Five + one

Positioning itself as a competitor to the major IT consultants and service providers, Satyam is an up-and-comer in the Indian IT sector. In a two-part interview Satyam co-founder and CEO B Rama Raju talks to ACN about his plans for the company, and how the IT industry needs to evolve.

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By  Eliot Beer Published  March 8, 2008

Positioning itself as a competitor to the major IT consultants and service providers, Satyam is an up-and-comer in the Indian IT sector. In a two-part interview Satyam co-founder and CEO B Rama Raju talks to ACN about his plans for the company, and how the IT industry needs to evolve.

The development we've seen in Dubai is spreading around the region, with projects such as Saudi Arabia's Economic Cities - what implications does this development have for the Middle East?

As human resource costs keep going up, customers will continue to be there as long as we can continue to provide value.

One thing which is quite amazing is that every time I come to Dubai, I see a lot of transformation here, a lot of innovation in every sector. Since I keep travelling, as we work in 55 countries, this topic keeps coming up - I keep hearing that 50% of the world's cranes are in Shanghai, and 25% are in Dubai. The scale is quite mind-boggling.

It may vary from sector to sector, but building this kind of world-class infrastructure here is one thing, but being able to attract talent, human resources - this is going to be very important. I can definitely see that when it comes to some of our financial services customers - I keep hearing that these financial services are going to move to Dubai, and that's nice to hear. But when it comes to the healthcare sector, there's going to be a challenge in attracting the right people to Dubai.

What do you see as the big long-term issues in bringing professionals to the region?

I can relate this to some of the other countries we're working in, such as Australia. Many people who move to Australia would like to settle down there; it has everything, it has the right kind of infrastructure and facilities. Similarly here, if all the facilities are provided, a lot of people would like to be here - definitely there are not many security issues in the UAE, which is a concern if you look at other regions like South America, for example.

Definitely the UAE is the country that people are looking at. But when it comes to Saudi Arabia, what I keep hearing from some of our partners, such as Cisco, is that Saudi is making investments in building world-class infrastructure, building cities. I'm assuming once this happens they're going to open up their economy, so people can come and start working there. So there may be some restrictions today, but I think in the long term these will get ironed out.

How do you think regional enterprises can cope with the present currency fluctuations, specifically the weakening dollar and strengthening rupee?

This is a problem the world over - even if you look at Indian companies, they are being affected by the dollar. The challenge is to meet the expectations of investors - these expectations are not coming down, despite these issues. So you need to look at finding ways of improving your productivity.

If you look at our IT industry, we are moving from tier one cities to tier two cities within India - or even exploring the possibility of doing some work in countries such as China or Malaysia. We have to find places where we can deliver the services, where we can reduce the cost of delivery, improve productivity - these are the things which we need to be more innovative in our approach towards. This is what is happening in our globalisation drive.

For Satyam, has currency fluctuation made it harder to sell into Middle East markets?

We get around 58% of our business from the US at the moment, and 22% from Europe; the balance is distributed between the Middle East and Asia-Pacific - we get around 10% of our business from Australia, and another 3% from Japan.

When we are working in different countries, there is a natural hedging that takes place, but I think that being a global company, working with around 180 Fortune 500 companies that operate around the world, we need to be global.

The Indian success story has been exporting high quality but cost-effective IT services around the world - is this model going to continue into the future, or will it change?

I don't have any doubt in my mind that in a flat or globalised world, it is not just the cost that the customers are looking at - customers are looking at the long-term, looking for companies that understand their business, and can provide solutions which allow them to become more competent and more effective in their way of doing things. As long as they have that confidence, this off-shoring or outsourcing trend will continue.

Today we are concentrating on exporting services mainly from India, but in the future as human resource costs keep going up, the customers will continue to be there as long as we can continue to provide value.

One of the things we are doing as a company, is focusing on long-term relationships. We are making investments in training and development - in 2006 Satyam was voted 15 in the world for training and development by ASTD [American Society for Training and Development]. In 2007, ASTD rated us number one in the world - this is the first time a non-US company has been number one.

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