Meet Sudhir Singh... the Coforge King

October 19, 2020 | Phil FershtSarah LittleSia Ravari

Watching the rise of the mid-tier services providers - especially in the midst of a pandemic - has been nothing short of impressive.  Firms that got written off a few years ago because "only the top tier only got to the table"... are now at that table.  In fact, I could name several who broke protocol to become sought after partners with reputations for going way above the standard service and regular win engagements against the juggernauts.  Just read our post about the surge in growth for mid-tier IT service providers.

With 50% growth in the last three years, Coforge – formerly known as NIIT Technologies – is no exception here. In the midst of a $600M platform and (in spite of) a global pandemic, they hit the refresh button with a new name that aligned with their identity.  Changing one's name is a brave move, but when your British clients have called you "Nit" for a couple of decades and you have a supercool CEO who plays field hockey and racketball, you just gotta do it...

Within 3 years, CEO Sudhir Singh has led Coforge has taken this firm well past the $500m barrier, so let's get the story behind the strategy, the rebrand, and how the Coforge King sees the industry unraveling...

Phil Fersht, CEO and Chief Analyst, HFS Research: Thank you Sudhir for taking the time today to speak with us. You have recently gone through a rebranding and I would like to find out why Coforge and you decided on a name change, particularly in these economically uncertain times. And a little bit about how you have fared since you have taken over the role... 

Sudhir Singh, CEO and Executive Director, Coforge: Very good to be speaking with you Phil. We spoke about the name change around February when we met in Mumbai. This was an exercise that we were very excited about because all of us had this gut feeling that we are not going to be getting too many opportunities in our careers to rename a $600 million platform. This was a nine-month exercise, which was very interesting for us.

We had several compelling names in the mix. It was the connotation of the name and what we wanted to point out that was primarily important. If you play back some of the names, I think it will give you a flavour of how we approached the exercise. We had very interesting names like Sibyl, meaning a female oracle, and I must confess that that name I really liked, which we found very intriguing as it had a very forward-looking view. There were other names I remember discussing with you, like Boldwave and Brightspeed, which had a strong connotation around looking creatively, innovatively, boldly at the future – which again was interesting.

“Coforge, to us, stands for ‘working together to create lasting value’. That partnership element to all of us… that is well reflected through the partnership across employees. The one thing we’ve always prided ourselves on is that we’ve had the lowest employee attrition across the IT services industry, not just for a few years, but for the past decade.”

And then we had Coforge, which was in some ways the third name in the mix. Coforge, to us, stands for ‘working together to create lasting value’. That partnership element to all of us – the leadership team across the organization and the employee set – was extremely important. And the reason why I say this, is well reflected through the partnership across employees. The one thing we’ve always prided ourselves on is that we’ve had the lowest employee attrition across the IT services industry, not just for a few years, but for the past decade. 

“We also thought that partnering, which is what the ‘Co’ element in Coforge connotes, was very important because it stood for extreme client-centricity. This is what we are known for…”

 We also thought that partnering, which is what the “Co” element in Coforge connotes, was very important because it stood for extreme client-centricity. This is what we are known for, given the best-in-class NPS scores that we have recorded over the years. It also talked about the exceptionally deep partnerships that we have structured, over the years, with the likes of Pega and DuckCreek.

“Summing it up, Coforge stands for working together to create lasting value, working together across employees, working together with clients, working together alongside partners, working together with entities that have come in and been acquired by Coforge over the years, and making them successful.” 

Summing it up, Coforge stands for working together to create lasting value, working together across employees, working together with clients, working together alongside partners, working together with entities that have come in and been acquired by Coforge over the years, and making them successful. We have the stellar record of having almost all transactions done successfully over the last ten years where external teams became part of the Coforge family. That, Phil, is the why part of it.

As far as the why now is concerned, which you talked about, we have been on a very accelerated growth path for the last three years. And, we have also been on a very strong change journey; change when it comes to operating culture, change when it comes to strategy, change when it comes to how the internal and the external world has perceived us. We thought this was a good time, when we have some downtime, to step back, to reflect collectively, to rename ourselves and make that change that’s already been injected into the organisation more explicit.

“In the last three years, we’ve grown from being a $400 million to a $600 million firm. So we’ve grown about 50%. It has essentially been organic growth, the $200 million that we have added.”

