2 Discussion and 1 Research Paper

172

Technology companies and global investors are beating a path to Israel and finding unique combinations of audacity, creativity and drive everywhere they look.1

If you mention a successful startup called Ness Technologies, there

is a good chance that a US listener will assume it is one of those

high-technology Silicon Valley companies. That listener would be

mistaken. Ness Technologies is a multinational information tech-

nology (IT) services corporation, created in Israel in 1999. It is also

the first company in this book that does not have its headquarters

in the US.

This chapter will examine how the Israeli entrepreneurs who

founded Ness dealt with the challenges of a global marketplace.

Within five years of its founding, this Israeli startup became a lead-

ing company in its field with operations in Asia, Europe, and the

Americas. Its rapid rise to prominence has fully justified its name,

which means “miracle” in Hebrew. It did so by melding subsidiaries

in countries with cultures as diverse as Bulgaria and Thailand into

a global corporate culture, with a common set of goals and expecta-

tions that was held across national boundaries.

Demand for IT services resh apes the world

Ness Technologies is a provider of IT services to other compan-

ies. As such it didn’t “invent” any basic technology. Like Ronald

Stanton’s Transammonia, its innovations took the form of a new

7 Implementing information technology across the globe

1 D. Senor and S. Singer, Start-up nation: The story of Israel’s economic miracle (New York: Twelve, Hachette Book Group, 2009), p. 11. This book contains a wealth of information about the Israeli environment for new business building.

C o p y r i g h t 2 0 1 2 . C a m b r i d g e U n i v e r s i t y P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 1/26/2020 4:20 PM via UNIVERSITY OF THE CUMBERLANDS AN: 465765 ; Kressel, Henry, Lento, Thomas V..; Entrepreneurship in the Global Economy : Engine for Economic Growth Account: s8501869.main.ehost

Dem a nd for IT serv ices r esh apes the wor ld 173

business model and new approaches to international service. Unlike

Transammonia, however, Ness operated in an industry character-

ized by the most rapidly advancing technology in history. Even those

who lived through the rise of the computer can hardly believe how

quickly and profoundly digital data processing has changed the way

the world does business.

In just twenty years, between 1980 and 2000, corporations

replaced the river of paper that had carried business forward for cen-

turies with a stream of digital information flowing through wires.

Computers and associated software flooded into offices to handle

all aspects of business, including payrolls, supply management, cus-

tomer billing, and everything in between. This transformation, from

a paper-trail business model to a digitally wired one, required enor-

mous investments in successive generations of hardware. Processors

evolved from big, centrally located machines, accessed with “dumb”

terminals, to networked business computers. When low-cost PCs

became available most employees got their own.

As computers proliferated in every aspect of business, enter-

prises faced an urgent need to implement and manage their software

and communications infrastructure. To satisfy this need companies

began hiring IT specialists to configure and operate their systems.

They soon faced a classic supply-and-demand problem. Because of

the rapid growth in demand, skilled IT engineers were suddenly

in short supply. Predictably, a proliferation of enterprising startups

quickly emerged, offering contracted IT services to help companies

meet the needs of their computer users.

Corporate IT infrastructures continued to grow in complexity

as the technology advanced. Companies found they needed special-

ists to write software, install security systems to control access to

data, and install and configure data networks, to name just a few

areas of expertise. The arrival of the Internet in the mid-1990s greatly

increased the demand for highly skilled IT specialists.

IBM was certainly the giant in the IT services industry

throughout this period, but it was not alone. Many other companies,

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Implementing IT across the globe174

both large and small, provided expertise to enterprises that lacked

the internal skills to design, build, or maintain their IT infrastruc-

ture. Yet demand for IT specialists kept rising – as did the amount of

concern about their cost.

Companies went looking for other sources of supply. They

came to the realization that it was possible to have enterprise soft-

ware developed and configured at lower cost by skilled engineers in

countries with lower wages, such as India. Thus was born the off-

shore IT service model, with India at its center. Of course, the out-

sourcing of jobs from countries like the US and Britain to what used

to be thought of as “third-world” countries attracted a lot of negative

attention. But India’s ascendancy as a nexus of outsourced IT services

revealed a striking new truth about the developing world: countries

that were once considered economic and technological backwaters

were rapidly catching up to Europe and the US, especially where IT

was concerned. They too had IT infrastructure problems that needed

solutions – and they had skilled engineers who could provide those

solutions. In fact, in every part of the world where demand existed,

an army of startups was emerging to provide IT services. Most of

them were satisfied to remain small regional companies focused on

industry sectors important in their geographies.

