Along with Cambric, we can offer propositions in advanced simulations for a digital factory or new products

Amit Panday spoke to Samir Yajnik on the sidelines of the Nasscom summit in Pune on October 9, 2014.

Tata Technologies is chasing a target of achieving the $1 billion turnover mark by 2017 via organic and inorganic growth. Though organically it will make close to $750 million by 2017, the gap of $250 million is expected to come from acquisitions. What are the areas the company is considering to grow inorganically?

There are three dimensions to this. One dimension is competency improvements. So we are trying to locate gaps and improve upon them and come out with end-to-end, better products. The second dimension is proximity to key customers. In every of these industries (automotive, construction equipment, heavy engineering and aerospace), there are some marquee or key customers that we would like to have on board with us. We also have our own existing customers around whom we formulate our strategies.

The third dimension is territories. If we want to enter into China or Japan, then we will have to work in that direction. Now fortunately, we are able to find something which exists at an intersection point of all these circles. That’s what we will aim to build our competencies, bring in new customers and enter new geographies. For example, the acquisition of Cambric. It gave us the abilities to get into powertrain, strengthen our presence in CV space, enter into construction and heavy engineering, gave us presence in East Europe and other territories in which we were not present.

What were your learnings from the acquisition of Cambric?
After the acquisition, one customer said he was keen to understand how we can solve his problems, which was to make better products, retain talent in India and move up the value chain. I suggested that Cambric and Tata Technologies are one now, and we can invest with you in areas where we do not have a presence. We can leverage the talent at Cambric along with the talent we have here in India. We already have some suppliers at the lower end of the spectrum. There is nobody in the middle or at the front end. I suggested him that with the inclusion of talent from Cambric and our own, we can offer a unique proposition with the front end of the curve, which will help drive his business. By integrating talent from India and from Cambric, we have unique propositions in advanced simulations for a digital factory or conceiving new products for new markets, what we call as product analytics.

The dynamics of talent are very different here as compared to developed markets, so what are your thoughts on talent retention?
If you draw a triangle, talent can be segregated into three parts. At the top are your specialists and system engineers, the leadership guys. In the middle are SMEs and at the bottom, general engineers who work and you want them to get up-to-speed faster. The attrition rate at the lower level is high and I would say that that is not a bad thing as people need to move around, find their groove. The focus is the SMEs and the guys at the top. Our challenge is to retain as people move up the ladder.

Let me map this with what we are doing with Nasscom. We have a general course called the Foundation Skills in Integrated Product Development or FSIPD. It has been launched across India and I believe this is taken up by 500 – 600 colleges. The aim is to make people employable faster. We then have specialised courses on construction and heavy engineering. The idea is to take those at the lower levels to the middle layer, and obviously you become leaders only when you have had the requisite experience. To me, India is evolving in its value proposition.

Talking about the special interest group or SIG formed two years ago, how is that progressing?
The key objective is to develop common practices, themes and address common challenges. We had five tracks that we wish to address. First, the talent track because nobody has given enough relevance to the construction and heavy engineering industry (as compared to auto and aerospace). The idea was to give it an identity and make engineers aware that such an industry exists. That’s going well. We are now looking to kick off the advanced courses and have spoken to JCB and Caterpillar. Both are keen to contribute to it.

The second track was on policies. It is unclear how quickly emission norms, which are driving innovation and compliance, will be enforced in India. The same holds for safety norms and safety regulations. The idea was to document all that and consider if we should lobby with the government or not. Later, we took a decision that ICEMA (Indian Construction Equipment Manufacturers’ Association) do that. The third track is use of technology and the fourth track is about innovation. So I think the ones that are kept alive are technology, forward-looking innovation in construction industry and talent areas. We are also discussing how to develop specific talent for the construction industry, technologies being used to share information.