Emerging Markets no more BRICS in the wall!
This is a gated link that requires you to register and sign in to download the report. This is a report based on a sample survey of business executives from emerging markets and the analysis shows that BRICS countries are no longer the favorites when it comes to IT spend and that APAC is the new boom town.
All the wins with telcos in MEA region as well as the engagements around TIAB made the MEA region a successful crucible for the MS – TechM relationship. As also the head of sales for MEA, I was in a position to drive many of the partner relationships successfully on ground but it was now time to take things global with Microsoft. One of the best things that happened was the movement of Nikhil Balagopalan from TechM’s Middle East unit to Redmond to become the Microsoft Account Manager on ground.
Nikhil, a high energy and extroverted software developer had approached me over a year ago to consider him for a sales role. I had promptly deployed him into our Dubai office where amongst other things he was the primary point of contact for the Microsoft relationship in the MEA region. He did several high profile Go to Market engagements with Microsoft across the region and it was only natural that he was picked up by our President CP Gurnani (he has since become the Managing Director of the combined Tech Mahindra and Mahindra Satyam) to be deputed to Redmond. All of a sudden the activity levels and engagements shot up at the Redmond end.
Nikhil Balagopalan (He joined Microsoft & is now based in Redmond)
With Nikhil on the ground, I promptly started the initiative of offering our staff, deployed at MS-IDC, Hyderabad the opportunity of working at Redmond. This also meant convincing Microsoft managers at IDC to let go of their key temps for this roll over to Redmond. We agreed on release plans and timelines and soon it became possible for Nikhil to offer Microsoft experienced resources at Redmond. I won’t say that this strategy was an unqualified success but it did help to break ice at Redmond and we did make a few deployments that later lead to more work of different kinds. This move also helped attract more people from within TechM to take up the Microsoft assignment at Hyderabad in the hope that they too would get a chance to go to Redmond.
It was during Nikhil’s tenure that our sell through engagements began to grow global beyond just the Middle East. Nikhil set up a furious tempo through regular conference calls with India and arranged to get TechM visibility into the other regions at Microsoft. Soon we were engaged on many more CCF sales in Europe, India and APAC. Strangely we were not able to break into the American sales unit of Microsoft. Again the telco-only specialization made it difficult to catch the attention of the US sales team with just CCF as the primary go to market offering. Besides, in the US the Microsoft sales team had an existing deep relationship with Accenture for CCF and it was difficult to break this.
In the meantime we started to get some product development work from Redmond. One was around the CCF Portal and the other was a project code named “Marianas” that sought to build a reporting solution for Telcos on top of the Microsoft SQL server using BI tools. This was to eventually become the seed around which Microsoft would build a BI solution for telcos. The uptake of this solution with telcos, especially the smaller ones, was very good and Microsoft Consulting jumped in to own the go to market for this solution that TechM helped build.
Microsoft had also launched its next big initiative called the Connected Services Framework (CSF) targeted at telcos and TechM was involved in some deployments across the world including at British Telecom. TechM also was an early partner in the CSF Sandbox initiative that sought to create a shared development environment for building apps in an almost open forum.
Around this time two very senior and talented individuals from TechM were drafted into Microsoft at Redmond to be part of some key programs. One was Sunil Aggarwal and the other was Satyabhushan Mahapatra (SB).
With active support from SB and Sunil, Nikhil drove a slew of initiatives with Microsoft where TechM was actively involved as a co–creator as well as a potential future implementer.
On its part, Tech Mahindra too made substantial investments into MS-TV and trained a bunch of people in the technology. We signed the MSA with MGSI in India and were actively involved in the MS-TV implementations that were going on offshore at Hyderabad.
In 2007, Microsoft became one of the top five global accounts for Tech Mahindra, alongside BT and AT&T.
I had started to move Mount Microsoft!!