Some Indian startups, however, built technical teams in India

and sales organizations in the US and Europe to solicit business. A

few startups there and elsewhere ultimately emerged as large multi-

national companies. Ness Technologies was one of these.

Israel: Technology company incubator

Ness, of course, was different. It was an Israeli company, which

prompts the question, why start such an ambitious venture in Israel?

Israel is a small country with a population to match: only 7.5 million

people in 2011. That is quite a contrast to India, which has a popula-

tion of 1.2 billion. And it is a relatively new player in technology. Not

so long ago oranges and flowers were key Israeli exports, not soft-

ware or medical products. Today the country can boast a remarkable

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Dem a nd for IT serv ices r esh apes the wor ld 175

record of technical innovation and entrepreneurship. It was ranked

fourteenth out of 125 countries in the 2011 Global Innovation Index,

published by INSEAD.2 Its economic clout extends far beyond what

its small size would predict. In 2009 Israel exported goods and ser-

vices valued at 35 percent of GDP, ranking it above Germany (34

percent), China (24 percent), and India (13 percent).

Israel developed as a technology powerhouse largely due to the

need to ensure its national survival. It took a sudden French boycott

of defense sales during the 1967 war, after years of close collabor-

ation with French industry, to wake the country up to its vulner-

ability. Because of the boycott, the government decided that it could

no longer rely on the importation of strategic defense products. It

launched a massive program to foster internal industrial develop-

ment and build a technology-based economy.

Trained engineers and scientists are the basis for any tech-

nology sector, and Israel was fortunate in having the resources to

develop engineering talent.

There are several outstanding universities, plus many private colleges.• The country has benefited from the immigration of many engineers and • scientists, particularly from the former Soviet Union.

Young engineers can gain practical experience in technical organizations • run by the Israel Defense Forces, which employ young people during

their mandatory military service.

It is worth expanding on this last point. Israel Defense Forces

draftees take rigorous tests for the opportunity to work on defense-

related product development. When those who are selected leave the

service they are well qualified for an industrial career. Many either

start companies of their own or join existing startups.

Israel’s focus on education and training has produced an

unusually talented and experienced pool of software and hard-

ware engineers. Their presence has attracted many major foreign

2 www.globalinnovationindex.org/gii/main/analysis/rankings.cfm, accessed September 16, 2011.

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Implementing IT across the globe176

corporations to open engineering centers and product development

facilities in Israel, among them, Intel, Motorola, and Siemens.

In addition to its support of technical education and training,

the government has taken an active role in encouraging the creation

of innovative new companies. The Office of the Chief Scientist of

Israel provides modest amounts of seed capital to technology start-

ups that are deemed to be promising. Companies that survive the

seed stage then seek funding from venture capital funds or large cor-

porations. There is a healthy venture capital industry in Israel. In

2009 Israel ranked first in venture capital investment as a percentage

of GDP at 0.43 percent. This compares, for example, to 0.08 percent

in China and 0.2 percent in the US.3

Most Israeli startups eventually get acquired, but some remain

independent and become publicly traded companies. Over 100

Israeli-originated firms are listed on US stock exchanges, the largest

number of any foreign country. Many others are listed on the Tel

Aviv exchange.

With a deep pool of engineering talent, an abundance of entre-

preneurial spirit, a solid legal system, and a history of intellectual

property protection, Israel is a good place to build innovative busi-

nesses or develop products for the global marketplace. So when

Warburg Pincus encountered an opportunity to invest in an Israeli

company, we paid attention.

How Ness Technologies began

Our opportunity to invest in Ness Technologies came through

Morris Wolfson, an experienced American investor in Israeli busi-

nesses, who had acquired a small Israeli IT services company in

1997. He realized that he needed an experienced, professional invest-

ing partner to build it into a major company. We were introduced to

Wolfson through a mutual friend, and began to discuss the idea of

3 Data from NVCA and EVCA, quoted in C. Dickson and O. Shenkar, The great deleveraging: Economic growth and investing strategies for the future (Saddle River, NJ: FT Press, 2011), p. 181.

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How Ness Technologies bega n 177

acquiring several IT services companies in Israel and merging them

to create the foundation for a global business. We had been investing

extensively in IT businesses in a number of countries. Given what

we had heard of the business climate in Israel, we thought this was

an idea worth exploring. So we went on a fact-finding trip there.

