apr11 ticoll

A Passage to IndiaGTMA & ITAC missions on the occasion of the NASSCOM India Leadership Forum February 2006 : A Passage to India GTMA & ITAC missions on the occasion of the NASSCOM India Leadership Forum February 2006 David Ticoll david@ticoll.com


The great debate : The great debate


Promod Haque : Promod Haque Managing Partner, Northwest Venture Partners (Palo Alto) Named by Forbes as top performing VC of past decade (2004) Was contacted by Jerry Lewis, Chairman of House Appropriations Committee, to develop a possible private-public strategic alliance between US & India Why? US technological foundations eroding, losing global superpower status, other countries catching up The concept A new “Bell Labs” – US-India Development Labs Align interests of industry, government, universities Majority of product management and fundamental research in US (the “R”) Majority of product development in India (the “D”) License IP to industry Focus: nanotech, pharma, energy, homeland security, next generation semiconductors The ask: $500 billion


India’s innovation mission : India’s innovation mission Global addressable market for offshoring $300B To be offshored by 2010 $110B India’s potential share $60B With “innovation” to catalyze growth $75 – 80B President’s challenge $200B Immediate market drivers: rising labour costs, “now what else can you do?”, “why should we hire you and not somebody else?”, MNC competitors “The answer lies not just in simple labour arbitrage play, but in the ability to add value, to innovate, whether in re-engineering processes, hiring, loacating a new facility, transporting employees or even canteen management. Are there better ways of mining unstructured data, so that we can improve customer satisfaction levels? Can we improve our hiring or transport systems?” - Pavan Vaish, COO IBM Daksh Data: Nasscom & McKinsey


Perception of Canada : Perception of Canada Nasscom sees Canada as by far its chief competitor as a destination of choice for offshoring of IT services & BPO Applies to current and future attractiveness: India seen as “high”, Canada as “moderate” “Necessary activities”: India: maintain continuous supply of skilled labour Canada: Maintain attractiveness as nearshore for US Develop hi end niches “for sustenance”


Nasscom priorities : Nasscom priorities Talent pool & skill development “to better leverage the world’s largest working population” Strengthen urban infrastructure, regulatory reform Drive philosophy of operational excellence “across the board” so that “India based delivery sustains world-leading benchmarks in performance” Grow the domestic market Promote “uncompromized” global free trade


Nasscom talent initiatives : Nasscom talent initiatives Skill assessment & certification programs for entry-level talent & low-mid level management Image enhancement programs to increase awareness of career opportunities Academia Strengthen ties and industry interaction 2-way feedback Keep academia up to date on industry developments Encourage changes to curriculum & pedagogy National talent database


McKinsey – Nasscom Process 360 benchmark program : McKinsey – Nasscom Process 360 benchmark program “Driving operational excellence” – moving from pilot to launch The challenge: Margins under pressure, “the only thing going down is telecom costs” Shift from FTE to end-to-end costing India’s competitive advantage not rapidly eroding, but needs to be increased Need for customers to see what is really happening What’s unique: focus on “remote centers” – both outsourced & captive – global, ultimately multi-geography (will syndicate), process specific – automated tool + benchmark data Tests alignment between key stakeholders, outcomes Provides performance metrics comparisons Derives industry trends Initial findings Poor alignment between customers & vendors on process priorities, worsens with time Great potential for cost savings with process improvement. Best in class have 3x advantage – almost as much as value of labour arbitrage Islands of excellence have weak linkages across processes Key improvement areas: recruitment, training, customer management Skill-intensive BPOs differ significantly from scale (rules) based BPOs on several operational practices Eventual plan to take program global


Evalueserve: knowledge process outsourcing : Evalueserve: knowledge process outsourcing


What sets India apart : What sets India apart Strengths National strategy – focus, culture of winning Industry-driven, cooperation to grow the pie Continuous learning, questioning, strategic rethinking Strong domestic industry Aggressive competition from MNCs Articulate, knowledgeable government leadership Weaknesses/threats Infrastructure Transition challenge to innovation MNC disruption of domestic players Cost pressures Labour market needs Other emerging economies


Issues for Canada : Issues for Canada How will globalization change our economies? What should go offshore to make our businesses more competitive? How do these deals yield competitive gains for our businesses? Are our companies fully capitalizing on these opportunities? What should we fight to create, keep or grow? What is the impact on our knowledge economy agenda? How will globalization change our labour markets? How should we prepare students and employees for these changes? What is our trade and investment game plan? What is the likely trajectory of FDI to India? From India? What is “good” FDI in each direction? How do we encourage it? What services can we export to India? What is the geopolitical and geo-economic play? What is Canada’s positioning, given the US-India alliance? How do Canada’s governments and business leaders develop strategy, priorities and programs in conjunction with key stakeholders? With other partners?


Policy and strategy issues : Policy and strategy issues Geopolitics & geo-economics New global division of labour Firm capabilities, market trends & demographics Boundary decisions and new competitors National & global scenarios 2007-2020 Industry scenarios Measurement Regional vs. national strategies Labour market development CEO intentions Is an educated workforce the panacea? Canada’s play in global innovation networks National leadership, policy & strategy priorities