A Conversation with Nandan Nilekani, CEO of Infosys
ChiBus Talks Globalization with the Star of "The World Is Flat"
Jason Rosenthal
Issue date: 10/13/05 Section: GSB Life
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Tom Friedman, the well known international affairs columnist of the New York Times, and I have something in common. Other than both being journalist of respected publications, we both have now had the pleasure of interviewing Nandan Nilekani, current CEO of Infosys. Mr. Friedman, who is good friends with Mr. Nilkeni, was inspired by conversations with him to write his latest bestseller on globalization, The World is Flat.
Mr. Nilekani is an Infosys founder as well as the company's acting CEO and President. According to Forbes, he is the 21st richest man in India (not bad!). Recently, he was selected to be one of ten Indian CEOs to accompany the Indian Prime Minister to the United States for a meeting with George Bush.
I caught Mr. Nilekani right before his trip to Washington D.C.
1. Off shoring has been a hot topic in the States. How do you respond to critics that say off shoring is bad for the US economy?
I don't think off shoring is bad for the US economy. Off shoring is a rather straightforward economic concept, driven by the principles of global free trade and competitive advantage. Most economists believe that free trade is a long term positive, as the principle of comparative advantage allow scarce global resources to be allocated most efficiently, in turn benefiting the entire global economic system.
The Global delivery model that has been at the heart of our execution is more than just a way of getting work done offshore. It is a genuine business innovation that delivers a superior value proposition at higher quality and lower cost. By leveraging global resources and global strengths, it creates a new degree of freedom. The increased corporate profitability due to improved efficiencies and cost saving will lead to additional capital available for deployments into new research, product development and other business initiatives that will in turn generate incremental employment growth for both countries involved.
Historically, global competition has forced businesses to continually search for ways to reduce unit costs, whether by utilizing capital as a substitute for labour or using lower cost labour as a substitute for higher cost labour.
Today, technology enhancements are clearly allowing more services to become tradable, which combined with high quality skilled and low cost labour, is making off shoring of services an increasing viable alternative.
2. For those not familiar, can you briefly explain the Global Delivery Model and the history Infosys has had with it?
Mr. Nilekani is an Infosys founder as well as the company's acting CEO and President. According to Forbes, he is the 21st richest man in India (not bad!). Recently, he was selected to be one of ten Indian CEOs to accompany the Indian Prime Minister to the United States for a meeting with George Bush.
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I caught Mr. Nilekani right before his trip to Washington D.C.
1. Off shoring has been a hot topic in the States. How do you respond to critics that say off shoring is bad for the US economy?
I don't think off shoring is bad for the US economy. Off shoring is a rather straightforward economic concept, driven by the principles of global free trade and competitive advantage. Most economists believe that free trade is a long term positive, as the principle of comparative advantage allow scarce global resources to be allocated most efficiently, in turn benefiting the entire global economic system.
The Global delivery model that has been at the heart of our execution is more than just a way of getting work done offshore. It is a genuine business innovation that delivers a superior value proposition at higher quality and lower cost. By leveraging global resources and global strengths, it creates a new degree of freedom. The increased corporate profitability due to improved efficiencies and cost saving will lead to additional capital available for deployments into new research, product development and other business initiatives that will in turn generate incremental employment growth for both countries involved.
Historically, global competition has forced businesses to continually search for ways to reduce unit costs, whether by utilizing capital as a substitute for labour or using lower cost labour as a substitute for higher cost labour.
Today, technology enhancements are clearly allowing more services to become tradable, which combined with high quality skilled and low cost labour, is making off shoring of services an increasing viable alternative.
2. For those not familiar, can you briefly explain the Global Delivery Model and the history Infosys has had with it?