Product development requires different skills

Updated: Nov 14 2005, 06:00am hrs
Majority of the IT services companies do not have the right resource mix, engineering process rigour or product development pedigree. Nevertheless, IT majors Cisco, Oracle, Microsoft and Sun Microsystems have set up large product development centres in India. Though small when compared to the large enterprise IT outsourcing market, the product development segment in the country is growing rapidly. There is a growing community of professionals who have been involved in product development and have the necessary skills, experience and mindset, says Santanu Paul, general manager, Virtusa (India) Pvt Ltd. The US-based provider of software engineering services plans to significantly expand its engineering team at its advanced technology centre in Hyderabad. Our goals are simple, says Mr Paul: To provide an ideal work environment for our associates and to deliver bottom-line results for our clients, so that both groups realise real ROI in an ongoing way. Excerpts from an interview with FEs Indranil Chakraborty.

How are product management services different from the conventional software services offered by Indian IT firms

Venture capitalists funding small and mid-sized software product companies in the US are insisting on an offshore strategy to keep product development costs low. This helps the independent software vendors (ISV) management focus on marketing and customer management rather than project management and resource management. For starters, product companies work on the cutting edge of technology. They require people who can architect and design products that are extendable, scalable, maintainable and built right the first time.

What are the hurdles in outsourcing product development

Firstly, setting up a captive development centre is an expensive and risky proposition. Secondly, product development requires a different mindset, skills and development process than offered by outsourcing vendors who focus on enterprise IT outsourcing.

Do Indian companies have the skill-sets required to undertake product development

There is a growing community of professionals who have been involved in product development and have the necessary skills, experience and mindset. The segment is rapidly growing but on a relatively smaller base.

Typically, who would outsource their product development jobs to IT companies here

Many medium and small-sized ISVs prefer to work with Virtusa because they do not know the market and do not have the brand name to attract top talent and investments. At Virtusa, many of these product development teams cannot be distinguished from the clients teams. They are treated as part of the clients engineering team they participate in the clients decision making process, qualify for their internal awards and take ownership of product lines and even get paid bonuses if the client does well. ISV clients realise all the benefits of offshoring without the headaches when they move beyond an offshore development centre to a managed development centre.

Is the business primarily driven by the cost advantage

Our clients have started thinking beyond labour arbitrage. They are tapping into a flexible global talent pool and gaining access to Virtusas software engineering processes.

Indian IT firms have never produced a single world-class product. What makes them confident of capitalising on the opportunities in the product development services arena

Success in the software product space is not simply about having the technical abilities to build a better mouse trap. It is about understanding the market, identifying the right requirements, marketing it well and responding quickly to customer needs. Indian companies will eventually get better at taking care of the front-end of the business. However, the presence of some of the best product companies in the world in India means Indians have the capability to build products.

Dont you think specialisation holds key to success in the product development arena

The three major aspects of product development are product management, product engineering and maintenance and package implementation services around the product. Some of the large IT service providers have expertise in package implementation. Over the years, Virtusa has built strong competence in product engineering and maintenance and package implementation. Over the last two years, we have been helping some of our clients with their product management which is high value work and at the core of our clients business.

Jointly participating in product management activities is the ultimate symbol of trust and the holy grail of technical consulting work. IT service providers who want to move upstream into the core business of the client will need competence, experience and trust. This requires higher investment in terms of management mindshare as well as investments in people.

What kind of technical skill-sets are required to offer product services

Product development services can potentially comprise 5-10% of the work outsourced to India. The gene pool is still shallow but the presence of large product companies like Microsoft, Oracle, BEA, among others, will deepen it over the next few years.

What are the plans of Virtusa in this segment

We have built domain expertise in areas such as content management, analytics, business process management, CRM, SCM, storage solutions and e-learning. Hiring the brightest people and training them on complex technologies is only the first step. We are building strong horizontal domain skills on our productisation methodology that helps them think about important aspects like reuse, usability, extensibility, scalability and portability. The idea is to build a multi-skilled engineering force.