PS : There are so many names that I have not mentioned in these posts. I could not weave them in, else the posts would have got so long. Let me try and mention some more names here. Sandeep Athavale – the quiet worker without whom I would have failed in making Microsoft happen. Kumar Anand – the high energy go getter and an ex Microsoft staffer himself. He was the brains behind the Marianas success and also the CSF work we did at BT. Trusha Chittal and L. Manivannan who worked as pre sales consultants within Microsoft and helped sell TechM to their respective MS sales teams constantly. Maghesh B.M who stepped in when Nikhil moved to Redmond and in his own quiet and assured way built deep relations at Microsoft. And a whole bunch of people across TechM in sales, delivery, training, hiring, hospitality, support……
Kumar Anand
Sandeep Athavale
Mohammad Gawdat !
Our first win with CCF was at Nawras Telecom, a Qatar Telecom subsidiary in the Sultanate of Oman. Microsoft was bidding into this account in competition with Oracle which was promoting its CRM modules. While Oracle was an almost defacto choice at Telcos in the Middle East and had strong domain skills, Microsoft was clearly the underdog at Nawras. MBT brought in the crucial telecom knowledge during the pre sales stage to clinch the deal for Microsoft. This deal was the start of a great relationship with Microsoft Gulf.
It also meant that Oracle, Gulf branded TechM as a foe, a high price to pay to befriend Microsoft, especially in the Middle East. Mohammed Gawdat who used to head the Comm Sector for Microsoft in the MEA region at that time became a dear friend as well as a TechM well wisher. I made some great friends in Aben Kovoor, Mustafa Farhan, Mohammed Maseehuddin, Salim Naim and many more Microsoft staff in the Middle East. It was also the start of a good relationship with Kim Askjaer the IT Director at that time at Nawras Telecom, who had taken a bet on Microsoft CCF against the goliath of the region, Oracle and made it work!!
Kim Askjaer
This win and another one soon at Batelco in Bahrain with CCF got us quite some attention within Microsoft and soon Gawdat and I were talking around the idea of building an O/BSS software stack around the Microsoft technology targeted at Tier 2-3 telecom operators in emerging markets. Gawdat and I saw that the next 3-4 years would see a spate of new telecom licenses in the MEA region and we believed that there was a scope for a lower cost of ownership software stack backed by a leading corporation like Microsoft targeted at telcos. The combination of the brand and technology from Microsoft and the deep domain understanding of Tech Mahindra could make this stack a success, we believed.
Gawdat mobilised the Microsoft end and I did likewise within TechM. We put together a set of partner products (Metratech, Basset, Redknee) that worked on Microsoft technologies and Microsoft’s own offerings in ERP, CRM, BI, Portals and EAI and identified areas that would require some special development of modules by either Microsoft or TechM to complete the stack. The whole idea got into the S0, S1, S2….product lifecycle process that Microsoft Redmond follows thanks to the relentless influencing and persuasion by Gawdat at all levels. We did several conference calls and followed it up with two meetings at Microsoft, Paris at their offices in Le Defense and put together a roadmap for the development of what we initially called as TIAB short for Telco In A Box. Shirish Munj from Tech Mahindra (who subsequently left TechM and eventually became the CIO at Tata Teleservices, Mumbai) was the chief architect of TIAB with his very sharp insights on how it should be structured and built.
Shirish Munj
There was a quite some excitement within the Microsoft team in Redmond and in Europe – Terry McGuigan, Theo Gees, Theirry Fery, Michel Burger, Yves Pitsch, Florian Zink, Jerome Hannebelle, Andrew Steven to get a telco SKU going. Proposals and technical specs flew back and forth thick and fast but what finally went against the initiative was our inability to justify revenues of $ 1 billion over 3 years using the SKU that we were about to invest in and create. As executive sponsors Gawdat and I were targeting to build a low cost of ownership O/BSS stack targeted at smaller telecom operators in the emerging markets who couldn’t afford to pay top dollars but yet would prefer a branded offering. Consequently it was not possible for us to build up the expected revenue forecast that Microsoft senior management wanted, to back the building of a new SKU. At Microsoft in Redmond it was about scale and any product that did not get revenues of around a billion dollars in 3 years did not make the grade.
