By Sramana Mitra and guest author Sudhindra Chada
Our outsourcing series, begun last year by Tony Scott, continues this year with Sudhindra Chada. Tony’s objective was to examine, through interviews with executives of outsourcing companies in all industries, determine how the very idea of outsourcing has changed, understand the major trends in outsourcing and how they will shape business, and find out what people think about the idea of truly international companies and international workforces and how they help their workforces to develop the mindset and skills to compete on a global scale. Sudhi takes on Tony’s mission to bring to our readers useful insights from thought leaders.
DataArt is a custom software development firm that builds advanced solutions for the financial services, healthcare, hospitality, and other industries. Combining domain knowledge with offshore cost advantages and resource flexibility, DataArt develops applications that help clients optimize time-to-market and minimize software development risks in mission-critical systems. It has software engineers in New York, London, Russia, and Ukraine.
About Alexei Miller
Alexei Miller is a veteran of the IT industry and a recognized expert on IT outsourcing. Alexei joined DataArt as a project manager at the company’s inception in 1997, was elected to the board of directors in 2002 and relocated to New York headquarters the same year.
In 2004, he and Alexander Makeyenkov launched DataArt’s financial technology practice. In his current role as executive vice president, Alexei oversees company-wide customer relations and project management activities.
Prior to joining DataArt, Alexei was a project manager at Tercom, a software development company in St. Petersburg, Russia, where he led several development projects for the Italian telecommunications giant Italtel. He graduated cum laude from St. Petersburg State University with a master’s in mathematics. He is a frequent speaker at international industry events.
Sramana Mitra: Hi, Alexei. Welcome to our Outsourcing series. Would you give us a little background on what you do and what was the genesis DataArt?
Alexei Miller: DataArt is software services company that been around for about 12 years. It was started in New York City by a group of Americans of Russian origin back in the late 1990s. At the time, it was very small but claimed to do everything for everybody, and obviously that kind of strategy was not terribly sustainable. The company survived the crisis of 2000–2001 but realized that it needed to be much more focused and much more determined in terms of strategy, in terms of the clients it served, and so on.
We are still living the decision we made at the time; it has defined our existence. What we are today is a software outsource application development company that has three defining features. Defining as a combination; we are not so naïve as to think that all these features individually are unique in the world. There are many companies in the world that have these features, but in combination they define our niche and make us somewhat unusual in the marketplace. So, those three features in order of increasing importance, are: geography – our engineering base is in Eastern Europe right between Russia and Ukraine, and we have strong reasons to be there and believe it is a very promising region. I am not discounting the advantages and resources that other regions offer, but there are strong factors that give cause to look optimistically at that region for a number of reasons, which we can discuss later on.
The second feature is our exclusive focus on application development and software work, and here there is probably room for outsourcing as a term that has been used in a variety of contexts. Oftentimes when people refer to brand-name outsourcing companies, the Tatas the Infosyses and so on, they mean so many different things, and they often don’t realize what portfolio these companies’ work actually consists of. Our portfolio does not have any call center, help desk, payroll processing, or BPO work. We focus only on technology creation and software creation. As a matter of fact, oftentimes when clients ask us if we will post the system or maintain the system we develop for them, more often than not we will say no. Or, what we would rather say is that that we could do those things, but there is no reason for us to do so when it would be better to have one of many specialized companies in the world do it. What we excel at is creating systems. Hosting them and making sure that the systems are up – these are done by many wonderful companies around the world. This element is interesting because it goes against much of what I see in the marketplace, and more often than not it helps us to explain who we really are in terms of potential and current clients.
The third feature is industry knowledge, domain knowledge. I mentioned earlier that we had this life-altering experience back in 2000–2001 when we had to become a different company in a sense of delivering to our clients more than just smart technology resources, of which obviously there are an abundance all over the world. Every company has its own version of this. Some companies develop specialized processes and claim, sometimes reliably and sometimes less reliably, that they can deliver results on time and on budget almost irrespective of the people and the situation. Some people claim other extras on top of technology knowledge. Our version of this extra is domain expertise in select vertical industries; we believe that for a certain group of tasks, when you have a group of engineers both onsite and offshore that is crucial, offshore included, in building domain knowledge. A vendor can be instantly more efficient [with this knowledge]. We have been building industry-specific practices in financial services, healthcare, travel, hospitality, and a couple of other areas for more than eight years now. It is a long and expensive exercise to live up to what you say you have. It is very easy to talk about this, but it is very time consuming and very expensive to build up the expertise. Only in the past three to four years have we begun to see results, and it is a long road.
Those three features together explain a bit about the philosophy and nature of the company. Just to finish up this part, here are some basic facts: We are headquartered in New York City; about 70% of our client base is in the United States, and 30% is in Europe and is serviced out of our European headquarters in London. We have software engineering resources in Russia, in two offices in Russia and three locations in Ukraine.