Finally, the third question is on how we have fared. The last three years for us have been fantastic, and not just because of the financial metrics. I believe we spoke for the first time three years back. In the last three years, we’ve grown from being a $400 million to a $600 million firm. So we’ve grown about 50%. It has essentially been organic growth, the $200 million that we have added. We now are at a place where – and I have consciously held off on this for the last three years – we are running a huge internal campaign that we are calling a path to a billion. What we have done over the last three years – in terms of making changes, in terms of making sure they hit the road, in terms of making sure they get translated into impact, in terms of financial metrics as well – has now set us on that path. 

We set off on this journey where we said we will not just focus on being specialist technology providers, but we will select a few industries and make sure that we are very good when it comes to translating the applicability of those technologies in the industry context or the client context. That’s paid out extremely well for us… We think that’s what allowed us to differentiate ourselves...

It’s been a very interesting, a very fun ride for all of us, all 11,000 employees across Coforge, over the last three years.”

We’ve also done some very interesting things in terms of making sure that the strategy that we were talking about wasn’t just something that stayed as a talking point but got translated. Three years back, we set off on this journey where we said we will not just focus on being specialist technology providers, but we will select a few industries and make sure that we are very good when it comes to translating the applicability of those technologies in the industry context or the client context. That’s paid out extremely well for us by our estimates. We think that’s what has powered our growth. We think that’s what allowed us to differentiate ourselves. So, it’s been a very interesting, a very fun ride for all of us, all 11,000 employees across Coforge, over the last three years.

Exhibit 1. Coforge’s revenue growth under Sudhir’s leadership  

 

Phil Fersht: Fantastic, Sudhir. That’s great to hear. And, you know, we don’t hear too much about where you came from, Sudhir, and how you ended up running this business. You also have a fairly entrepreneurial family as well. I’ve met your brother Sudip once or twice in the past, and he’s a CEO in a similar industry. Can you share a bit more about your background and why there are services in the family blood right?

Sudhir: Sure. Our dad was in the Indian Army, Phil. We grew up bouncing from cantonment to cantonment, every two years in India, just about every remote and not-so-remote part of India. And my brother and I – and I specifically – went through the same markers that were prescribed for most kids in India growing up. I am an engineer and completed an MBA from IIM Calcutta in 1995.  I joined Hindustan Lever, which was a job that had just about nothing practically to do with technology, and that’s where I spent the first six and a half years of my life. Levers, which is what Hindustan Lever in India was called then, was, and I suspect still is in many ways, the executive training factory for corporate India. Not just technology services, but if you look at the broader Indian corporate space, the firm that’s possibly contributed the most number of CEOs in the Indian corporate space has been Levers.  I found those six and a half years spent in Levers truly formative in just about every sense of that word. 

To give you a quick flavor, I was in sales and marketing, and we used to have this very interesting four-month stint when you joined the firm as a salesperson. You were given about 70 Indian rupees, which was the equivalent of 2 dollars a day, and you had to live in a hotel. In my case, I was sent to this very interesting sliver between Bhutan and Bangladesh for four months, called Cooch Behar, live on it, and sell every day in the markets. As a Sales Manager, I suspect I have personally been to every population greater than 500 people across Western India.

“As I reflect back on them, those first six and a half years [at Hindustan Lever] were extremely instructive. …When it actually comes to understanding the importance of execution and making sure that when one commits to a goal or a strategy, one delivers as a team on that strategy irrespective of change, irrespective of constraints. I think that culture is something I picked up from there.”

As I reflect back on them, those first six and a half years were extremely instructive. There are a lot of things that we all learned about that we talk about over the years. But when it actually comes to understanding the importance of execution and making sure that when one commits to a goal or a strategy, one delivers as a team on that strategy irrespective of change, irrespective of constraints. I think that culture is something I picked up from there.

The second thing that I picked up, and I suspect that stayed with me, has been the emphasis around what today we call client-centricity. In the 90s, in that industry, in that context, it was called knowing the customers of your customer. So, my customers were retailers; their customers were the people who actually bought the stuff that we placed in those shops. Those two things stayed with me.

From there, I had a fantastic nine-year stint with Infosys. I went from managing brands and selling products in rural India straight to the States with Infosys in 2001. I was initially managing one of the marquee financial services clients that they had and subsequently, the payments and the cards service line within BFS. That, in turn, was followed by a six-and-a-half-year stint with Genpact where I was the Chief Operating Officer of their capital markets business. For the last three and a half years, I’ve now been with Coforge, which is the erstwhile NIIT Technologies. So that’s a quick snapshot.

And you’re absolutely right, Phil. Sudip, who is my brother, is the Chief Exec at ITC Infotech. He has also talked to me very fondly about the interactions he’s had with you.

