Inside India's Powerhouse Companies
Via EMTM's Global Experience Program

During a week-long journey through India in early 2006, students in EMTM's Global Experience Program met with executives who are grappling with the enviable challenge of managing compound annual growth rates between 30 to 60 percent.

Traveling to Mumbai and Hyderabad, 20 EMTM students met with senior management at globally prominent firms in the IT, business process outsourcing, life science and pharmaceutical sectors as well as with executives at the National Stock Exchange of India and the Indian School of Business. The diversity and level of corporate visits, most of which were organized by EMTM students, was further strengthened by the participation and insights of several native-born Indian EMTM students.

"It was amazing to have so many really significant companies and their senior-most management team share with us what they're doing and how it's working," says Jeffrey Babin, academic director for the Global Experience Program and trip. "Because we do these visits in the context of a course, we gained tremendous insights into their successes and the challenges they face."

As Vice President of Global Sourcing for Morgan Stanley, Melanie Zairis (EMTM'06) creates and implements an offshore strategy for the firm's retail operations division, identifying third party or internal capabilities that match executives' needs. "Many of the companies we visited rank within the top 20 firms in India right now," she says. "When I spend time with offshore providers in the context of my job, often what I'm getting is a sales pitch. EMTM's interactions with executives in India were more focused on objective issues and challenges. The executives were forced to answer tough questions about strategy."

Lee O. Moss (EMTM'06), Senior Manager, Marketing Integration, Missile Defense Systems with The Boeing Company, concurs, "We got fairly candid, unvarnished insights from the leaders of these companies as opposed to the second- or third-hand rhetoric. The time and energy the senior leadership of these companies put into these visits was indicative of how they value these kinds of interactions."

Coping with Growth

The corporate visits illuminated some of the vulnerabilities that are endemic to India's rapidly-growing economy. "One of the biggest challenges Indian companies universally face is cultivating or hiring middle management to help them scale up their business at their phenomenal growth rates," says Babin, who also serves as a lecturer with the SEAS Engineering Entrepreneurship Program, India country manager for Wharton's Global Consulting Practicum, and managing director and founder of Antiphony Partners, LLC, a strategic consulting firm. "Indian companies need to move beyond the labor arbitrage opportunity of selling high-value services at very low cost. They need to develop domain expertise. By really understanding particular business and industry sectors, they can differentiate themselves among the competition."

Moss notes that, "Companies are growing so fast that they haven't really put the effort into thinking about where they want to be in 10 or 15 years. I came to the conclusion that there's a real opportunity for a firm that wants to be a strategic partner to make it a win-win situation. Because if Indian companies aren't looking past that phenomenal growth of 30 to 40 percent annually, they'll quickly run out of an educated work force and won't be able to sustain those growth rates. There's a wide-open business opportunity to bring some clarity to that challenge through a partnering relationship."

The Global Experience Program helped some EMTM students strengthen relationships with current off-shore providers and evaluate prospective business partners. "Going to the providers' site gives you a different perspective on the challenges they face and what their day-to-day operations look like," says Zairis. "It's one thing to deal with business development and sales folks in the States and talk about moving work offshore, but it's another experience altogether to be on their territory, interacting with their local executives and employees. It definitely strengthens the relationship."

She met prospective business partners during the trip, as well. "This gave me an opportunity to understand the types of skill sets these potential business partners are forming that may ultimately be helpful to us."

Emerging Markets

Pavan Heda (EMTM'06), Portfolio Manager for the Johnson & Johnson division, Consumer & Personal Products Worldwide, says the trip made it clear that, "We're not doing enough in India from a consumer product perspective. Visiting India helps me appreciate why it's among the fastest growing of J&J's emerging markets and also what we can do to focus resources to capitalize on this trend. There's a misconception that the U.S. is shipping jobs to India. But if we want to grow our business in India, we have to hire people there. Local consumer product companies in India are growing at twice the rate of the multinationals because they understand the huge consumer market that's opening up."

Sanjay Phanse (EMTM'07), Vice President at the Bank of New York, found the visits to biotech and pharmaceutical companies to be an "eye opener. This experience made me realize that the opportunities are not limited to the industries or sectors of IT and banking that I've been exposed to in my career so far, and that in fact some of these spaces are becoming very crowded. Other areas such as biotech and pharmaceuticals are relatively unexplored from an outsourcing standpoint. People are beginning to realize that their next employer could be a company from India. As someone who grew up in India, I can see that my understanding of the two cultures could be leveraged into something meaningful from a career standpoint."

"A Different Country"

Heda was also startled by the transformation of Hyderabad, his hometown. "I felt like I was in a different country. It made me think I should go back there for the first time. Now it's on my radar screen to gain all the experience I can here so that I can eventually move back home where my family still lives. The world has changed 180 degrees. Now the big opportunities are over there."

Impressed with India's foray into the expanding knowledge process outsourcing (KPO) industry, Phanse also noted that "The growth of India's knowledge process outsourcing industry will pose a serious threat to entry level jobs in the U.S. for graduates of business schools as investment banks and other financial services firms continue either to build their own captive research units or outsource the work to Indian firms."

"With the globalization of much of the technology sector, it's critical for everybody to expand their worldview beyond the U.S.," says Jeffrey Babin, faculty coordinator for the trip. "This program provides an important perspective on evolving business challenges. I don't think anybody would want to put the genie of globalization back in the bottle. But if you don't learn about it, you may be at the short end of the stick."

In past years, EMTM students have traveled to Germany, China and Japan to gain insights on the global economy. The Global Experience Program was further developed this year into a structured, 1-credit course which spanned EMTM's 2nd and 3rd term, and included pre-trip lectures by Ravi Aron, Wharton Assistant Professor of Operations and Information Management, about India's history, culture, and business environment. Students organized the itinerary, working closely with business contacts and EMTM's alumni network, to ensure that key business and technology issues were addressed at each stop with a minimum of duplication. Upon their return, participants worked in teams, segmented by industry sector, on journals and case studies summarizing their insights.

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