Our first step was to meet Raviv Zoller. A former officer in

the Israeli Navy, Zoller was a certified public accountant and the

founder of an investment bank focused on technology businesses. He

was familiar with the IT industry and was working with Wolfson.

He would be the driving entrepreneur of the new venture, morph-

ing from investment banker to CFO of Ness and finally to its CEO.

Zoller had identified five companies with outstanding technology

and established market positions, one of which had already been

acquired. He believed that these firms, consolidated under a unified

management, would provide the core of a leading IT services com-

pany in Israel. Once a solid local base was established, international

expansion would be a real possibility.

We visited each of the candidate companies, met their man-

agements, and reviewed their projects, capabilities, and finances.

Their combined revenues in 1999 were $94 million with a profit of

$7.5 million. They were selected because, taken together, they cov-

ered many of the most important and valuable IT services, includ-

ing enterprise networks, custom software development for defense

systems, and IT system integration for banks, telecommunications

carriers, hospitals, and utilities. Table 7.1 summarizes their size and

areas of practice.

We then talked to their major customers, who confirmed our

favorable impression of the quality of their work and the productiv-

ity of their engineering staffs. We were sufficiently impressed that

we decided to participate in funding Ness Technologies.

Assembling a senior management team was the first step. Over

a period of six months we recruited three senior-level executives to

launch the company. Aaron Fogel, former Director General of the

Israel Ministry of Finance, became the chairman of the board. Yaron

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Implementing IT across the globe178

Polak, a seasoned and highly respected executive who had built a

software company that had gone public on NASDAQ, became CEO.

Raviv Zoller became CFO and Chief Operating Officer.

Putting the pieces together

Merging companies is never easy, but merging five entrepreneurial

companies at one time is best qualified as “Mission: Impossible.”

The fact that it was done successfully is a tribute to the skills of the

management team we had recruited.

We felt it was essential to establish a common culture for the

new company. That would be difficult to do with employees scat-

tered among five facilities. Hence, the initial step in the integration

process was to move most of the 1,690 employees to a single loca-

tion. Fortunately, attractive office space became available in a new

Tel Aviv industrial park, and everybody moved to that facility prac-

tically overnight.

Moving to nice new quarters was the easy part of integration. It

was much harder to decide which managers to retain so we could cre-

ate a coherent business organization to unify the original companies.

As central functions such as finance, personnel, and marketing were

Table 7.1 Israeli acquisitions that started Ness Technologies

Year

acquired Company name Business type

No. of

employees

1999 Gilad Software development and system integration

340

1999 Conthal Information technology services

310

1999 Advanced Technology

Software develop- ment and system integration

650

1999 IPEX System integration 350 1999 IPEX ISI Software development 40

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How Ness Technologies bega n 179

staffed and business units were defined, some managers lost their

jobs, while others were promoted to greater levels of responsibility.

Making such wrenching personnel decisions is always difficult and

disheartening. Israeli culture made it more stressful than usual.

Israel is a close-knit society. As people’s jobs were either threat-

ened or eliminated, their friends and relatives anxiously sought to

talk to me about the situation. They waited for me in the hotel lobby

during my frequent visits to Israel. They told me that the people los-

ing their jobs were actually the best people there, and that Ness was

starting down a ruinous path. Would I not reverse management’s

decision and keep those talented folks in the company?

Of course I could do no such thing. The process of integra-

tion would work only if the company’s investors backed its manage-

ment’s decisions. The subsequent progress of the company suggests

that they picked the right people. It took just over a year to complete

the major consolidation process, after which Yaron Polak left Ness

to become a venture capitalist.

Raviv Zoller became CEO in mid-2001, just in time to tackle

the next phase of the project: leveraging the assembled resources to

grow the company’s market share in Israel, in preparation for inter-

national expansion. Zoller put new service initiatives in place, built

relationships with the biggest potential customers in Israel, and built

the Ness brand – all while making the company profitable.

Ness had a roster of established customers, but it needed to

acquire new ones. It faced fierce competition not just from small

companies, but from big multinationals such as IBM and Accenture.

It won business on the basis of both quality and price against these

formidable opponents, rapidly earning a reputation as a quality

vendor. Soon it had emerged as the leader in the domestic market.

Zoller also demonstrated considerable promotional talent. He

picked former US president Bill Clinton to be the featured speaker

at the Ness annual customer meeting, which he had instituted as a

brand-building opportunity. Clinton was very popular in Israel, and

this event won Ness a great deal of national press coverage.

