Hexaware Outsources its IT Costs to an Infra Management System

Nataraj is your dyed-in-the-wool entrepreneur CIO. He’s the kind IT leader that gets business heads turning when he talks because he looks beyond using IT as an enabler or as a business driver. He wants to employ IT to bring in the money.

At Hexaware, as he took his daily routine in his stride, he scanned the company looking for opportunities to sell existing expertise. He studied Hexaware’s 15-year-old business and figured that its strengths lay in high-end designing, ERP implementations, and infrastructure management. That gave him an idea. “With Hexaware’s strengths in mind, I looked for the best way to create a business that was aligned to our organization,” Nataraj says. Natraj’s business sense pointed him to infrastructure management. Soon he found a way to pull the idea’s potential from the air in two groups: the STG, or the Systems Technology Group, which takes care of the company’s hardware, software and networks. And the ISG, the Internal Systems Group, which is responsible for Hexaware’s numerous applications. What he found in these two groups, he says, is a competence which he could translate into a whole new business that offered infrastructure management.

Getting the Details Right
Under Natraj’s leadership, the new business unit took shape quickly. Within six months Hexaware’s new Infrastructure Management Services (IMS) was operational. Despite a long checklist of things that needed to be done including arranging office space and launching a website, Natraj focused on putting together a crackerjack team. He commandeered 35 staffers from STG and some more from the Internal Systems Group. His team’s credentials are hard to beat. The professionals from the STG, for example, were already looking after 6,500 desktops and 1,000plus servers, among other pieces of infrastructure.
What might seem like a shortcut to team-building, however, also had its share of challenges. Building his team from in-house talent brought up new questions: who did the team owe allegiance to? How would he deal with the inherent risks in getting them to embrace their new identities? How were salaries going to be apportione

The team also needed training. Natraj says educating his new unit in communication was his biggest challenge because the dynamics of providing service to external customers was very different from what they were used to. “If we were not comparable to others in the market, our clients could always discontinue their contracts,” says Nataraj.

Fortunately this was an area that Natraj, with his background in marketing, understood well. He led his team out of its cushy IT comfort zone into business’ cutthroat arena. With his team in place Nataraj was faced with every entrepreneur’s bête noire: making money. “A new business unit — even one based on a sound concept — is not assured business. And we launched at a hard time when even the best businesses are  facing trouble.” This is the point at which many entrepreneurs stumble. They’ve read the glossy magazines urging them to take more risk, they ready themselves to make the jump, they leap — and land hard. Looking for ways to make money, when none seem to exist is one of the scariest bits of being a business man. Natraj, however, did not falter. He turned around and made Hexaware one of his customers using a shared-service model.

A smart move it turns out. Since Hexaware ‘outsourced’ some of its IT needs to IMS, Hexware’s own IT costs have fallen by almost 60 percent. “That’s because most of the cost of Hexaware’s IT was human resources and now that’s been pushed to IMS,” says Natraj. Since then Nataraj has acquired several other clients, including one of the world's largest private banks and a big insurance brand in the US. “As a business unit, we have already broken even and have been reporting profits,” says Nataraj.

Today, IMS is 150 strong and is contributing to Hexaware’s bottom line. And it’s won the respect of tough, veteran businessmen. “The IMS practice is extremely important to our service offering. It gives us an end-to-end capability,” says R.V. Ramanan, president global delivery, Hexaware. “We already have proven capability in software development, testing, business intelligence, ERP and BPO. IMS completes our service portfolio. It has significantly enhanced our go-to market approach and our ability to service  our customers.” Although he is reluctant to share revenue numbers at this stage, Natraj says that IMS is targeting about $10 million (about Rs 45 crore) in the next year. “With the demand for IMS growing the target should not be difficult to meet,”  he says.

The Person Behind It

N.Nataraj

CIO, Hexaware Technologies

With Hexaware’s strengths in mind, I looked for the best way to create a business that was aligned to our organization