It was quite unfortunate because we believed that this was the best time for Microsoft to have taken a lead position in the core O/BSS space in the telecom vertical through a market niche that had the potential to be tapped. Oracle had still not done any of its acquisitions – Portal, Siebel, Metasolv and likewise Ericsson had not done its acquisitions too – LHS, Telcordia etc. The only other company that had a complete stack for a telco at that time was Amdocs. The market and the pole position was there to be had at a relatively much lower cost for Microsoft. Sadly, the momentum was lost and Microsoft ended up cobbling together a TBS framework that never really went anywhere.
It was quite disappointing and over time Mohammad Gawdat too moved on from Microsoft to head Google’s MEA business.
Don’t go away! More to come………
Amit Chatterjee – MD of Microsoft’s India Development Center
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I quickly figured that I had to do something different in this environment if I had to sustain and grow Microsoft as an account. Thankfully for us, in the third round of resumes that we sent out, Baskar Kothandaraman of Microsoft found a set of candidates that he believed could work in his team as temps. These hires gave me the breathing space to work on a different plan to service an account like Microsoft from within the realms of a software services company.
Baskar Kothandaraman – A Very Important Person at Microsoft
( Baskar blogs extensively on a different topic that you may wish to read at http://baskarkothandaraman.blogspot.in/2010/09/leave-iits-alone.html)
With some guidance from friends within Microsoft, I figured that what they were seeking were “basic smarts” in Microsoft speak. For one it had nothing to do with years of experience – Microsoft had learnt it the hard way too, that the so called land of software (India) was rather short on product engineering skills. Basic Smart translated into – strong computer science skills, algorithmic thinking, deep skills in any one low level programming language like C, C++ and a good ability to articulate and debate. A very tall order indeed for an average software engineer in the Indian IT services industry at that time. Remember that this was also a time when hiring was at its peak – someone mentioned in jest that one of the leading Indian IT companies had a poster at their campus that said, “Beware trespassers will be hired” 🙂
I figured that the best option was to hire differently and hire right. I worked closely with the delivery team and the hiring team to develop a new set of tests that assessed algorithmic thinking and proficiency in low level programming languages. These tests were administered to fresh recruits already in the company and the ones that cleared these tests were culled out and funnelled into the Microsoft practice that I helped create undercover with some terrific support from my delivery colleagues like Ashirwad Tillu, Sunil Joshi, Manisha Velankar, Anil Kumar, Priyamvada etc. Once in, they were constantly kept on a diet of projects that honed and sharpened these skills till they were interviewed and picked up by Microsoft IDC. It was during this time that I got to know of the book “How would you move Mount Fuji?” and ordered multiple copies of it into the company library for the Microsoft Practice team to read it and tune themselves to face a Microsoft interview.
Our success rate did go up significantly and the company started to view Microsoft as an account to reckon with. Once we got IDC into some steady state, it was time to look at other avenues of getting revenues from the Microsoft ecosystem.
We figured that it was also important to be selling some of the Microsoft solutions in the telco domain to be seen as a real partner to Microsoft. This became critical if we were to be considered as a vendor at Redmond because all our other competitors from India were doing this quite well. Now the challenge was that MBT was focussed only on the telecom vertical whereas Microsoft did not seem to have much to offer for that vertical by way of solutions, at least in the core area of OSS & BSS which were our sweet spots.
Microsoft did have a Communications Sector at that time and one of the flagship products that Microsoft was shipping was called CCF – Customer Care Framework. The product management for CCF was headed by Vish Thirumurthy a very passionate and determined Microsoft manager. In a burgeoning world of call centers, CCF sought to offer a unified screen to a harried operator by connecting to several back end systems seamlessly and unifying it all into one convenient screen.
TO BE CONTINUED……….
The title of this multi part post is inspired by the book titled “How would you move Mount Fuji?” by William Poundstone which sought to unravel Microsoft’s cult of solving puzzles in its attempt to hire the most creative people.
