I have been involved in outsourcing and running Indian subsidiaries for companies in USA for a long time.

I set up a brand new subsidiary for a software company in Seattle a year and a half ago in Pune India. We currently have 30 software engineers in the office, have not lost a single employee in one year and average salary is $12.5K (3-5 years experience). Although salaries are going up due to demand, in my experience Indian operations are well worth the investment. We operate our subsidiary at 15% of the US cost.

Here are a few things I would like to share –

1. Find right location– forget Bangalore, Chennai, Mumbai and Hyderabad. Too much competition and high cost of living. I have been using Pune as the preferred location very successfully.
2. Make Indian operations part of your global operations – This means constant communication, frequent visits, involving the employees in the big picture. I personally make 4 trips to India each year and spend 4 weeks each time. We have others in our organization traveling to and from India all the time. We use phones, emails, IMs and video conferences on regular basis. Communication is the biggest challenge and it required extra effort.
3. Hire carefully – Our VP of engineering and I personally hired all the employees and we are very picky. We get the employees involved in hiring the new team members. We also have a “buddy bonus” – we are getting great new employees through this program. The quality of work produced in India is as good as the one we produce in our US office – but it takes some time and requires a development process that everyone follows. Unless absolutely necessary, hire local candidates. Family plays very important role and out of town candidates tend to leave if there are problems with family (sick parents).
4. Treat them well – We must treat employees in the India offices well. We offer them same benefits as our employees in the US office. They have Xboxes, parties; flex hours, comp time, cricket team, rewards program and bonus program based on the length of the employment. Although money plays a very important role, many professionals are looking for great company to work for, great technology, on-going training, chance to visit US, great management.
5. Expand over time – We started with small development, QA activities a year and a half ago; today we develop 60% of all our software in India including design and architecture, QA, support (7X24).
Feel free to contact me – Ranjit_mulgaonkar@yahoo.com

- The 1st person to be hired was Head of india office and She was a HR/Admin in Andale. There was something fishy about a HR/admin being placed as the head of an IT/technology company, when this news 1st broke. She never could lead a team of engineers and most of the folks fooled her.
- More the 50% of the employees were hired from Andale. I story one of the employee who was hired was getting salary of 9 lakh and his offer at riya way 17 lakh.
- There were 2 system admin and one of them left. The one who was left bargained with double the salary what he had.
- Munjal and most importantly Azhar use to come to India, but most of them where found in pub and talking about women etc,…
- Munaj and the HR lady started the concept of WORK from home. And the folks freak out big time in bangalore. I know one of them has a alternate business. He use to earn 14 lakh from Riya and runs a Restaurant in Bangalore. well he said me, he works from home. Munjal should understand that work from home dose not work in India .
- I heard that Munjal use to change his business plans over a single day. The way he changed the idea to close the Bangalore office. He hired 3 folks on monday and board meeting was in Tuesday. By Next monday Munjal was in india (Bombay) with Azhar and the HR lady.(not sure what they were doing there . And tuesday they broke the news to shut down the office.

well that all i have to say. Munjal is a good story teller so the less we belive him is good.
thanks

Apparently, though, some Indian companies having been outsourcing some work to China, and Indian workers are moving there. I unfortunately didn’t record any reference URLs, but these are tidbits I’ve read elsewhere in the past year, or received from friends.

That 75% seems to absurd for an average Indian engineer. May be Phd’s and IIT Comp/Electronics grad’s demand and deservce ( may be even more , around 125% of US sal levels period ).

Didn’t people listen to NRN’s comment that he asked his son to keep Stanford/Harvard as a backup if doesn’t get into IIT’s.

Bottomline just because he went wrong in his execution ( the Indian team) he can’t complain that India is not cheaper etc.

As an earlier poster put it, it all comes down to management. Munjal has just demonstrated perfectly well how not execute an India strategy. It is immaterial that he has ethnic Indian background – I have known white Americans who have succeeded in building outstanding teams in India, and I have known Indians who failed miserably. Management, vision, culture, strategy – all of those things matter. Here is a hint: have you enabled a system in which your team in India can operate with complete self-respect and self-confidence?

Software product startups typically require engineers at the higher end of the spectrum, so it’s a different ballgame than the “masses of asses” approach that a larger IT organization can afford As mentioned by some of the posters, esp “Al”, it is certainly feasible to build a very productive and creative sw dev team in India at costs that are lower than the US…

In Riya’s case, the indian engineers with “$75K salaries” had advanced oveseas degrees and competing US job offers (PhD from France for Mr Dalal mentioned in the article and job offers from Google etc). That’s the top 0.01% of the engineers, 99.9+% of the engineers in India get paid much lower. And, salaries are often 20-30%+ lower in towns not named Bangalore (or Bangaluru;).

The WSJ article has generalized the unique situation of Riya’s top tier engineers and some of the news stories triggered from this article (incld some TV stations) seem to indicate the $75K to be normal salary in India.

Here’s the full article if you forgot to renew your WSJ subscription:

http://www.moneyweb.co.za/mw/view/mw/en/page94?oid=144480&sn=Detail