Wipro sells soaps and perfumes…

Having read the following piece (http://publication.samachar.com/pub_article.php?id=6362247) I was reminded that many of the firms that we see in the top rankings of India’s business pages actually started life as something totally different.

Understanding their evolution helps, at least in my opinion, to understand the Indian business landscape a lot better.

There are some notable examples:

For example, as the article states, Wipro actually started off as a consumer goods firm that sold cooking oil and soap to Indians, it was only in 1980 that Azim Premji had his eureka moment and decided to change tack and add an IT business to his group. Subsequently – as we all know – that’s what Wipro’s become known for, but it still stands true that Wipro has a thriving consumer goods business, also.

The other is KV Kamath, who turned a boring development finance agency into a juggernaut in the banking sector. Whilst this doesn’t doesn’t seem to be a major divergence today, in those days it was a huge leap he had to take to make the transition.

My final example is that of Sunil Mittal’s Bharti group, which today is best known for its mobile phone business, but I have no doubt that in a decade or so, we’ll be wondering how he made the leap from telecoms czar to retail guru, with thousands of supermarkets scattered all over India, selling groceries, vegetables and all kinds of stuff that the discerning Indian shopper wishes to buy. Let’s not forget he’s done this before, after all he had a successful venture selling bicycle parts in the 70s and then electricity generators in the 80s.

Of course, we could go into the TATA story just as well, but the point of writing this piece was simply to highlight the fact that these companies have incredible histories, which if you read into and factor into your dealings, makes doing business with them a lot more meaningful.

David Cameron meets Indian CEOs

I’d organised a meeting yesterday between David Cameron, Leader of the Opposition, and a client of ours called ‘The India Group’, which is an alliance of the European based CEOs of large Indian private sector firms. Not only did we meet someone who’s described as our next Prime Minister, he also made sure that William Hague, Shadow Foreign Minister, and Ken Clarke, Shadow Business Minister, both of whom are considered ‘heavyweights’ in the Conservative Party, and should retain their high profile portfolios if they form the next government, attended this meeting.

Cameron was relaxed despite having to respond to the Prime Minister’s Iraq Inquiry statement later in the day. He appeared knowledgable and personable and had, what seemed obvious to me, been briefed appropriately in advance on the key issues that may arise.

So, it’s no surprise that business immigration featured highly with the IT companies leading the charge on labour mobility within the UK in the context of TUPE legislation. He spoke about Ken Clarke leading a review on Whitehall red tape that will help form their policies in advance of the next general election.

On trade promotion in India, Cameron suggested that some of the Regional Development Agencies across England would be put on notice. He recognised that trade promotion in India may also need looking at and the India Group recommended that just as Indian SMEs seemed to be embracing opportunities in the UK, the Government really needed to push British SMEs to do more with India. Banks like ICICI had tried linking up with counterparts in the UK to provide trade finance for their clients interested in India, with not much success, which seems a shame given the scale of the opportunity.

Hague spoke about a better relationship on foreign policy, which all India watcher’s will agree about, especially as Miliband’s visit to India was seen as an unmitigated disaster. Hague spoke of their support for India and Japan for permanent seats on the UN Security Council, which we know China has a different view on.

The Conservative team were interested in the pace of market reforms the new Congress lead coalition would take, to which the India Group agreed that the Insurance sector would probably be the first to have FDI levels increased. What was interesting was that the CEO’s, all, were united in conveying that despite the shortcomings in some industry sectors, India was open for business. It just so happens that the two big sectors that the UK has particular competence in – financial services and retail – are the one’s that have yet to be liberalised. Fair point.

Closer to the hearts of some of those was the issue of personal taxation and non-dom, to which Cameron was quick off the blocks to suggest that had the government adopted the plans they’d suggested, those around the table would have the certainty they desired.

I’ll conclude with sharing how they started as it’s an important point. Cameron emphasised that both – the Labour Party & the Conservatives (a) didn’t really differ on issues concerning India – whether this was trade or foreign policy and (b) that both parties shared the view that Britain was a better place as an open globalised economy, one which market protectionism and restrictive practices were unwelcome.

Outsourcing – Indian BPO firms & public sector procurement

I was invited to be a panellist for a Question Time session at the National Outsourcing Association’s ‘Global Sourcing’ conference that took place today. Around 100 leading practitioners and experts discussed the challenges that the outsourcing sector faces in today’s credit crunch era.

The conference was Chaired by a friend of mine – Mark Kobayashi Hillary – who can only be described as a ‘genius’, who’s authored several books on subjects related to technology outsourcing. As was evident in today’s conference, unlike other “experts”, Mark really does know what he’s talking about. Judging by the quality of the attendee list, he also possesses a fantastic book of contacts.

Back to the conference – which was a new experience for me – I found that everytime someone spoke about off-shoring destinations, everyone really meant ‘India’, despite the fact that companies from other emerging and established economies were present.

I had to field questions on a variety of subjects ranging from labour arbitrage to China but the one that’s still on my mind concerns the monopoly of an established group of vendors who continue to win business in the public sector despite their public failings. Unconventionally, Mark allowed me to ask a question to the audience asking why Indian firms simple don’t factor in public sector procurement. The likes of TCS, Infosys, Wipro are great at what they do, but why haven’t they made inroads into a space that is as lucrative?

I was involved in Government discussions around 2003 when the then Secretary of State famously made a speech saying “A job gained in India does not mean a job is lost in Britain”. Such statements helped in creating an atmosphere in which Indian firms could continue what they did best – unlike what was happening in the US. For this reason, I was surprised to hear that some members of the audience actually thought that the “negative atmosphere” in the UK resulted in procurement officers and decision makers taking a dim view of Indian firms.

Even if you give them the benefit of the doubt, that may have been the case five years ago, but this doesn’t explain why Indian firms (still) haven’t made inroads into the public sector.

I’m keen to learn your views on why companies which are increasingly toe-to-toe against the big boys in the global bazaar, still aren’t getting a look in. Is there a prejudice?, is it because of cultural missundertandings?, are they simply not up to the task? Please leave your comments as I’m interested in improving my understanding.