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Sunday, Sep 02, 2007
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Weird ways of making IT happen

Anand Parthasarathy

Technology industry has a strange ‘take’ on fall or rise of the rupee

— Photo: Anand Parthasarathy

TAKING ADVANTAGE: Nayane Gunawardena, vice-president of the Sri Lanka Association for the Software Industry (SLASI), and S. Dharmavasan, MD of the Colombo and Bangalore-based product company Kingslake.

Colombo: There was much weeping and wailing on the Web last week — at least those parts serviced by the Indian Information Technology industry: the rupee was getting stronger than ever. For the rest of us that might have sounded like good news — but not for desi players who scoop up nearly 70 per cent of the global business in outsourced technology services. A strong rupee means a dollar earned fetches around 41 Indian rupees today — where it converted at Rs. 46 or more a year ago — that’s a straight 8 or 9 per cent drop in money earned just this year.

But here in the Sri Lankan capital, the newspapers told a different story. Friday’s issue of Daily Mirror splashed the ‘all-time low’ of the Lankan rupee, close to 114 for the dollar. It was mostly a result of open market economics — but at the first-ever summit of the IT and Business Process Outsourcing industry in the island-State, they were smiling — if not laughing all the way to the bank. Suddenly, global money trends had made Sri Lanka, a slightly more attractive place to do business than India — at least in the short term. Players such as Virtusa and WNS who had IT services operations both in India and Sri Lanka had a small window of opportunity here.

Shift some work from Bangalore or Hyderabad to Colombo — and instead of moaning over dollar profits shaved away, one could count the blessings of a depreciating Lankan rupee. Such are the weird ways of making IT happen these days.

The total earnings of the burgeoning Sri Lanka IT services industry — some $ 275,000 worth — might be less than what Indian giants such as Infosys make in a quarter; but here they pick their technology ground as carefully as a Sri Lankan cricket team honing its strategy: “We are not technology supermarkets — we can never be; so we’ll try to be boutiques, with something special to offer” one local player told me.

One boutique player is turning the outsourcing trend on its head: Founded by Sri Lankan engineer-entrepreneur S. Dharmavasan, long before they coined buzzwords such as BPO, Kingslake is not just competing with Indian players, in the narrow niche of process solutions, but selling them to large entities such as the Steel Authority of India.

Small presence

The company has a small presence in Bangalore and hopes to leverage its presence in both neighbouring nations as a spring board to serve customers.

Kingslake has created solutions specially tailored for the two largest export activities in Sri Lanka: the manufacturing, distribution and logistics for the tea and garment industry.

Greeted by news of the depreciating Lankan rupee, Mr. Dharmavasan just back from a sales swing in Europe is cannily assessing how crisis can be quickly transformed into opportunity.

And much the same thing is being done by lay Indian tourists for whom Sri Lanka is possibly the most affordable international destination today.

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