Phil: Oh, good. [Laughs]. There are lots of colorful personalities in our industry, and I think it’s actually been a bonding time, the number of conversations we’ve been having with folks about not just how we’re going to get through this as firms, but also as an industry. I think we have to look at each other a bit, and sure, we compete, but also we have to figure out how we can all take some advice on how to survive together. Providers always want to sell services the way they’re structured, the way their P&Ls are set out, the way they like to go to market. But ultimately, it’s very hard to influence how clients want to buy. Are you seeing a distinct change in this emerging market? Are clients looking to pay for things differently? Are they looking at having greater visibility into the people you have or the technologies you have? Are you seeing things distinctly shifting?

“On the IT side, the interesting change that I have seen over the last six months is what I like to call the ‘try-before-you-buy’ phase. It’s almost the equivalent of a phase zero.”

Sudhir: We are seeing some interesting shifts, Phil, and a few long-term trends getting underlined a little more. I’m sure you relate to that, you hear about that as well, Phil. On the IT side, the interesting change that I have seen over the last six months is what I like to call the ‘try-before-you-buy’ phase. It’s almost the equivalent of a phase zero, where you go in with a certain solution or a POC, or a working prototype, or a piece of IP.

There is an increased preference for getting that working prototype within the client premises – to have it work for a short burst with live client data – to assess whether it is going to work, whether it is relevant, and whether it is going to add value, instead of just being another thing that gets added to the ecosystem. So, I think that has been the most fascinating shift, especially, on the IP side of our portfolio, a ‘try-before-you-buy.’ A phase zero before a phase one isn’t something that we encountered too much before the pandemic came in.

“The other thing that we are seeing, which I think has been very interesting, is that the high-end consulting services, especially architecture services, …is the piece where the willingness to engage with architecture SWAT teams has gone up significantly.”

Another change that we are seeing is ‘the dedicated resource model’, which still occupied a significant amount of the revenue pie across the organization, is getting replaced, especially on the classical development side where more of a capacity-based pricing construct is coming in. Maintenance has seen a stronger pay per ticket kind of model. And the other thing that we are seeing, which I think has been very interesting, is that the high-end consulting services, especially architecture services – that I have always had a very pronounced bias of having people in the here-and-now and co-located – is the piece where the willingness to engage with architecture SWAT teams has gone up significantly. 

I think digital transformation continues to be an ask, not just in travel, insurance, BFS, healthcare spaces, but people are looking for an IT service provider who can be reliable when it comes to the classical delivery and can keep the lights on, manage operations and yet also have the ability to drive transformation at the same time. Now, this isn’t new, it’s always been an ask. But the fact that the delivery has to be robust, and to some extent resilient, has just got a little bit more underscored during the pandemic.

Phil: And do you see a period of consolidation happening in services? I have mixed views on this, in that I think we’re seeing some successful investments in niche companies who can add pockets of value, but not necessarily in these full-scale mergers that we’ve seen in the past. I think with Virtusa, for example, we saw a hefty investment being made by Baring and some other things happening in some of the mid-sized businesses. Do you think that we’re going to see a wave of consolidation, or do you think this is more around investors seeing this as a fairly safe place to park their investment in the next two or three years? Is it more the latter, do you think, or are we still waiting to see how this one unravels?

Sudhir: I think the jury is out on that, Phil, and I suspect the jury has been out on that for the last five to ten years. Investors have made very, very good returns on mid-tier players like us.  I think we are a prime example, just looking at our valuation as an organization. There is a case to be made for both, and you know this as well as I do. On the mid-tier side, my submission always has been that the growth that can be driven as a function of white-glove service customization, so that we can provide customized attention, should command a premium. The speed with which we can change the culture – we can talk digital but change the culture of operating teams – is an asset.

“Investors have made returns – significant returns – on mid-tier players like us. The growth – coming from white-glove service, the ability to transform at speed, cultural aspects that need to be transformed, and now the ability to draw top-drawer talent in line with what tier 1 firms in the past have done – creates very solid case for mid-tier players.”

And finally, I think the big shift that’s happened over the past few years is the ability of mid-tier players like us to attract top-drawer talent, especially given some of the ownership changes that have happened in the background, again has changed.  So, I would say, reflecting back, investors have made returns – significant returns – on mid-tier players like us. The growth – coming from white-glove service, the ability to transform at speed, cultural aspects that need to be transformed, and now the ability to draw top-drawer talent in line with what tier 1 firms in the past have done – creates very solid case for mid-tier players, as well.

