Illustrator Dennis Balogh

Print E-mail |

Jeya Kumar

How do you address changing customer needs?

Until recently, suggests Patni Computer Systems Ltd. (PTI) CEO Jeya Kumar, companies essentially followed one of three strategic goals: cost leadership, differentiation or innovation. “But now,” he says, “I think we need to pursue all three at the same time across the different customer segments. That’s the challenge business leaders face today.”

Kumar explains that while companies need to innovate in offering new lines of services, they also need to differentiate existing service lines to better compete, especially in vertical markets, and never let up on maintaining cost leadership. In the case of Patni, says Kumar, 54, the Mumbai-based IT outsourcing company is shifting from providing software tool sets and software frameworks to delivering Internet-based IT services tailored to meet customer needs in vertical industries such as financial services, manufacturing, insurance, telecom, and energy and utilities. “This requires a different kind of thinking,” says the CEO, noting that the company has created innovation labs “with the view that in three years’ time, 10 percent of our revenues will come from services we don’t have today.”

Patni reports that it does 98 percent of its business outside India, with about 80 percent of that in the U.S. As for new markets, Kumar is targeting continental Europe, Asia-Pacific other than India, and Japan. “If you look at wages and salaries as a percentage of GDP, Japan, at around 70 percent, has one of the highest rates in the world,” he says. “And if you look at the decline in nonfarm productivity, outsourcing and offshoring are waiting to happen there. So we are investing ahead of time. We already have a management team in place, and we are building up relationships with local companies and will announce a local joint venture — a first for an Indian IT services firm.” — John Boyd