I wouldn’t bet against current set of Indian entrepreneurs: Saurine Doshi

I wouldn’t bet against current set of Indian entrepreneurs: Saurine Doshi
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First Published: Tue, Sep 29 2009. 11 58 PM IST

Growth curve: Saurine Doshi says consolidation among Indian companies will ensure that the size of companies will become larger and the kind of money being spent on hiring services will go up. Abhijit
Growth curve: Saurine Doshi says consolidation among Indian companies will ensure that the size of companies will become larger and the kind of money being spent on hiring services will go up. Abhijit
Updated: Tue, Sep 29 2009. 11 58 PM IST
Mumbai: Saurine Doshi, 44, took over the reins of AT Kearney Ltd’s India operations in August. For some two years, the Indian unit, the country’s third largest management consulting firm, was led by John Kurtz, managing director, Southeast Asia, from Indonesia.
Growth curve: Saurine Doshi says consolidation among Indian companies will ensure that the size of companies will become larger and the kind of money being spent on hiring services will go up. Abhijit Bhatlekar / Mint.
Doshi, an experienced AT Kearney hand from the US, was sent to India three years ago to set up two new verticals—communications and high technology, and consumer industries and retail.
Doshi says AT Kearney’s Indian operations are nearly sold out in terms of time slots, and is candid enough to add that the firm has on occasions walked away from “surprising” price points that the competition grabbed later. Edited excerpts from an interview:
How do you look back at your Indian stint of three years?
It’s been an exciting three years. It’s good to be a part of a marketplace which is growing as (rapidly as) India. During this period, we built our business across a variety of business verticals, including telecom, IT services, consumer and retail.
Can you talk to us about your firm’s strengths in specific areas?
Globally, we focus on two or three key industries. Consumer and retail, telecommunications and technology, process industries and energy sectors, and automotive and discreet manufacturing. So globally, 85-90% of our businesses come from those four verticals.
What we have done in India is to pretty much replicate that model. When I moved to India the biggest industry by far for AT Kearney was really the process and energy industry. But my own background has been in the consumer and retail space and telecom and energy.
The growth in the Indian market has been phenomenal in the past three or four years.
It coincided well. So now we have a robust positioning in these two sectors and I came here and set up a practice. One is consumer and retail practice and telecom and IT practice, and so we have really built those two practices in the last three or four years.
How do you see your industry growing?
Overall, we see the consulting industry growing at a healthy pace of 15-20% a year in India. It is probably a $250-300 million marketplace. It will evolve in the next four-five years.
Recently, Tata, through a subsidiary, tied up with German consulting firm Roland Berger. Do you think such moves by Indian companies will put independent firms like yours at a disadvantage?
What Tatas are doing is not new in the global market. Many of the large Fortune 500 companies have their own internal strategic groups. And it’s a good thing for companies to do internally and they should rely on external help only if they believe there’s certain amount of expertise or cross industry perspective that is on offer.
How’s the Indian market growing?
(The) Indian consulting industry follows the same development path that was followed by the western mature markets. The domestic market is growing by 15-20%. In some of the geographies the consulting industry is actually shrinking. It will probably grow at 2-3%.
In some of the emerging markets such as China, India, Brazil, this type of growth rates on an average are very doable. When the economy itself is growing at 7.5-8% on a real basis, add inflation to it then you have 15-20%.
Consolidation among Indian companies will ensure that the size of the companies will become larger. And as a result, the penetration or the kind of money being spent on hiring services will go up. The deepening and broadening of Indian companies will need more managerial expertise.
Are the problems facing Indian companies similar to what is faced by companies elsewhere?
Yes and no. I would say that in 2005-2008 most Indian companies were focused on growth. Majority of the work for consulting industry was to support these growth initiatives.
In western Europe and North America it meant very significant cost cutting, and whereas in India they were more conscious of their growth strategies and more interested in efficiency improvements.
There is talk about consulting firms getting desperate and undercutting each other’s fees.
We do see some surprising price points in the market place in some competitive situations. When we see that, we tend to walk away. In some months, we’ll be sold out (in terms of time slots) and so we have not felt the need to make any changes in our price points.
But yeah, in downturns what one does see is probably companies with lower market shares do get impacted more and some of them decide to do work at a discounted work structure. In downturns, at times, these are good decisions because if you work with a client and they have a particular need and a firm adjusts to their price points they earn their client’s loyalty.
Have you had to walk away from such situations?
It happens quite often. Just now (before Mint met Doshi), we were looking at a global firm planning an entry into India. The client has come back to us and admitted we have the best proposal, but they added we were double in price. They want us to reduce the price by 50% and they promised to give us the order on the spot. At best we could offer 10-15% lower. Otherwise it is an infeasible proposition.
I don’t have a black and white answer. Many times firms try to build capabilities and many times you are operating from strength because we know that nobody has our capability. But such surprising pricing phenomena are rare. Thankfully, that’s coming to an end.
There are also reports about downsizing by consulting firms.
Difficult to say. We have all heard rumours. But as far as AT Kearney goes, we’ve always increased the number of people we have had from September of last year to today.
We now have 110-115 consultants. Last year, we had 80 thereabouts. We have 7-8% of the market...probably we are No. 3 in the marketplace in terms of high value consulting and we would love to become one of the top two players in the next three-four years.
Many consultants believe Indian conglomerates are a relic of the licence raj.
Very candidly, if you think of the last 10 years and draw an analogy with the US, the last 10 years are equivalent to the US barons, where the large names got traded, like the Rockefellers, etc. I think we have brilliant entrepreneurs in India who have the capability to better any of the conventional wisdom... They also know that they cannot do it single-handedly. Some of them have professional people and have different operating models.
I think for the foreseeable future, conglomerates will continue to dominate in many sectors. Look at Japan. They have “keiretsus”. It is nothing other than what we call conglomerates. Except that the operating structure for Japanese keiretsus is hidden. Most successful companies in the world are in Japan. I would rather bet on the current set of Indian entrepreneurs than against them.
Do you expect an imminent shake-out in the Indian aviation sector?
We don’t have a silver bullet remedy. Our nationalized airline needs to get their act together. I think as far has private airlines go, Jet Airways or Kingfisher Airlines go, they have one of most successful service models in the industry.
We can look forward to cost reduction or belt tightening by airlines. But there is only so much an airline can do... I think you’ll see end-to-end efficiencies enhanced, greater cooperation and collaborations.
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First Published: Tue, Sep 29 2009. 11 58 PM IST