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Implementing IT across the globe180

By 2002 Ness could count many leading Israeli banking,

industrial, and defense firms among its customers for IT software

and solutions. It had annual revenues of $167 million and a 13 per-

cent market share in Israel, slightly ahead of IBM. It was time to look

overseas for growth opportunities.

International expansion

Ness Technologies was conceived from the start as a global company.

Now it had to execute on that vision. Its strategy was to develop an

innovative business model for international expansion, particularly

into India, that maintained the integrity of regional operations, yet

integrated them into a worldwide resource for IT services.

There were several ways to penetrate foreign markets. One

approach was to establish sales offices in various countries, have

them solicit projects locally, and execute the work in Israel. This

strategy was rejected. It would take too long for an unknown new-

comer like Ness to gain credibility in a new country. Instead, we

decided that Ness’s expansion strategy had to be based on the acqui-

sition of well-established IT service companies in our geographies of

interest. As known quantities, these companies would make initial

market entry easier. We would then enhance their competitive pos-

ition with technology transferred from Israel.

All business is local

Given this approach, it was clear that retaining senior management

in each of these companies was the key to successful mergers. We

knew that acquisition by Ness could hurt a company’s relationships

with local industry, utilities, and government agencies. These cus-

tomers would be concerned about contracting mission-critical IT

services to a foreign provider.

Therefore, the operating paradigm for the acquired companies

was to continue to “look local” while offering, wherever appropri-

ate, Israeli technology as a competitive edge. Each company would

continue to have local management, and we would keep the folks

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Inter nationa l expa nsion 181

who had relationships with customers in place on sales and service

teams. Since these local companies would be Ness Technologies

business units, however, we would standardize operating practices

across all of them as much as possible. This included, among other

things, training and technology implementation. In addition, each

local Ness unit would be able to access resources at other locations

to meet customer needs.

In short, the success of Ness Technologies was to be built on a

network of companies that offered the consistent business practices

and technical resources of a multinational, yet maintained a local

presence with local management in the countries where they oper-

ated. These basic principles drove the company’s later spectacular

growth. Its biggest innovations, however, came about when putting

its principles into practice.

Ness goes global

When the word got out through investment bankers that Ness was

looking to expand beyond Israel, a large number of companies in

various countries around the world quickly identified themselves

as candidates for acquisition. The entrepreneurs who had started

these small companies realized that they were too small to com-

pete against larger rivals over the long term. At this point the only

issue was selecting appropriate acquisitions. Ness narrowed the field

by looking at GDP growth in the countries under consideration to

assess the economic opportunities there.

One of the regions that appeared attractive was Eastern Europe.

This region had developed a number of rapidly growing economies

after the fall of the Iron Curtain. Having analyzed local competition,

the nature of the potential customer base, and the availability of

native talent, Ness focused on APP Group, a company in the Czech

Republic. A startup with 180 employees, APP had received Warburg

Pincus funding when it started in 1990. In the interim it had estab-

lished itself as a quality provider of IT services to the local util-

ities, government agencies, and manufacturing enterprises. It was

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Implementing IT across the globe182

a perfect fit. Through its relationship with Warburg Pincus, Ness

kicked off its expansion program by acquiring the APP Group in

September 2002.

In line with the overall Ness strategy, APP’s senior man-

agement continued to run the business after the acquisition. APP

provided Ness an entry into the whole East European region. It

eventually grew to nearly 1,000 engineers providing IT services in

Slovakia and Romania as well as the Czech Republic.

Off-shore challenges

By 2003 the IT services industry was facing the acceleration of the

trend noted above: using engineers from countries with lower wages,

such as India, to reduce IT support costs. With the cost of local

engineers on the rise, thanks to a growing demand for IT talent in

the developed economies, this had obvious appeal.

At Ness Technologies, responding to increasing customer

demand for cost control became a subject of strategic discussion. Its

opportunity to develop an innovative solution to the problem came

about through another major acquisition, this time of Apar Holdings in

India, another Warburg Pincus investment. Apar was started by Indian

entrepreneurs in 1998. Its business model was quite different from that

of Ness. Instead of having intellectual property of its own, Apar sold IT

engineering services to enterprises on a daily or annual contract basis.

Indian engineers worked for its customers either in India or on location

in the US, Singapore, and the UK. The company had 1,200 engineers,

with a core group of 300 located in India. The others were deployed in

other countries and moved to meet customer demand.

