Centre of gravity of MNCs shifting to India as tech becomes core to business

Centre of gravity of MNCs shifting to India as tech becomes core to business

 

New Delhi, Jun 8: “The centre of gravity of Fortune 500 companies is shifting to India. The future strategies of these companies are being invented here.”
Lalit Ahuja is not being facetious when he says that. Ahuja, who started his career in the Indian Navy before retiring as a Lieutenant Commander, runs a unique venture out of Bengaluru called Ansr that has been funded by Infosys, Accel Partners and others. It helps global companies establish engineering, R&D and shared services centres in India – what are referred to as global in-house centres or GICs. After establishing them, it runs these centres for some time and, once they achieve a level of maturity, hands them back to the parent companies.
One of the first companies he did this for was US retail giant Target. For eight years, he was the head of the centre, built it to significant scale both in the number of people and capabilities, and then got out of it to focus on bringing more such ventures. Among those he has brought in the past three years include L Brands (owners of the Victoria’s Secret brand), Lowe’s, JC Penney, AB (Anheuser-Busch) Inbev, Saks Fifth Avenue, Eli Lilly, Grant Thornton, CME (Chicago Mercantile Exchange Group), and Great West Financial.
“We are currently executing on our 31st JV (joint venture) partner in India and have brought in $1.2 billion in investment and transitioned over 50,000 positions to India since we started our business,” Ahuja said.
MNC GICs being established in India is not a new story. One can trace it back to the time when Texas Instruments set up an R&D centre in Bengaluru in 1985. Since 2000, the pace has accelerated significantly. But in the early years, the work largely involved low-end transaction processing and IT work that could be done far more cheaply out of India than in the home countries.
But today, an increasing amount of the work in the older centres and much of the work in the newer centres are absolutely at the cutting edge of technology. In cloud, in big data and analytics, in mobility, machine learning, artificial intelligence, internet-of-things (IoT), blockchain and robotics. And these technologies – which, going by popular usage, we shall call digital technologies (though the computing industry says digital is as old as their industry) – today are becoming drivers of business, creating new sources of revenue, not just reducing costs or improving productivity.
All biz is tech
“Everybody’s business is technology,” Microsoft CEO Satya Nadella said on a visit to India last year. Citibank CEO Michael Corbat said three years ago that in many ways, Citi sees itself “as a technology company with a banking license.” He said digitisation promises to change everything in banking – make it more personal, efficient, transparent, and accessible, and noted that nearly all of the business and institutional financial flows that his bank moves on an average day is done electronically. Marriott International’s CEO Arne M Sorenson described the global hospitality
chain as a “technology company” in an interview to TOI two years ago, noting how the highly people-driven hospitality industry worldwide was moving to automated check-ins, smartphone room keys and mobile room-service.
As every global company transitions to this intense digital age, India is at the heart of the transition for many. The companies need engineers – many need them in the thousands – to re-do their technology infrastructures and build innovative solutions, and India is the only place where they can get them in the numbers and quality required, and in almost every skillset.