My story is not as much about creativity (though there was loads of that too) as it is about grit, tenacity and influencing skills in making Microsoft as a customer count at the organisation I worked for – MBT and later renamed as Tech Mahindra.
We signed the first Master Services Agreement (MSA) with Microsoft’s India Development Centre (IDC) based in Hyderabad, India in the year 2001. This was a staff augmentation contract to allow Microsoft to hire “temps” from MBT in the area of Development and Testing. MS-IDC was headed at that time by the dynamic Srini Kopollu who had returned from Redmond to set up IDC from ground up. He then convinced many of his mates at Redmond to return to India and help build IDC.
Many of the managers who came to India to join IDC have since become good friends of mine – Amit Chatterjee (the current MD of IDC), Baskar Kothandaraman, Debi Mishra, Krishna Natarajan, Madan Appiah, Sundar Srinivasan to name a few; and the others who joined IDC directly in India and who are also good friends include Dinesh Bhat, Pradeep Tammana, Satheesh Konidala….. The unique aspect of people at Microsoft, especially on the technical side is their two state being – either 0 or 1. It’s either black or it’s white. No grey! So you know where you stand at most times. I enjoyed dealing with all of them.
Coming back to the MSA, once it was signed the real challenge arose when it came to fulfillment. Microsoft’s standards for hiring, even a temp, were exacting. So when the first set of requirements for testers came from Microsoft we rushed in a bunch of CVs and the interviews were scheduled soon thereafter. Outcome – every candidate was rejected!! Another set of resumes were sent out and the cycle was repeated. Same result!!! There were some desperate faces all around.
Now this is where I learnt my first lessons about the stark difference between a software services company in India and a global software product development company. Indian IT industry around this time was in the throes of unbridled growth – ~40% year on year; business falling in through the door. Fresh engineers after working on projects for 3-5 years quickly went on to become team leads / managers and soon lost touch with technology and coding. In fact the norm in Indian IT companies was that if you were still coding beyond 5 years of your work life, something was very wrong with you!! And contrast this with a software product company like Microsoft where even after over 20 years of work experience a Srini Kopollu or an Amit Chatterjee would take pride in their coding skills and could discuss technical details at the deepest levels with a young coder.
Another angle that kicks in is that in the Indian software engineer speak, software testing is a No. So when you put out requirements for a testing project, even if the client is a Microsoft, the best engineers don’t put up their hand. And finally with Microsoft’s exacting hiring standards, the resource management team at my company began to feel that Microsoft was cherry picking!!
Remember we are talking of the hey days of IT outsourcing where the resource management team was busy fulfilling complex customer orders that in effect said, “Please send us one container load of Java, two container loads of Cobol and half a container load of D2K” 🙂
TO BE CONTINUED……..
NEGOTIATING DEALS FOR IT PROJECTS WITH MIDDLE EAST CUSTOMERS – Continued
Jerusalem – Dome of the Rock
The other issue that comes up is when you quote for a Fixed Fee project. A ploy by the typical customer would be to come up with a thumb rule estimate of the number of people to be deployed on the project, the estimated timeline and do a back of the envelope calculation to arrive at a price using a ball park person day rate. To get out of this trap you have to engage in a discussion that will hopefully educate him / her on the difference between a Fixed Fee project and a Time & Material project and why the back of the envelope estimate is way off. I have had the experience of several sales people in my team come back stumped with this customer tactic and it takes quite some coaching to help them believe that they can counter it.
Another sticky area is around Warranty and Support. If you are not careful you can be in an endless period of free support after the implementation phase because they will continue to point out one issue after another and avoid a cut over. So it’s important to nail down the conditions for cut over clearly and crisply before you start the project. In this context it is very important early on to ensure that the project is considered as a jointly owned project.
I always had this joke that the MSA which stands for Master Services Agreement upon being signed and sealed quickly transforms to a Master Slave Agreement if you have not formally and informally established the joint ownership bit with the customer.