A merger with Apar represented a change from the existing

Ness business model, but added management and engineering talent

in India, and promised access to new customers. We decided that

combining the companies was appropriate, and completed the mer-

ger of Ness and Apar in 2003.

At the time of the merger we recognized that Apar’s business

model had to change. It suffered from a basic problem: when Apar

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Inter nationa l expa nsion 183

engineers were involved in software development, customers had no

assurance of the continuity of staff assigned to their projects. And

since there were a lot of comings and goings of engineers on the

assigned projects, there was little assurance that intellectual prop-

erty would be protected either.

Shashank Samant, a software engineer trained in India but

with extensive international experience, joined Ness as a manager

during the Apar acquisition. He came up with an idea for a totally

different business model: the “managed laboratory.” His idea was to

offer corporate customers their own “managed laboratories” for soft-

ware development, consisting of a team of engineers contracted on a

long-term basis, all located in India. Working together in a dedicated

facility, they would function as part of the customer’s IT organiza-

tion, even though they were actually Ness employees. The customer

would define the software projects, and the head of the managed

lab would report to the customer’s IT department head. Ness was

responsible for training, recruiting, and all employee personal mat-

ters. Customers would get the continuity they needed, and with a

dedicated team reporting directly to the customer’s IT group there

would be more control over IP.

Ness embraced this idea. Samant became head of the managed

lab business, splitting his time among India, the US, and Israel. He

molded the organization and developed the management structure

that made the business successful. The managed lab model proved

attractive to medium-sized software companies in the US and Europe

who wanted the benefit of low-cost software engineering but could

not afford to build their own facilities in India. Ness provided them

with a dedicated staff that operated as part of their organization in

terms of project oversight. To make the service more attractive to

companies who might be interested in eventually operating their

own facilities, Ness also offered an option under which it would

transfer its managed lab staff to the customer.

This model offered clear benefits to Ness, too. First, the cus-

tomer paid staff costs plus a fee for the service, assuring profitability.

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Implementing IT across the globe184

Second, the contractual nature of the IT services made the busi-

ness more predictable. Instead of hiring engineers in anticipation of

potential future projects, the company could plan manpower utiliza-

tion consistent with its current billings.

As a clear “win-win” situation for buyer and seller, the man-

aged lab model was quickly embraced by customers across the US

and in Europe. Ness’s first managed lab customer contracted for 200

engineers in 2003. By 2006 Ness was operating fifty such facilities,

employing a total of 3,000 people and generating $120 million of

profitable revenues annually.

Although the first managed lab was in India, the concept

worked wherever wages for engineers were lower than those in the

developed countries. Ness also used engineers in Eastern Europe to

provide this service to clients in Western Europe.

Cultural considerations

Building the India operation was a lesson in cultural adaptation. As

our Israeli management team did not have an easy time managing

the rapidly growing Indian operation; management talent had to be

recruited locally. It became evident that the key to success was hav-

ing Indian senior management with prior experience in the US, an

appreciation of the local culture, and an understanding of modern IT

technology.

Staffing problems posed another serious challenge. Local com-

petition for talent was (and is) intense. At Ness and similar com-

panies, turnover of engineers in Bangalore, the technology capital of

India, was between 20 percent and 30 percent annually, compared

to less than 10 percent in Israel or Eastern Europe. Such turnover

rates put great stress on the efficiency of an engineering organization

and make training an ongoing headache. In fact, recruiting quali-

fied engineers, even in an increasingly competitive Indian market,

was the easy part. It was much harder to retain the talented ones

in a market where wages were rising at a rate of about 10 percent a

year (much faster than elsewhere) and employers were beginning to

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Going public a nd a fter 185

compete on the basis of fringe benefits, the offer of exciting projects,

and opportunities for personal development. Once good engineers

were on staff, their enthusiasm had to be kept high to retain them

by offering opportunities for professional growth.

The staff stayed young, and increasingly included women with

young children, so special provisions had to be made for them. Ness

became used to providing benefits such as meals, transportation, and

even visits by doctors to the Ness facilities to discuss family medical

needs and provide access to treatment as needed.

Going public and after

After APP and Apar, Ness made a number of smaller acquisitions

to increase its global footprint. International sales and marketing

for all these units was conducted by a staff of 200 professionals.

