Amir Durrani, Executive Vice President of Projects & Application Services of NTT DATA Services, talks to Gernot Kapteina, Founder of OYSTEC, about building and managing Global Delivery Models in the IT industry, and how Shoring is continuing to evolve in the future.
Amir, thank you very much for taking the time to do this interview. You are one of the top leaders in NTT DATA Services, with approximately 50,000 headcounts of the 130,000 headcounts of NTT DATA Corporation globally. Your level is Executive Vice President (EVP), and you lead a team of more than 15,000 people. What I am interested in is: how did you get to this point - what was your career path like to make that possible?
Durrani: I earned my bachelor's and master's degrees as in chemical engineering from University of Massachusetts Amherst, and University of Minnesota Minneapolis, respectively. My introduction to the IT industry began during my master thesis: the topic of my thesis was "Mathematical modelling of biotechnological processes of wound contraction". Solving that required superpower computers at that time.
After I graduated, I joined Aspen Technology in Cambridge Massachusetts. This company also specialized in the chemical industry. As a software developer I started working with Fortran, C and C#. I was with AspenTech for eight years. Before I left AspenTech I was the Product Manager for their flagship product. I gained tremendous experience working with IT professionals globally. During that time offshore software development was starting to emerge. I was curious about how to set up globally as an organization to make offshore software development model work.
Following this, I joined the California-based company IT Services (ITS) in 1999. This company operated on a strong shoring principle, and at that time only 20-25% of the resources were located in the US; the remainder worked completely out of India. Model very similar to the large Indian companies. This gave me the opportunity to understand the global delivery model grounds-up. ITS was re-branded to Caritor, which acquired Keane in 2007. Keane was a big name in Massachusetts, well known for Program and Project Management. In fact, it was a 700M USD company in 2007 when the acquisition occurred.
After the acquisition I was able to work in London and run the UK business for two years. I returned back to the US and was relocated again, this time to Australia, where I was responsible for the entire APAC business while located in Melbourne. I was also responsible for a large implementation project in the State of Victoria in Australia. Then Keane, as you know, was bought by NTT DATA in 2010. When I returned to the US in 2012, I took over the Global Delivery role for NTT DATA Services.
Your current role is outlined as EVP for “Projects & Application Services". What is this about, what are your responsibilities?
Durrani: My main focus in working for Bob Pryor (remark: CEO of NTT DATA Services) is serving the North American market. What we really do is provide end-to-end application services to our customers. That includes any development work, support and implementations of packaged or customer software. We support North America, EMEA and Asia Pacific out of India. For Japan, for example, we have a dedicated center in Pune, India which is entirely focused on supporting applications for Japan. From Bangalore, we support NTT DATA's EMEA and also serve the local Indian market for the APAC region.
We met for the first time in Tokyo a few years ago. At that time, you were also responsible for the shoring model for NTT DATA Services in collaboration with the Japanese NTT DATA headquarters - i.e., setting up projects and other IT contracts with the help of nearshore and offshore resources. Can you explain to our readers how shoring works in NTT DATA as a prime example of the IT industry?
Durrani: One of the key initiatives we started with the parent company NTT DATA was how to create consistent processes and methodologies across the different delivery units within NTT DATA. As part of this initiative, we created a repository called NCORE, which basically houses all the common processes and methodologies that NTT DATA as an organization uses in relation to program and project delivery. This was a great initiative for us because we had the opportunity to share with people from Japan and from around the world, such as Vietnam, Romania, Spain, Italy and India. We were able to identify best-in-class processes and methodologies that we can implement as an organization for our customers. We are seeing a lot of traction as our global customers are leveraging NTT DATA teams in multiple countries. This is all about best shore for them.
India continues to be the largest offshoring location for obvious reasons: the language and the quality of talent it produces every year. For the North American Market, we have a nearshore center in Halifax, Canada, Mexico, and Costa Rica. For Eastern Europe, we are working with NTT DATA Romania. They have an excellent working relationship with us and provide nearshore support from Eastern Europe.
NTT DATA is a role model for having built a world-spanning shoring network as a very large, global IT organization. But how do you think smaller IT companies should start to develop their shoring networks from a buyers' perspective? For example, a start-up or a medium-sized IT firm in the U.S., Europe or Japan that does not have a shoring supplier yet?
Durrani: There are two parts of this equation when you talk about shoring: first, is the market willing to do shoring? And second, is the market where the shoring is being done capable of providing these types of services? Shoring has matured all over the world. The U.S. has evolved in terms of offshoring over the last 10-15 years. Europe has gone through the same evolution. The good thing is that most customers have realized the benefits of Global Delivery. They are much more open to it.
The next part is how do you get started if you do not have a shoring arm in a country you want to send work. My personal recommendation is to work with a small company that has shoring capabilities and get the engine, meaning the shoring delivery, running through that company. If you partner with a small company that already has shoring capabilities, you can leverage their existing infrastructure to jump-start the shoring services. For example, you do not have to worry about facilities, talent acquisition, etc. This gives the opportunity to focus on developing business and leave the shoring delivery to another company that has the required track record and experience. If you scale and build a customer base, then you need to consider turning it into your own shoring engine.
