Tata Technologies' American arm has been stepping on the gas in a bid to make some Indian magic in Motown

For the car-crazy tourist, Detroit — historically the cradle of the automobile assembly line — is an important detour. For an Indian company that services the global automobile industry, it is a vital destination. Tata Technologies understands the importance of Motown to the realisation of its growth objectives.

"Our US operations, based in Detroit, are critical to our success," says Patrick McGoldrick, president of Tata Technologies USA, established in 1998 as a wholly owned subsidiary of Tata Technologies Limited (TTL). For a company that provides technology-intensive services such as engineering and design (E&D), and IT-enabled manufacturing, as also ERP expertise to the automotive industry, it is crucial to be where the top American auto brands are. And Tata Technologies USA is working overtime to do more than just be where the big auto boys are, evidence being a client list that includes General Motors, DaimlerChrysler and Ford.

It is a good lead to have in a market that is geared for speed. Car companies are now under constant pressure to introduce new variants in new territories at lower costs. There is an increase in the number of markets, models, vehicle features, and safety and environment legislation. Add to that the fact that the lifecycle of vehicles is now shorter and car companies have a number of tasks on their hands. Which is why it has become important for them to outsource some of their activities. "By working with Tata Technologies our customers remain cost competitive," says Mr McGoldrick.

The Indian cost advantage is not the only factor fuelling TTL forward. What gives the company — carved out of a division of Tata Motors in 1998 — an additional boost is the many miles it has already clocked as an industry insider. "While working for IBM, I searched the world just to find a few people to work on a project for automotives," says Jeffrey Sage, chief operating officer, TTL. "After I came here I found 1,800 domain experts. I remember thinking that Tata Technologies is the world's best kept secret."

With experience amassed over many years as a part of Tata Motors, the company is able to talk the talk and walk the walk. "If you're going to sell to an automotive company, you had better know the industry," says Mr Sage. "We have established ourselves as a very good resource for both engineering and enterprise systems people." Adding to TTL's advantage is the fact that it is a one-stop shop for IT needs across the vehicle-development process.

Auto majors can outsource important chunks of processes such as design, analysis, tooling, manufacturing analysis, factory layout and simulation, 3-D modelling, safety, noise vibration and harshness (NVH) studies, and crash analysis. For some projects, like the one it recently bagged from DaimlerChrysler in Detroit, TTL manages the company's entire engineering IT infrastructure in the city. TTL also offers value addition in the use of its pioneering knowledge-based engineering, which radically reduces engineering cycle times.

TTL directly contracts with the client when providing engineering services. In the enterprise resources space, however, it prefers to be a tier-two player. "We work either through group companies like TCS or Tata Infotech, who require our SAP expertise, or through partners like IBM or EDS," says Mr Sage. As a result, the office in Detroit acts largely as a delivery front, freeing TTL from the need for a large sales force.

Typically, at the beginning of a project more people may be required onsite than offshore. As the workflow settles down, the company increasingly uses resources in India to gain more mileage from lower costs. Gary Maxey, territory head of TTL's enterprise solutions practice, points out that the challenge lies in managing work ratios between the US and India in a cost-effective way. "This is unique to us as companies based in the US do not face this problem," he says. TTL has five exclusive centres for its customers in India.

Cost advantages are as much a threat as an opportunity for TTL. In fact, for TTL competition in the US comes by way of American car companies that have set up captive engineering and design centres in India. Says Sachin Mahuli, territory head of TTL's engineering and automation services, "Most of our customers have an India strategy. They would either like to set up entire operations themselves or enter into partnerships with companies that provide these services."

So far TTL has been drawing benefits from this trend by offering its own expertise in setting up shop for big automotive players. "We had 43 of our people working at the General Motors centre last year," says Mr Sage. "These offshore development centres will end up focusing on highly proprietary work," adds Mr McGoldrick. "The non-proprietary work will flow to companies that can deliver the desired quality at the desired time at an attractive price point."

With timeliness and the quality of delivery being key differentiators, TTL's primary strength lies in its human resources. "It is our people who make the difference," asserts Mahuli. "Whether offshore or onsite, the TTL employee is our face for the customer. How the resources project the company, the way in which they adapt to their new environment, the manner in which they solve issues that crop up and the information they feed us are very important."

TTL has about 150 people in the US. Most of these are professionals hired in India and sent to the US on projects. Of late, TTL has also been recruiting Indian nationals in the US, people who wish to come back to the country after working there for a while. The company also hires locals in the US, especially for the sales and marketing functions. According to HR head Asha Naik, TTL has a specific initiative aimed at attracting the best talent from all parts of the world.

For the resources sent to the US on projects, the company takes special pains to smooth initial wrinkles. "We have two kinds of programmes for them," explains Ms Naik. "One involves the usual integration into the organisation, which helps them with things like finding a house, buying a car, social security, etc. But the more important initiative is technical in nature and this helps our people adapt quickly to the requirements of our clients."

This is vital because TTL has to meet its customers' unique needs in such a way that the work it does for them is indistinguishable from the work the company does in-house. "Every automotive company does E&D in its own way and we have to adapt to their practices quickly and seamlessly," says Mr McGoldrick. This assimilation may even involve issues like cultural differences and communication. Says Steve Stahl, TTL's programme manager in Detroit, "A misunderstanding could arise even in the different use of language. For instance, the word 'doubt' may not have the same connotation in the two countries. An Indian may use it for a question he has in his mind, but it has very negative overtones in the US."

TTL's other challenge lies in being able to gain the trust of its clients. The company has to ensure that its customers' intellectual property is protected and also assure them of its ability to do this well.

Mr Mahuli recalls how the representative of a potential account came to the company's campus in Pune and went around checking doors with his entry card to make sure outsiders could not gain access to restricted areas. To assure its customers TTL has standardised all its information security practices.

Quality of delivery is another area in which TTL has constantly been stepping up its processes and learning from experience. With an engine as fine-tuned as that, it is no wonder that the company ranks high on customer satisfaction. Now it is keenly focused on the track ahead.

"The trend in the US is that auto companies are demanding more safety regulations and emission controls," says Mr Sage. "A company used to be able to design a vehicle and sell millions of it earlier, but these days its is happy to be able to sell a quarter of a million. This means that products are changing more rapidly and hence more design work is required. People want more and more inside the vehicle, under the dashboard, the electronics, etc. That's where the big business will be in years to come."

TTL is now preparing for the next level of the game. It aims to shift to a higher gear by doing entire programmes instead of pieces of the whole product cycle.

"We would like to manage the complete equation instead of getting work piece-by-piece," explains Mr Sage. The company's objective is to increase revenues from all its current clients. It is moving full throttle ahead to boost the percentage of work from the US by 50 to 100 per cent. The road ahead promises to be interesting.