Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 8)

Sramana Mitra: There is another trend I’m tracking that I would like your comments on. There is this notion of multiple supply chains developing in the software outsourcing world among large enterprises, large banks in your case, or large medical insurance companies, and so on. Clients are working with their primary outsourcing partners, wherever they are, like the tier 1 suppliers. Then for specialized expertise these tier 1 suppliers are bringing in the tier 2, tier 3, more mid-market outsourcing vendors for specialized expertise. Is that something that you have seen, or have you been brought into clients by other tier 1 outsourcing vendors? >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 7)

Sramana Mitra: I have a couple of follow-up questions to what you said. What other companies do you see in deals? When you are competing for a particular deal, what kind of competitors are you seeing? >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 6)

Sramana Mitra: That is the most competitive part in every region. We are seeing getting that talent is the most competitive part of the value chain. How do you compete in that space? >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 5)

Sramana Mitra: So, are you doing quantitative analysis for hedge funds and banks and work like that as part of your offering?

Alexei Miller: Not exactly. We are doing a software system that works with those models. What we found several years ago when we explored that particular market was that this is the kind of work clients are extremely protective of. If we are really talking about quantitative models, for example, pricing processes or trading models at banks or hedge funds and so on, even if they agree to outsource this to anyone, they will ring-fence the group that will do this for them so tightly that the group is for all intents and purposes lost to you as an outsourcing vendor. It is a one-off type of deal. There is very little repeatability; there is you can learn from one experience and carry it over to the other. That in itself is not a very scalable business. So, what we do is we develop those software systems that work with those systems, for example, various modeling services. In order to do this you need to understand the math, you need to understand the models, but you don’t need to be a mathematician yourself to create those models. >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 4)

Sramana Mitra: And when you talk about this domain knowledge, where does it begin? Are you getting involved at the business analysis level or functionality specification level, or are you coming in more at the implementation level?

Alexei Miller: We try to get involved in the architectural level. It is quite popular among outsourcing companies to call themselves consultants and for them to claim that they would be involved in a business strategy, the business transformation stage of the idea of the systems. I am quite skeptical about this claim, not because it is impossible to do but because I think it is an exceedingly rare skill, and a company that does it in a systematic way can be extremely, extremely successful. But the truth of the matter is that there are so few companies out there that can do it, and typically when the company is good at this strategy aspect, it is not good at everything else. So, we are very much aware of the fact at we are very good at system architecture, systems definitions and implementations, obviously, and we do like to get on board early when the client is considering how to do things, determine how this system is going to be used, and so on. But we are not trying to, as they say – there is a saying in Russian – trying to run ahead of the train. We are not trying to run ahead of the train in the sense that we will be telling a client how to run their business. We are at this end very ready to understand what they are talking about when they are ready to talk about it. >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 3)

By Sramana Mitra and guest author Sudhindra Chada

Sramana Mitra: How do you identify this kind of group of people, [who will stay with you and build the company]?

Alexei Miller: We search for them. We have very strong managers in Russia and Ukraine who are scouting different regions. They go and meet people at conferences, or hold events where we discuss DataArt and our culture. Usually at those types of events and as a result of local media coverage, certain people react, certain people get in touch, and then we start to do things together. We have a variety of internal programs where we can try out a few groups of people. When the opportunity presents itself, we typically have a choice. >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 2)

By Sramana Mitra and guest author Sudhindra Chada

Sramana Mitra: That gives me a way into drilling down into what is going on in Eastern Europe: Russia, Ukraine, Croatia – these countries have emerged as major software destinations. Would you talk more about that part of your strategy? How many people do you have in each of these locations; what are the reasons behind choosing the locations you have chosen; what are the competitive dynamics for talent in those locations? And, especially when you look at that what is going on in India, for instance, where the competition for talent is very high and attrition rates are also very high, would you talk about the dynamics of what is happening in Eastern Europe and Russia in particular? >>>

Outsourcing: Alexei Miller, Executive Vice President Of DataArt (Part 1)

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.

About DataArt
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? >>>