Back `Let me tell you what to do'
Bharat Kumar
Krishnan Thiagarajan
| Indian IT personnel are beginning to don the mantle of advisor. What's more, clients are listening. |
IT'S a question of trust. And Indian software personnel are beginning to get their clients' in truckloads. Two events point to the growing importance of Indian presence in the management-cum-IT consulting space. One is a recent announcement by the Big Blue. IBM Global Services India is planning to offer offshore consulting services to its customers from this year. The second indication that the client base is sitting up and listening is the fact that research firm Forrester put out a report, in December 2005, that evaluated Indian software vendors' consulting capabilities across 20 criteria.
Even though it affirms that they are not up there yet, it says that customers trust their Indian providers. "Many IT and business executives are satisfied with their Indian vendors' technical and business process outsourcing capability. This leads them to believe that the same vendors can easily accommodate both technical and management consulting tasks — at a fraction of the cost of incumbent consulting vendors such as Accenture and IBM."
In the context of these developments, eWorld caught up with someone who has been revelling in the consulting arena for some time now. G.B. Prabhat, Director, consulting and enterprise solutions in Satyam Computer Services, first started Satyam Renaissance Consulting along with Mohan Eddy in 1995. Since then, the company has merged with Satyam and become the consulting arm. (Also refer eWorld's case studies with Satyam, in editions dated September 25, 2002 and October 2, 2002.) Prabhat believes that there are two factors "moving the industry's tectonic plates: that offshore matters and that delivery of business value to the customer, and not mere advice, is critical."
In this game, Prabhat believes, Indian vendors are one up. So, what does an Indian software personnel do, sitting in India and advising a client based, say, in the US? Prabhat delves into these and other details of the consulting business.
How do you define pure consulting?
I can define consulting. Since technology is inextricably entwined with consulting, it is difficult to explain pure consulting. Ask me to find the spots on a screen but not separate them out. They will always be there. Likewise for technology in relation to consulting.
Business strategy consulting and business process consulting form parts of consulting. The second embraces business process design and engineering, takes old generation processes, recasts them with prior incorporation of technology in the process design, makes new processes out of them and helps implement them in an orderly manner using change management. It also addresses those dimensions that impinge upon regulatory consulting - what we call ERM or enterprise risk management.Compliance with the Sarbanes Oxley Act (SOX) is an example. You give a client a business strategy and a business process and then tell him that these are the risks. Business process consulting comes in when you help them mitigate and manage those risks.
Next is change management. We have to be an agent of transformation. It may be for SAP, a portal or even implementation of a new performance measurement model. That's consulting, too.
Within IT-based consulting comes IT portfolio management. IT is as much a portfolio of assets as are financial assets. We help the CIO get the maximum out of such an asset. We do what any portfolio manager would do - add, delete and reengineer to ensure maximum returns.
Next comes IT architecture where we specify components that enable new generation of business processes - it could do with the application layer, operating system, the network layer and the hardware layer. This has to be capped along with the business process footprint. These are not linear exercises. If you change the floor plan in a building, then you need to change the electrical cabling plan accordingly.
We also do IT applications consulting that includes product agnostic and product dependent consulting. When it is not related to a product, we evaluate business considerations, identify achievables and help the client choose a set of technologies that fits the floor plan. In consulting relative to a product, the merger of technology and consulting is more evident than elsewhere. Take an ERP implementation. It is like a match box. You can use it to cook or to set fire. When we explain to the client that efficiency levels are not what they ought to be despite using a particular ERP product, we actually help them rejig certain modules and set those right.
Can't consulting remain independent of technology?
Toto is a fine example to explain why these two are difficult to separate. Toto is a brand of high tech toilets from Japan. They offer an automated wash, an automatic check-up of sugar in urine, and at the high-end even ring up your doctor to tell him you need immediate treatment. If you were a true management consultant with no idea of technology, would you be able to wisely advise an Indian toilet manufacturer on the threat of such competition?
How is your consulting revenue distributed across the world?
It is 65 per cent from the US, 17 per cent from Europe and the rest from the Asia-Pacific. India gives us 2 per cent of our revenues.
Any case studies you could dwell on?