Finally you need to clearly agree and define what constitutes a Change and agree on the Change Request process. It is worth spending more time than it seems reasonable on this aspect and prepare yourself with data and examples on why this is necessary. The usual trap is along these lines, “You are the IT and domain experts and you should know what you are doing and if there is a change it’s because you either made an error or you didn’t know. So we won’t pay for changes.”
I believe that all this happens because unlike the western countries where IT projects have been going on for a few decades and there is an understanding at all quarters, that is not the case in these emerging economies. Moreover in a trading kind of situation the comfort level is take delivery of goods, examine them and pay for it. In software projects there is nothing tangible to be seen for a long long time.
This also therefore results in a tendency to put across payment terms that say, 20% towards project mobilization, 60% on achieving User Acceptance, 10% on Go Live and balance 10% after one year of Go Live.
If you combine this with the INVEST logic I wrote of in the post before this one, what it means is that unless you know the ropes and are savvy, you should also be owning a bank to be able to do business in the region. 🙂
NEGOTIATING DEALS FOR IT PROJECTS WITH MIDDLE EAST CUSTOMERS
Roman Amphitheatre inside PETRA!
“Where is the Letter of Intent (LoI)?” I asked my Account Manager. He shook his head, made a face and said, “Decision put off by a week more boss!!” This is a common refrain in the Middle East and I am sure in many other emerging markets too. Interminable delays, unclear buying process, several cycles of negotiation and a shortage of appreciation of engaging on IT projects are some of the characteristics of selling IT solutions in the Middle East. The Middle East region has traditionally been a region of trade through the centuries and hence Middle Easterners have a trading streak in them. This means you should expect bargaining almost as in a bazaar especially with the decision maker.
In the hey days of the oil boom, Middle East may have offered bounties for the early vendors who arrived to sell there. But over time the region has become price sensitive and with increased competition do expect multiple iterations in the negotiation process. In the West you might expect a published procurement process even for a one off large outsourcing deal which will likely be adhered to and there is usually very little beyond the published process. Not so in the Middle East most times.
Now coming to the brass tacks, when negotiating a deal make sure you agree on the ground rules –
The Middle East telco market is characterized by the presence of several group telcos that have operations across the region and in Africa as well – Saudi Telecom, Zain, Etisalat, Qatar Telecom, Batelco, Oger etc etc. So one of the standard lines you will hear when you are engaged on an IT project with any one of them is,
“You have to INVEST in us. Do the deal at no margin or preferably free and the word of mouth will get you deals at other opcos in our Group. That’s when you should make money”
I would retort that at this rate each vendor would have to do 6-7 deals free before they can even start to see any sign of revenues from the region. If you have sold your compelling value then it’s possible to handle this conversation point and make it sound as a very silly suggestion by them. If not it becomes difficult especially if some Mickey Mouse vendor shows willingness to INVEST and do a free job.
TO BE CONTINUED.…..
Dubai Skyline
SMART CONTRACTING IN THE MIDDLE EAST
(This was originally published on IDG Connect on http://www.idgconnect.com/blog-abstract/602/krishna-gopal-middle-east-smart-contracting-middle-east?region=asia)
The first important thing about smart contracting is the difference between technology delivery and contract delivery. In many of the software services companies that I know the delivery director on a project is more concerned about delivering to the technical specifications than to the contract. (Almost as if once contracting is done, s/he will pick out the technical specs annexure out of it and be done with everything else in the document). The difference is vast and is perhaps the key to success in delivering projects, especially in the Middle East region.
Overall, I really don’t know if smart contracting is strictly possible in the Middle East, but over the course of this article I will try to outline some pointers here that may help with the onerous job of negotiating a contract for your company. You will likely find it easier to deal with private companies or those that have stakes from MNCs. They will understand that IT projects cannot be totally boxed in – that there will be scope variations and time line changes, which will have to be paid for. There will be scope for including some defined Change Request clause and there will likely be no pitched battles every time the topic of a CR is raised.
