How NIIT is surviving the downturn

The sliding rupee traditionally benefits technology companies in India but most companies don't quite like forex swings and volatility to hurt their projections.

With the slowdown well entrenched, India Inc is faced with some serious questions about recovering their markets, planning new strategies and exploring new business growth streams.

NIIT Technologies continues to show resilience despite the weakness in the West. The tier-2 IT services company reported sustained order flows and employee utilisation as well as moderate attrition rates for the June 2012 quarter. CEO Arvind Thakur about how they are surviving the slowdown.

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Bucking the slowdown isn't easy and most companies are now under pressure to think beyond the obvious. How is NIIT Tech doing that?

Every firm has to look at the opportunities available in this time of crisis and we are trying to identify growth segments to buck the trend.

There are new impulses, we just need to look for them. As a company we are quite sharply focussed on chasing new areas.

The focused approach to address select industry segments has resulted in sustained growth with the travel segment demonstrating maximum traction, now contributing to 40 per cent of the revenues.

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During the quarter $83 million of fresh orders were secured, leading to $ 240m of executable order book over the next 12 months. How are you evolving strategies and are you seeing a shift away from banking to other segments of business?

Our business drivers are changing. Some traditional business drivers have become challenging and although they remain a large part of the business. Look at the banking sector where the large banks have a big challenge world over.

The opportunity is coming from tier-II banks. We are now exploring new sub-segments of banking and insurance to grow. Some segments like travel will continue to grow and bring business.

We need to get down to identifying customers that will sustain their business and revenue growth. What's also bothering IT firms right now is the rupee. For those who have not hedged against its drastic drop. Unless there is flow of dollars into the country, the currency will possibly remain weak.

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What does leadership mean to you and how is it coming under pressure during the slowdown?

Leadership is about aligning the team to a superior vision. I believe a supervisor's role at any level is not to supervise but create a superior vision.

Teams aligned to a vision deliver dramatic results. In a fast changing world there is much to learn for the leader from the team itself. The leaders role is that of a coach and guide.

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What was the turning point in your career?

Meeting Rajendra Pawar in the mid 80's when he founded NIIT along with his batch mate from IIT Delhi, Vijay Thadani. He had an exciting vision of transforming the country's technology landscape by bringing people and computers together.

I joined his start up in 1985 and have not looked back since. Along with my colleagues at NIIT, some of whom have moved on to pursue other exciting opportunities; we have witnessed and participated in the fascinating growth story of India's IT industry.

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How did you land your first job?

After graduating from IIT Kharagpur, I pursued post-graduation in Industrial Engineering at NITIE in Mumbai. It is here that I secured my first job when public sector giant BHEL visited our campus for placement.

From among the students of our batch who joined BHEL is the current Chairman Mr. B.P.Rao whose entire career has been with the company. For me the stint of 5 year sat BHEL was where I got firm grounding in technology before moving on to explore the exciting promise of IT.

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How did NIIT Tech start and how did you get on board?

NIIT Technologies was spun off from NIIT Ltd in 2004. I was with NIIT Ltd before the company was spun off as President of its Software Business having performed various roles in operations, general management & organization development. Post the demerger the software division was spun off into a separate listed company called NIIT Technologies Ltd and I was appointed its CEO.

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Your started your career at a time when reforms were hardly moving ahead. How was that struggle?

Struggles in the earlier career arose from working in an environment where reforms had yet to take place. The country was experiencing a severe foreign exchange crisis and businesses were subject to all kinds of control. Imagine a world with controls on money and no credit cards. That was the environment in which we were building our international business.

The struggle was only in the early years when reforms were not in place and the software industry had not matured. I recollect a period when we were putting together a business in the late 80's to launch globally renowned software products in the country.

Importing software was a challenge as foreign exchange was precious, but even worse, the market did not perceive value for software as it was bundled with hardware. The perception was that software is free. It required serious marketing innovation to develop this segment. We had to change the perception that software is free.

To do so we ran a campaign providing free hardware with software. This was hugely successful and a pioneering effort in that period. While it is well known that NIIT pioneered computer education in India, what is little known is that NIIT Tech also pioneered software product distribution in the country. Every challenge can be addressed through innovation.

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When did you start golfing and who introduced you to the game?

It started about 17 years ago with a few formal lessons on the swing by the local instructor at the NOIDA Golf Course and some practice at the range. It was only after Hemant moved to Delhi from Calcutta that I became regular as part of his 4 ball which developed my game.

What is your current handicap?

Nineteen on the club board, but would have slipped as seems evident from recent form.

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To date, what are your proudest golf accomplishments?

Have participated in many corporate tournaments but the most enjoyable are the ones organized by my alma mater from school and college.

A proud moment was being part of the winning team which won the trophy for IIT Kharagpur at an event organized by the Alumni Association a few years ago. Another great moment was securing top individual honors at a friendly organized between the Delhi and Jaipur chapters of the Mayo Old Boys Association.

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What is your biggest golf pet peeve on or off the course?

The magnetic effect of water bodies on golf balls.

You have set up a unit at George, near Augusta Natoinal, where the famous Masters tournament is held?

The Augusta National, a very exclusive private club and home to the famous Masters tournament.

Ever since NIIT Technologies set up its onshore low cost delivery facility in Augusta, entering the hallowed gates of this course has been a desire. This summer the club opened its door to the public for a short window of a month and so if the timing is right this desire can become reality.

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