Phil: Sudhir, as we look beyond pandemics and things that I think we want to get past, what would you like to say is your one wish you’d like to see in this industry when we get beyond 2020, and we get more of a longer-term view of where we’re going? What’s your one wish for things we can change for the better, that can make us keep the best and the brightest in our business, and make these more attractive and fulfilling careers?

Sudhir: The most important thing for us as the folks operating in industry, that we possibly want to dwell on, is how to make this industry and a career within this industry more aspirational, Phil. Because the talent catchment that we are operating in, increasingly these days, is a talent catchment where the product players also operate. 

“It is not just tech specialization that IT service players like us bring to the table, it is also the industry appreciation. And there can be, for lack of a better word, no stronger consultant to a client than an engineer who understands both the technology and also appreciates the context in which it is being applied.”

It is imperative that, as a bunch of leaders in the industry, we work to more explicitly call out how IT service employees who are creating a career in IT services can actually drive transformation at scale and faster, almost equal to if not more, and drive more impact than product players alone might be able to, because we are already embedded in the businesses, in the organization that we’ve been servicing, for a long time. So the number one ask, at least in my head, is we need to figure out a way to make careers in our industry more aspirational, to explicitly call out the ability to transform businesses that is very unique to us, because we are so strongly embedded in some of these organizations.

The second thing that I think we should start calling out is the fact that it is not just tech specialization that IT service players like us bring to the table, it is also the industry appreciation. And there can be, for lack of a better word, no stronger consultant to a client than an engineer who understands both the technology and also appreciates the context in which it is being applied. So, we need to call that out more explicitly, we need to position that more clearly. Those two things, I think, are the ones that we need to focus on.

I think it’s also a great opportunity.

“IT services, compared to BPO services, have always lagged behind when it comes to equality across genders, for example, in terms of the employee mix. The fact that we can now openly offer more flexibility, the fact that we can now openly offer work-from-home as a semi-permanent or permanent option should also help us address some of those diversity issues that we’ve faced in the past.”

We’ve all been able to step back; we’ve all been able to work effectively and make sure that the work-from-home model, the flexible model that’s come in, allows us to start approaching a broader catchment. IT services, compared to BPO services, have always lagged behind when it comes to equality across genders, for example, in terms of the employee mix. The fact that we can now openly offer more flexibility, the fact that we can now openly offer work-from-home as a semi-permanent or permanent option should also help us address some of those diversity issues that we’ve faced in the past. Those are the three things that I would point out.

Phil: I think that’s fantastic, Sudhir. And just one final question. Why did you ultimately decide on the name Coforge? Was there anything in there that really struck you, that beat out these other suggestions?  

Sudhir: Well, you’re right, I think a lot of it has to finally do with a gut instinct there, Phil. Coforge was a name where we were trying to call out the partnership piece that I talked about; however, we were slightly conflicted around the potential connotations of the “forge” part of it in a technology services organization. “Forge” can have a somewhat old-world-ish connotation. But we liked the “forge” piece because, all said and done, while we do want to drive transformation that is digitally-led, we would like the results of those transformations to create a lasting impact. Hence that was the reason why Coforge won over some of the other names that I remember sharing with you, like Sibyl and Boldwave which, again, were extremely attractive from our point of view.

Phil: Yeah. Boldwave was good as well, I liked that one, and Sibyl reminds me of Basil's wife in Fawlty Towers, which may have been memorable. Coforge does make me think about people forging things together, which makes me think about partnerships. I think it’s a good name. And I’m very pleased to see you guys have found a good path in this tough market to keep your growth story going and keep thinking about the future. It’s been great watching it and getting to know you guys better. I thank you for your time today and very much look forward to getting together with you in person, at lunch or dinner sometime, when we can finally look back on 2020. [Laughs].

Sudhir: I’m looking forward to that, as well, Phil. Very good to see you, and I do look forward to meeting you in person. Thank you so much for your time.

Phil: Awesome. Thanks, everybody ;) 

Sundhir Singh and Jaspreet Singh of Coforge joined by Phil Fersht and Sia Rastami of HFS

Posted in: IT Outsourcing / IT ServicesOutsourcing Heros

Never Miss A Story

Sign up for the HfS Research newsletter and get the best research delivered to your inbox weekly.

1

1 Comments

1 Comments

  1. George Antohi
    Posted Nov 02, 2020 05:45 AM | Permalink Reply

    Excellent article.

Post a Comment

Your email is never published nor shared.