Nowadays shoring is not a differentiator. The differentiator customers are looking for today goes far beyond shoring: they are interested in business value, in how to change business processes to increase productivity and efficiency and deliver a positive outcome to the end customer.
To what extent do cultural habits affect the development of shoring networks?
Durrani: If you want to leverage a global delivery model, one of the first challenges is to overcome the language barrier. That is why India is the preferred country for offshoring today because all graduates have a proficiency in English. The second is the culture. If you want to be successful in shoring work, you also need to understand the local environment. You need to understand how people think, how they communicate, and how to make them feel comfortable and communicate freely with you. Two-way communication is important, and we must be able to understand things related to culture.
And then there is the matter of the time zone. Many customers in North America, for example, prefer to work with Halifax or Costa Rica because of the closer time zone as it is near the east coast of the United States. Some of the work we do in Agile, DevOps, and more, requires live interactions with customers. And, if our clients expect their delivery teams to be available to them during working hours, a Nearshore presence becomes more critical.
In recent talks, also with the background of NTT DATA being a huge global IT firm, you have pointed out the importance of ‘outcome-based offerings for customers in the IT business’. What is the reason to explicitly address this point; is it not fair to assume that any IT player would try to aspire to this state of affairs?
Durrani: Offshoring was a value proposition 15-20 years ago. But today that is no longer the case: almost everyone is using shoring now. As a result, more and more customers are looking for new types of providers and partners who can now share both the risk and the benefits with them in larger contract constellations. They are looking for partners who understand the business and the business challenges, who can get in the game and be true partners and advisors, rather than "I'll deliver these KPIs, and you'll pay me x dollars a month, and as long as I deliver the KPIs, you'll keep paying." Many clients are moving away from this traditional model.
Even the clients' business itself is changing, of course. The global economy is evolving, becoming more complex, distances are getting shorter. That is where the Outcome-Based Proposition comes in, where we, as a true partner, propose to our customers that there are certain business objectives where we share the benefit with them, and if we do not meet their objectives, we will be penalized for that as well. We have looked at the business processes of various industries and looked at where we can add value for our customers. For health plans, for example, one of the biggest costs is paying medical claims that come from different providers. In this space, one of our services is to improve the accuracy of claims for these customers. For example, in manufacturing we look at supply chain, and inventory management to see how we can improve these business functions for our customers.
When we talk about optimization, we combine application, infrastructure, BPO services, all together. The end product is something the customer can rely on, and our success is closely tied to their bottom line. The industry is moving fast. We are working internally with customers to continue to create these types of outcome-based offerings. Our digital offerings have now been refactored and adapted; accordingly.
India is often mentioned as a typical example of shoring in the context of offshoring, whereas countries from Latin America (such as Chile) are considered nearshore countries for North America, and countries from Eastern Europe (such as Romania) are considered nearshore countries for Western Europe. Will this allocation continue to be the same for the time being, or do you see a new trend toward new shoring regions or countries in the near future?
Durrani: There will always be a need for nearshore and offshore. I indicated that the industry is evolving so that customers are focusing more and more on the bottom line. They do not care how many people are delivering it and from where. There will always be a need for nearshore and offshore centers. The shift is more toward outcome. Customers are looking at the end result. The centers you talked about are great centers; for example, Chile has developed really strong nearshore centers. Costa Rica has also developed very well in a similar way. We will continue to see countries like that in Latin America, and also in Eastern Europe. At one point, Poland, for example, was very popular and still is. Ireland is also very popular for nearshore purposes.
But others are emerging. We will continue to explore new countries for offshore and nearshore opportunities; this is an ongoing process. As a global IT provider, it is our job to review our network annually and make decisions based on customer needs in the form of our own strategy.
We have now gotten very interesting insights from you into the world of IT companies doing shoring. Let me ask you last: Will IT firms always try to shore in the best way possible, or do you think there will be a stop at some point, or even a reversal of the trend?
Durrani: There are four aspects of shoring: at the customer site, onshore, nearshore, and offshore. To be successful in the market today, you have to utilize all four pillars. So, shoring will always be there. Based on specific customer requirements we will always have to define the best shoring model for them. However, I would like to mention that especially in the last few years, there have also been many cases where some of the larger companies in the US have brought services back to the U.S. from India. A good example here is the service desk, where some large US companies have decided to change and move back because of dissatisfaction among their end customers for some areas. NTT DATA Services has also opened an innovation and development center in Nashville, Tennessee. It is more focused on digital transformation and developing emerging talent. There are areas of work where customers are interested in doing the work locally due to the complexity and strategic nature of the project. But I also want to underline we continue to see an increase in demand for resources in India.
Amir, thank you very much for the interview!
Copyright: The University of Minnesota Minneapolis, The University of Massachusetts Amherst, NTT DATA, NTT DATA Services, NCORE, Keane, Aspen Technology, Caritor, and other company names and products mentioned are registered trademarks of the respective companies.
Link: OYSTEC Offering Global Delivery Business Developer