The strategy of leveraging technology skills globally was showing

results. For example, Ness developed and delivered a novel IT sys-

tem to a pharmaceutical company in Switzerland using engineering

teams from Europe and Israel. Similarly, a global delivery service for

an international law firm was implemented by teams from Israel,

the UK, and India. The service was made possible by a proprietary

information management system, developed by Ness engineers, that

allowed users around the world to share information and work col-

laboratively on projects.

At the end of 2003, Ness had a total staff of 4,300 employees

serving over 500 customers, including Lockheed Martin, Coca Cola,

Citibank, AT&T, Israel Aircraft Industries, the Israel Defense Forces,

Pfizer, American Express, and Czech Telecom. No single customer

represented more than 5 percent of revenues. There was a high level

of customer satisfaction, indicated by the fact that, at the end of the

year, 80 percent of the following year’s business was with the same

customer base as the prior year. Clearly the company’s management

was doing a lot of things right, and it was on a solid footing to con-

tinue its global success.

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Implementing IT across the globe186

By the end of 2003 the company had accomplished a great deal

of what we had hoped to see. Revenues had grown 23 percent annu-

ally since inception, to $226 million. The company was profitable

and doing business in fourteen countries. It was time to consider an

IPO. In September of the following year, the company had its IPO on

NASDAQ, selling $140 million of its shares.

At the end of 2006, Raviv Zoller decided to leave the company

to resume an investment banking career. He was replaced by Sachi

Gerlitz, an executive with extensive international business experi-

ence. By then the company had 8,900 employees and was on a clear

growth path. It was ranked among the top thirty IT service compan-

ies globally by the Brown-Wilson Group, a respected industry con-

sulting firm. Its revenues had increased from $474 million in 2006

to $563 million in 2007. Israeli revenues accounted for 48 percent of

the total.

A business of this type is affected by business cycles. As a

result of the global recession of 2008, revenues declined in 2009,

stabilized in 2010, and resumed growth in 2011 to $620 million. In

2011, the company was taken private by the private equity group of

Citigroup Inc.

Looking back

Building a successful multinational services company is perhaps the

most difficult management task entrepreneurs can face – especially

starting from a small country. Such a business succeeds only if it

learns how to share resources globally while maintaining a common

internal culture and uniform operating principles. It must also adapt

to the cultures of the places it does business without compromis-

ing common corporate goals. Internal regional politics also pose a

threat if management interests are not aligned. Without a common

operating methodology, each region can easily become a fiefdom that

optimizes its business results at the expense of the company as a

whole. An employee reward system must be put in place across the

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Look ing back 187

entire organization that encourages collaboration among disciplines

and geographies.

How the management at Ness was able to avoid the pitfalls

and build a successful organization will reward consideration by any

entrepreneur with global ambitions. Their approach can be summed

up as follows.

Careful selection of acquisitions to meet strategic objectives: adding • desired geographical coverage and skills to the company.

Retention of the most talented senior managers in acquired firms to • help build the local business. There was no attempt to import Israeli

management into overseas locations.

Immediate installation of financial management and control systems in • acquired companies, to integrate them into the corporation and allow

timely and accurate reporting of business activity.

Frequent, prolonged visits by senior Ness management in the various • regions to work with the local staff. In a remarkably short time this

interaction developed a common culture in which international

collaboration was accepted as the best means of generating business.

This effort was greatly helped by an annual meeting where the fifty

top company managers met to review the annual plan. The location

changed each year – Bangkok, London, New York, Bangalore, Prague – so

that local employees had the opportunity to meet company managers

from various countries. Such meetings are a valuable venue for building

personal relationships – over twenty nationalities were typically

represented among the managers.

Leveraging the company’s diverse skills to serve the needs of • international customers in different locations. To further this effort

the company developed proprietary information-sharing technology

that allowed resources throughout the company’s operating regions to

address customer needs.

Rigorous enforcement of a code of conduct – a necessity when operating • in some countries where bribery is a common method of acquiring

business.

Ness Technologies blazed a new path from its very beginning

because its founders designed the company from the ground up to be

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Implementing IT across the globe188

an international enterprise. They used acquisitions to give it a global

reach, and created an innovative business model to attract custom-

ers. The strategy for leveraging Indian talent is particularly note-

worthy in this regard. They also developed approaches to unifying

the company’s operations, creating a common corporate culture, and

leveraging its worldwide resources to serve major corporations.

In the next chapter we will look at how three Chinese telecom-

munications startups, operating only in China, dealt with entirely

different problems.

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