The problem is with government owned entities – Municipalities, Telcos, Utlities, Govt Departments, Hospitals, Oil companies etc. Most of their Contract documents are modelled on civil contracts and have not really been updated to reflect modern day requirements of IT projects. They may engage the services of an E&Y or a PWC to help write the RFP which might look quite professional but come contracting time and they will bring out the old relic. So it may be a good idea to lay your hands early, on a document usually called “The General Terms & Conditions of the Tender”. This will be available with the Purchasing / Procurement department. Get this document and ship it to your Legal team.
Now there are two kinds of Legal people in corporations – those that will always tell you what is not possible and those who will find a legal way to make things possible. Their behaviour is also a function of the stage of life of your company. A growth seeking company will likely have legal teams of the latter kind while a profitability seeking company will have legal hawks of the former kind. Sit with your legal person if possible (or get him / her on VC) and go over the major points in the document and try and whittle it down to one or max two pages of issues that s/he wants to negotiate on.
This is important because customers in the Middle East hate a completely redlined document. Also once the LoI is awarded there will be serious pressure to start work – “Trust us, your money is not going anywhere. Start the work, we have a deadline to keep.” Given all this it’s best to get some head start on contracting. Some of the likely problematic clauses will be – Performance Guarantees, Commitment on Localization, Pre-screening of resumes, Delay Penalty, Maintenance Obligation & Period, Governing Law, Arbitration, Limitations of Liability, Financial Bonds to be submitted, Termination and Step In, Non Compete and Non Disclosure. This should be done in parallel once you get a sense that you are in the top two or three in the RFP process and that there is a real danger (sorry chance) of winning the deal.
In the Middle East the culture is one of relationship and developing trust. In a relationship between supplier and customer, the need to take out a contract signals the beginning of the end of the relationship. Hence it’s important to build deep relationships at the executive management levels and / or at the Board. It is also crucial to set up a formal steering committee to resolve contentious issues during the project implementation. I have seen this to work well especially if the right stakeholders participate.
At the end of the day in the Middle East it’s more Smart Relationships than Smart Contracting that wins the day!
Africa has 54 countries, each different from the other in language, currency, political environments etc- he suggests we go with the mentality of small. He also illustrates that 21 countries are 918MM of the 1.2 billion- eg Egypt, Nigeria, South Africa so everyone of them is not the same. So think small and think different markets- For instance in IT, they dont have legacy, so direct jump to cloud, big-data etc…similarly cables dont exist in Telecom etc, agriculture is big as Indians are buying up land.
His one sentence advice, for African entry: Start small, focus, partner, invest and grow.
His take on China’s Africa takeover- he sees this as nothing new with the illustration of Jordan’s example- 60% of jordan’s economy is Aid- and US uses it to subsidise their own companies who are given the contracts on which the Aid is spent.
His conversation is peppered with insights- such as his anecdote of Chinese ships that offload containers which have person who lives inside the container and as the stock gets over, the container leaves along with the guy.
China vs India in Africa? He believe the Chinese have orchestrated themselves very well, but Indians, despite the $5B in aid India gives, are not organized…..
Not many people merit a byline in a leading business daily when they quit, but Krishna does…
Krishna can be counted amongst the new breed of techno-business professionals who are at ease both on the business and on the technology side…He has a successful track record of incubating new businesses in the emerging markets of Middle East, Africa and India.
At Sify he spearheaded the evangelizing of e-commerce in India during its inception.At Mahindra British Telecom he initially incubated their e-governance initiatives in India during the 1999-2001 period when e-governance was at its inception in India.
Subsequently he incubated their telecom foray into the Middle East and Africa region and grew it to significant revenue levels besides establishing the TechM brand in the local ecosystem as a vendor of choice.
His relationships in the IT / telco ecosystem are deep with all key technology partners, product companies and local companies and adds to jumpstarting the business development process.He has consisently displayed a proven ability to be a brand ambassador and represent his organization in the media, industry events and trade shows.
MEAxpert 