India’s Mindtree Discusses Strategy Behind U.S. Delivery Centers

    In my post yesterday about Indian IT services provider Mindtree, and what I showed was a contrived H-1B message aimed at downplaying the company’s increasing reliance on H-1B workers, I mentioned that the contrived messaging notwithstanding, Mindtree has taken the important step of opening its first U.S. delivery center.

    In an interview on Monday, Scott Staples, president of Mindtree’s Americas operation, spoke about that first U.S. delivery center in Gainesville, Fla., and about Mindtree’s plans for future centers. The Gainesville center, which opened on Oct. 1, is adjacent to the University of Florida, and has established a strong relationship with the university. Mindtree plans to open two additional centers within 18 months.

    Getting this far has been tough—Staples said Mindtree is about a year behind where it wanted to be at this time. I asked him what he attributes the delay to, and he said a lot of it has to do with state bureaucracy:

    It just takes a long time to research the appropriate location, talk to state agencies—states don’t move that quickly. It’s very important when you build up a U.S. delivery center that you’re doing it in partnership with a major research university with an up-and-coming town, in a business-friendly state. Once you start talking to those multiple entities, the whole process slows down a little bit.

    I think we made a great selection with our first choice, and we’re in the process now of selecting our second center. We’re already in the research and site visit and second visit phase there, and we’re planning to open up our second center sometime in the fall. When we do that, it will obviously give us the capability and the capacity to hire more local talent and train that talent, and get that talent working, and then we’ll become less and less dependent on the visas.

    Staples said the second center will be in the Midwest, in the Central time zone. The third center will be in the Mountain or Pacific time zone. The first center, in the Eastern time zone, is two blocks from the front gate of the University of Florida. Staples explained the strategy:

    We’re very much tied to the university, and specifically to the engineering school—we even sit on the advisory board of the engineering school now. So we’re very accessible to campus, we’ve got some great recruiting programs going on. The interesting thing that has happened is out of the first 50 or 60 hires, we actually got kids from 11 different universities in the state of Florida. So we are primarily focusing on the University of Florida, but we’ve been very pleasantly surprised by the talent at the other universities. So we’ve got a pretty diverse mix of people coming from universities in Florida. In addition to Florida, we’ve also been able to pull some kids from colder-climate schools. We’ve got a couple of kids from the University of Minnesota, a couple from Rochester—we’re starting to pull from the colder climates, and that’s been a very easy sell. When the operations are more mature and the recruiting teams are a little larger, we’ll be able to pull from a bigger region. But right now we’re very happy with the talent level that’s coming out of the University of Florida and the other universities in the state of Florida.

    I asked Staples what degrees these students tend to have, and he said it cuts across almost all of the STEM disciplines:

    We’re looking for computer science majors, but we obviously will look at electrical engineering and other engineering fields. We’re looking at math kids; we’re starting to hire some business analysts with MBAs, and even undergrad degrees. So it’s primarily STEM that we’re focusing on; we’ve built a focus on the UI/UX [user interface/experience] part of software development, so we’ve got a couple of kids with a little more creative backgrounds. They’re still technical, but they’ve got maybe a digital arts background. So it’s been a pretty diverse set that we’ve recruited for.

    Staples went on to explain the types of work the Gainesville center will be doing:

    We find that doing projects in a near time zone has some significant advantages, in terms of doing projects where there’s a high touch with the business user. We’re doing a lot of agile development out of Gainesville—we see it as an agile center of excellence. We’re doing a lot of mobility work out of Gainesville, as well, because, again, mobility is the type of project where you need a higher touch with the business user, and you need a lot of communication. The same is true with things like business intelligence, where you’re doing report development, where you need higher touch and a lot of communication with the client. Those types of projects fit very well in a U.S. delivery center.

    When I interviewed Staples the first time two years ago, he said, “Our business model is really built upon hiring local people to manage our clients, and have the actual coding and testing being done offshore to keep costs down.” I asked him if that has changed with the opening of the Gainesville delivery center, and he said it’s definitely changing:

    One thing I think is important is it’s not an either/or for us. In our past model we had the ability of doing work onsite and doing work offshore. Now we have the ability of doing work onsite, offshore and onshore. For some clients, that means that they’ll send business directly to onshore, and they won’t use our offshore capacity. But for other clients it means that they may use both. We’ve got actual projects where we’ve got people in Gainesville working on the same project that people in India are working on, and it makes software development a whole lot easier with that model. So it’s not really an either/or—it’s more of an a la carte, where we give our clients the ability to really choose where they want the work to be done. And a lot of that is based on talent availability, skill sets, price, all of that kind of stuff.

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