officer (CEO) of Wipro Ltd.
On Thursday, Dell promoted Vaswani as the new president of its $8.3 billion (around Rs.45,235 crore) software services and outsourcing business, reflecting not just an old trend of foreign IT companies taking a leaf out of the strategy of Indian IT services firms, but also a more recent one of such companies tapping into the pool of experienced Indian IT executives. In January 2011, Cap Gemini SA promoted the chairman of its Indian operations, Salil Parekh, to lead the European firm’s North American, UK and Asia-Pacific businesses.
Traditionally known for being the world’s largest repository of software coders and back-office engineers, India’s technology professionals are now becoming part of a small, but growing pool of leaders being sought by multinational firms wanting to grow their outsourcing business globally.
Indeed, for many companies looking to outsource software development and back-office projects for the first time, India is already the top brand, and such firms are more comfortable dealing with Indian managers, say people in the IT business and customers of Indian IT services companies.
“In my earlier assignments, I worked with many Indian outsourcing firms, and what differentiates these leaders is the passion they bring, and the hunger to do more,” said Mamatha Chamarthi, chief information officer at Michigan public utility Consumers Energy. In a career spanning almost two decades, Chamarthi has worked in the IT departments of large outsourcing customers such as Chrysler Group LLC.
Such executives also know the lay of the land.
At Dell, where Vaswani joined last year as chairman of its Indian operations and executive vice-president of Dell Services, he is putting the lessons learnt from his previous assignment at Wipro in terms of doing more with less.
Indian software executives such as Parekh of Cap Gemini said there are more opportunities now for professionals from the country to get global management roles.
“We will have more and more of this now, but the organization you work for needs to have a multi-cultural mindset and not just look at you as being part of a country-specific operation,” said Parekh. “Indian executives need to take these career paths, otherwise it’s difficult to gain experience of managing multi-cultural teams.”
Experts such as Sridhar Vedala, CEO of QS Advisory, a firm that helps outsourcing clients select vendors, said Indian talent is in demand, especially in the context of the tough economic environment.
“The key has been to question the status quo and traditional models at the management level, and I believe Indian talent is clearly on top at this level,” he said. “They made the way services are provided more relevant to customer needs.”
“The drive for productivity, efficiency is there (as learning) from my past experiences,” said Vaswani, who will be reporting directly to Michael Dell, the second founder-chief he’s working with after Azim Premji, who steered Wipro into IT from its roots as a maker of soaps and vegetable oil.
Dell, the world’s third largest maker of personal computers (PCs), has been attempting to expand the proportion of its revenue from the lucrative software and outsourcing business, a market dominated by multinational rivals such as International Business Machines Corp., Accenture Plc, and Indian firms including Tata Consultancy Services Ltd, Infosys Ltd and Wipro.
In Vaswani, the PC maker found an ideal candidate to bring about the cultural shift needed to boost its outsourcing business, especially because it needed to make up for its delayed entry.
“Dell is a late entrant, and its sales organization, especially the regional teams, is not as sophisticated in positioning offshoring as that of the Indian companies. To be successful, Dell will need to change that culture across its organization,” said Sudin Apte, founder and CEO of outsourcing advisory firm Offshore Insights Research and Solutions Pvt. Ltd.
Even as Dell attempts to transform its business, the company faces challenges in the hardware business that still accounts for nearly half of its total revenue. With top enterprise customers such as Wells Fargo and Co. shifting to newer computing devices, including Apple Inc.’s iPad, time is running out for Dell to reduce dependency on its traditional PC business.
“While Dell is an $8 billion services outfit, it does not enjoy the services company brand and client recall. To be in the game and win, I think the Dell leadership will need to address all these issues, pretty quickly,” Apte added.
Apart from their understanding of delivering outsourcing projects efficiently and from remote locations, Indian outsourcing leaders are also in demand because many US and European firms are looking for new business opportunities outside their traditional markets.
European IT services companies are starting to realize that shifting work to India just to capture labour cost benefits is no longer sufficient ,” said Peter Schumacher, CEO of Germany-headquartered Value Leadership Group Inc. His firm advises service providers on doing business with European customers.
Many incumbent IT services firms have lost significant share to offshore-based firms and are now at a material disadvantage. Elevating offshore-based Indian executives into leadership positions is one step incumbent firms can take toward transforming their organizations,” he added.
But as customers seek newer ideas to cut operational costs and also explore fresh revenue streams, India’s outsourcing leaders too will need to evolve.
“Indian service providers have created an impact on outsourcing models, but that’s happened and everybody does it now,” said Vaswani, who will be relocating with his family to Texas, US, in a few months.
But that’s not enough, he added.
“You can’t drive looking at the rear-view mirror. The world is changing fast and it’s no more only about outsourcing. It’s not about scale, but also looking beyond just managing customers’ past,” Vaswani said.
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First Published: Thu, Dec 06 2012. 11 40 PM IST
More Topics: Dell | Suresh Vaswani | outsourcing | IBM | Wipro |
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