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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | OCTOBER 20, 2003
Nimbleness, Flexibility, and Persistence They're the qualities that SBA award-winner Himanshu Bhatia says have lifted her IT outfit from a family startup to a globe-spanning success Editor's Note: The U.S. Small Business Administration handed out several awards during its National Entrepreneurship Conference & Expo, held in Washington D.C. Sept. 17-19. Among these were three special advocacy awards given to small businesses that, in the SBA's words, showcase "the vital importance" of America's entrepreneurs. BusinessWeek Online spoke with each of these small-biz champions. This is the final interview in the three-part series. She could definitely lose clients because of it, but the trend toward offshore outsourcing incites neither panic nor despair in Himanshu Bhatia, CEO of Rose International, an IT services firm based in Chesterfield, Mo. If anything, she thinks the challenge is somewhat overdue. "The offshore model -- we've always had that in mind," Bhatia says. "Seven years ago [when the company started], it was still a very new thing. There was a lot of resistance to sending work all the way [to India]. And now, fortunately, a lot of these big companies have paved the way and set the market. Now, it's more of an accepted thing." In a strategic move designed to take advantage of this long-awaited trend, Bhatia's outfit opened its first overseas development office, in New Delhi, just over a year ago. The 50-person operation is the initial manifestation of a new company, Rose IT Solutions, a subsidiary of Rose International. "I think IT is at the maturing stages right now, and India is certainly a very attractive place to get everything done," Bhatia says. "But I don't see a problem, in terms of having enough jobs here [in the U.S]. In IT, there are several high-level positions that will remain here. A lot of the automated, coding-type positions -- call-center operations -- all that is slowly moving there." Bhatia has always believed in diversifying her customer base, and the new branch in India is only the most recent example of that focus. The company started life in the early '90s as Rose Imaging, with a government contract to develop the 3-D medical-imaging software that Bhatia's husband, Gulab, had created. Soon, the pair decided they needed to expand. "It was a good contract, plus, it required R&D," Bhatia says. "We set up the corporation and then a couple years later, in 1995, I wanted to diversify. We felt very strongly that you need to have different clients, so you're not dependent on just one contract or one sector of the economy." The diversification paid off. Rose International, with offices in six locations across the U.S. and its New Delhi outpost, employs 550 people, and lays claim to some major customers, including state governments, federal agencies, and outfits that include Boeing (BA ), Toyota (TM ), and Bank of America (BAC ). The firm did $30 million in revenues last year and expects to top that this year. Rose's success has won Bhatia recognition for her business acumen more than once, including last month, when she garnered a special entrepreneurial award from the U. S. Small Business Administration. Recently, Bhatia spoke with BusinessWeek Online's Lisa Miller about outsourcing, happy employees, and the importance of persistence. Edited excerpts of their conversation follow: Q: Because of the downturn, companies are working harder to integrate the IT they already have, rather than create new applications. How has that impacted you? A: Yes, there is a lot of consolidation going on in the industry. A lot of our clients -- instead of developing new applications -- are wanting to make them internal applications due to cost-cutting, and make them do more. There are more enhancements. The big budgets that they had in the past are not there anymore. So, if you had a certain budget, they're supposed to slash it in half, and a lot of jobs are going offshore. That's the reality. Q: With your New Delhi branch, you're hoping to take advantage of the trend, rather than lose clients to it? A: Yes…but, certainly for offshore, we're always looking for new clients. And some of our existing clients are so big, that it's a major decision for them. They would rather go with a very big company for offshore, because it's [a new] thing that they're doing, and they wouldn't risk it with even a well-known [smaller] player, like ourselves. They would rather go with a very big, established operation in India. So, there are a lot of factors we have to deal with. Q: Your New Delhi arm is going through a special industry-certification process right now. Will that help clients have more confidence in your offshore branch? A: Sending [important] work so far away -- a lot of people hesitate. It's just the initial fear. If we have a certification, it tells them that it's already been blessed.... There aren't too many companies in the entire world that are [certified to the level we will be].... It's quite an investment that we're making, because I feel so strongly that work is going to keep moving offshore. Q: How many of your clients have expressed an interest in outsourcing? A: Quite a few -- maybe about 30% to 40%. Either they're already piloting it in some way with someone, or they're thinking about it, or they've started and they want to be able to work with other suppliers. Q: Are you going to be able to keep working with most of these people? A: We hope they keep working with our company. These are long-term relationships we've had. These are clients we've had for several years, and started with as a small supplier to them and then grew, and so they know us very well. That helps, certainly.
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