Sunday, March 28, 2010

Glocal Strategies helping Indian Service providers go global?

My blogging odyssey dates back to the corporate blog (Managing Offshore IT) that I authored for over three years before branching off on to examine wider topics of Globalization in this blog. I still closely watch trends in Offshoring IT Services, and given my affiliation with a large service provider, I guess I am not too far from action. In this context, the recent news of Indian IT major TCS being awarded a £600 million contract from UK's PADA (Pension Accounts Delivery Authority) for administering the latter's NEST (National Employment Savings Trust) scheme comes as a big milestone for Indian IT.

Being awarded the contract came as a pleasant surprise for many reasons.
• Breaking into Government contracts is hard, and especially so given the current market of protectionism and nationalism being experienced after the global meltdown. Reading between the lines, awarding a billion dollar contract to a ‘foreign’ vendor that will also outsource some of the work overseas is a gutsy decision on the part of any administration. Obviously, the cost-benefit of doing so must have far overweighed the need for additional PR management.
• Most of us in the sourcing world know the hard truth: bagging Government contracts are not just about relationships, vendor credentials or capabilities. There is a lot more connecting the dots, adhering to checklists and templates that come to play as opposed to the commercial world. I remember this from my first job in the US, working for the state of Kentucky’s Revenue department, and also from some of the proposals I anchored for my employer in Canada a few years ago.
• Until a few years ago, large deals - over $200 million – were the holy grail of Indian service providers. Having cracked that ‘glass ceiling,’ Indian service providers seem to be cracking yet another glass-ceiling: large government service contracts, especially in the west.

The Bottomline is clear, it is a big deal for TCS, and the move is going to be closely watched by Indian and other global service providers.

An interesting trend that seems to be helping Indian service providers is the maturing of the ‘brown locals.’ I guess a more polite way of putting this is stating that Indian service providers are beginning to reap benefits of their Glocal strategy?!

Large Indian service providers – TCS, Infosys, Wipro, HCL etc – employ a growing pool of expatriate staff on their payroll. Many employees who happen to be Indian Americans, Indo-Canadians/British/Australian etc are Indian transplants who were deputed to their adopted-lands during the past decade or two, acquired local permanent residence (green cards) and eventually naturalized citizenship.

To bid for the British contract, one can easily hypothesize that TCS employed many ‘brown’ British employees who know the internal workings of the firm and are comfortable in the business cultures of their adopted lands. For government contract, like the one we are talking about, these employees also count as ‘local’ since they would hold local (British) passports. A really big plus while crossing off a checklist in contract requirement. Though not many in the industry are openly talking about it, the maturing ‘brown local’ employee workforce is starting to work to the advantage of Indian service providers. One can also say that this is a chapter taken from the playbook of large western technology service providers – IBM, Accenture, EDS, Cap Gemini, Delloitte – that have matured their Government service divisions by hiring and retaining ‘locals’ for such key contract management processes

My guess is that the glocal angle requires a bit more analysis.

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