We advised a large auto components supplier in Europe - our mandate was to bring down work-in-progress (WIP) inventory by 15 per cent. We had to put together the four elements we talked about: strategy, business processes, IT and change management. What and why, how, automating the how part and last ability to make transformation. All four in place to deliver business value.
We advised the manufacturing plant as to what they should produce and why. We also advised them on what they should stop producing. Then, on what they were going to produce, we advised them to produce only against orders and not against expected demand. So, there was business process redesign not only for the client but for his supplier too, so that the latter could supply material just in time without purchase orders and only looking at the consumption.
On the IT front, our client had 22 different variations of ERP across 70 odd plants. We reduced the variation and made all ERPs conform to this process redesign. It wasn't easy, The ERP products themselves had to be customised to suit our process. We gave priority to the process and not to technology.
Last came change management - which was multi constituency and multi cultural. Europe poses several challenges, not least being the language. The customer has confirmed that WIP did, indeed, reduce by 15 per cent. That was the measure of our success. Not, whether the b2b system we developed by integrating ERP with Brainware went to work or not.
For a large engine manufacturer in the US, we helped raise efficiency by 33 per cent. In doing so, we discovered that they could use one of i2's modules. It was not a precondition. The search was for a better process and it so happened that it was i2's first implementation using the onsite-offshore model.
It is about creating both output and input value. Output value is measured by how much more business value you get for intended expenditure. Input value comes from how you do the same with IT for less. Former is how to get more biz value for intended expenditure.
There is talk about IT products, especially ERP products, becoming increasingly inflexible to customisation. Would that affect consulting?
I call that nirvana in a box. Not possible. That is far from the truth. They (ERP companies) are giving you a platform with a proliferation of choices. Earlier, the message was even more ineffective: Best practices contained here. Open the box and attain nirvana. Dell became good not because it got the practices externally. Its supply chain practices are unparalleled. It exploits the advantages of i2 and SAP differently from how a competitor does it. Both are users of these products.
Why can’t its competitor match its manufacturing economics?
It is because the processes they invented inside are distinguishing. Fusion and SAP will offer many choices and if you choose one among these, you should be able to do sufficiently flexible innovation inside — on both product and process. That the technology vendor’s product would not hinder that innovation is now a given.
Earlier, the norm was to cut the leg to fit the shoe. Could I do Kanban using an ERP system? No? So I give up Kanban. The product used to be the limitation on innovation. We are now going from an era of limited innovation to an era of potentially unlimited innovation.
The second part of the story is that the need for services will increase. Given the above, there will be expansion rather than shrinkage.
There is always a gap between vision and reality. IT has to be plugged. If you make promises on five counts, you typically deliver three, as a product vendor. You have to hire someone to do the other two. The taller the promise, the wider the gap, so, greater the scope for expansion of services.
There has been a recent change in Satyam’s revenue reporting structure…
We started reporting consulting as one category of revenues starting April 1 2005. This is due to the increasing dominance of consulting and our growing strength in packaged applications and the increasing interconnect between consulting and packaged implementation.
There are two principal drivers of change — onsite-offshore delivery is inevitable and is not a choice. This is knowledge work and not merely technical work being done here. Contract with customer is driven by delivery of business value and not advice alone. And value is measured in business terms, not technology terms.
Most consulting engagements are relationship-driven. Once that appears, boardroom relationships are the norm. It means enormous face-to-face interaction. For some time, we can expect only some kinds of contract. For instance, in the ABN deal, the infrastructure part of the order went to IBM. That was no surprise.
A relationship stands on something and not by itself. It is based on value delivered. Customer loyalties will switch based on that value. Relationships are not only about playing golf and taking the client out for a drink. This might take you past rounds one and two. But in round three, you have to demonstrate delivery of business value.
If you fail, that relationship will be abandoned. Other things being equal, all of us do business with those we are most comfortable with. Now, we have demonstrated superiority. Offshore certainly matters. Delivery of business value to customers matters. These are moving tectonic plates of industry. Who the movers are is debatable. That these are moving is inarguable. We are now ahead. I am not saying that Indian vendors will emerge winners. We can become complacent and lose the advantage. But, we, at Satyam, spotted it first and did it at a time when it was neither accident nor happenstance. We were hard-pressed to do it.
Picture by Bijoy Ghosh
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