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September - 2009 - issue > In My Opinion
4-Important-Entrepreneurial-Lessons
Bharat Desai
Tuesday, September 1, 2009
The story of Syntel is one of transition and evolution. I moved to the United States in the late 1970s while working for an Indian technology services firm. Through my work as a consultant, I realized that there was a significant business opportunity delivering high-quality programming talent to companies in need of software expertise. I decided to further my education by attending The University of Michigan on nights and weekends, eventually earning an M.B.A.

In 1980, my wife Neerja and I were both in graduate school and founded Syntel (then called Systems International) using our savings of $2,000. We started providing IT staffing services to Detroit-based automotive companies, and earned $30,000 in our first year of operations.

We faced the usual challenges getting the business off the ground – landing our first customers, convincing people to come work for us, and learning new sets of skills like legal, finance, and HR.

We also had to address some of the nagging doubts that every entrepreneur faces, like the questions:

* Is this really what you are most passionate about?

* Do you believe you truly have something unique to offer?

* As a fledgling company, how will you attract large corporate clients?

Answering these questions frankly and thoughtfully brought things into sharp focus, and changed the direction of the company. It became clear that the long-term business opportunity was in ‘taking the work to the people’ rather than ‘bringing the people to the work’. It was then that our mission began to change, and Syntel started to undergo its first transformation.

The catalyst was the revolution in global telecommunications that took place in the early 1990’s, which was a real game-changer for the IT industry. From that point forward, the conventional ‘time and materials’ onsite-staffing model became passé and ‘globalization’ became the name of the game.

As Syntel continued to grow and evolve into a global company, I quickly faced another steep learning curve. I experienced the same stark realization that every successful entrepreneur comes to face at some point or another. I suddenly lay awake at night telling myself, ‘How do we attract the right talent in order to grow the company?’ There are two ways to address this challenge:

* Learn new skills yourself and try to cope with the increased complexity of the business.

* Recognize the need for quality talent and establish a process to attract and retain the best people to grow the company.

For me, the latter one was the clear choice.
In 1992, Syntel opened its first Global Development Center in Mumbai, which signaled the first of two major transitions – first from a staffing business to a solutions business, then from onsite delivery to an offshore delivery model.

What has happened since then has been an exercise in continuous evolution and anticipating trends. From Y2K, the dot-com bust, the push to offshore-centric delivery, the emergence of Web-enabled business services, the growth of Knowledge Process Outsourcing right through to remote infrastructure services, to cloud computing and SaaS, we have tried to anticipate the direction the market is taking and stay ahead of the curve.

Though it may have seemed chaotic at times – simultaneously trying to stay profitable, maintaining the right mix of skills, and retraining our workforce to avoid obsolescence – looking back over nearly thirty years in business, it is clear that several rock-solid constants have taken both Syntel and the IT industry forward. The following are the important ones among them:

*The Path toward Globalization is Irreversible

Syntel itself is proof of this. Today, over 80 percent of our work is performed in India, and we have successfully transitioned our core legal, finance, and human resources functions to India. This makes us one of the very few companies to have successfully made the transition from being 100 percent onsite, and positions us uniquely to help our clients make this journey themselves as they adapt to the new realities of the global economy.

Tomorrow’s entrepreneurs can rest assured that this trend will continue, as clients increasingly focus attention on their core businesses and continue to outsource non-essential functions to improve cost, quality, flexibility, and time-to-market.

*Talent is irreplaceable

From entry-level programmers to top management, you will sink or swim based on the skills and talents of those around you. For example, I recently stepped back from my position as CEO to assume the role of a mentor, coach, and strategic advisor.

In turning over the reigns to Keshav Murugesh, I was able to place my trust in an experienced, seasoned executive who has progressed within the company from CFO to COO and now to CEO. At Syntel we believe in promoting from within, and in continuously training and educating our employees. Over the past three years, the training, retention, and development programs launched by our Global HR Head, Srikanth Karra and his team have made a huge difference to Syntel, and an enormous contribution to our growth.

I believe that investing in your employees not only reinforces loyalty, but also ensures that you have the best talent to develop solutions for your customer problems. It also creates an atmosphere that is collegial instead of hierarchical, which brings out the best in people.

* World-class Infrastructure is Critical for Brand Building

Since we opened our first Global Development Center in Mumbai, we have recognized that world class facilities and infrastructure are critical to building a strong brand to attract talent and customers.

Since we broke ground on our Pune Development Campus in 2006, Syntel has continued to invest aggressively in infrastructure, with the vast majority of capital expenditures focused on our India-based facilities. Syntel has committed to investing nearly $100 million in capital expenditure on our Pune and Chennai campus facilities.

* Customer for Life

One of the first lessons that any entrepreneur will learn is that since landing a client can be so tough, why not keep them for life? Client centricity, superior execution, and delivery excellence should not just be viewed as operational goals or metrics – they are the lifeblood of your business and the path to customer loyalty.

One of the advantages that entrepreneurs and smaller startup companies have is their ability to be nimble and flexible in adapting to customer needs. Whereas other players in our space may focus on a factory approach, Syntel has worked over the years to retain this entrepreneurial philosophy and to tailor our business model to stay flexible and adapt to the changing realities of the global IT market.

Conclusion

Although the business world has changed dramatically in the past 30 years, these four principles have remained constant. If you have the drive, stamina, and flexibility to take on the challenge of running your own business, these simple precepts should serve you well in the long run. They will enable you to think critically and make tough decisions that will keep you and your business going through today’s uncertain and turbulent market and into the future.

Good luck!

The author is the Chairman of Syntel.
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