No prescription for innovation, says head of Virtusa
While the world we live today is completely revolving around new technology, innovation and moving in a digital space, there is no set prescription that drives anyone to think in one particular direction. In an organisation creating the right environment with the right people and processes in place, the performance, quality and experience will be entirely different, says Virtusa Co-Founder, Chairman and CEO, Kris Canekeratne.
Kris Canekeratne
In an interview with the Business Times, Mr. Canekeratne made these remarks while sharing his thoughts and views on ‘Creating a Culture of Innovation’ which will be the topic of his discussion tomorrow at the Ray Wijewardene Memorial Lecture to be held at the Institute of Engineers Sri Lanka.
Inventor
A software engineer must always be an inventor and an innovator while creating new things, said Mr. Canekeratne. “No one can force someone to innovate. You have to create the right environment, have the right people and have the right processes in place. Once you have an environment of innovation the performance, quality, experience will be completely different. There is no prescription for innovation,” he added.
Explaining the growth of Virtusa, he said, “A US$ 2.5 billion company, 18 per cent of our revenue is from insurance and healthcare, 55 per cent from banking and finance services, 13 per cent from telecommunication and media, 14 per cent from Internet and high technology. The company’s growth has been 25 per cent year-on-year (YoY). 65 per cent of Virtusa’s revenue comes from the US, 25 per cent from UK and Europe and 10 per cent from Australia, Singapore, Asia and South Asia.” The company operates in over 20 countries and has large infrastructures in India and Sri Lanka. There are around 4,000 software engineers in Sri Lanka.
He also stated, “What’s unique about Virtusa is that we have a global bar and not a local bar to compete with. Anyone from any of Virtusa’s offices knows exactly how they have to perform compared to the best in the world. Virtusa’s Sri Lankan, Indian and US engineers are on top of the leaderboard. They are all competing to improve performance in a transparent environment. It creates a culture of innovation where every engineer tries to improve on what someone else has developed. It’s called a high performance meritocracy. The matrix level of each engineer goes up on the leaderboard at Virtusa, so each engineer knows their performance levels of quality, productivity and defect density. That transparency within the organisation creates a very strong environment for innovation.”
Start-ups
Mr. Canekeratne said start-ups are evolving for various different reasons. The start-up idea at Virtusa is finding ways to innovate to the customers with the right engineers who can actually do the job while creating the culture of innovation. There is a large number of dropouts in start-ups in Sri Lanka because the idea that led to the start-up didn’t permeate over time, lack of capital to move forward and it was not an innovative product. It’s the same anywhere in the world. Only a handful of start-ups get to the point of maturity from hundreds of them.”
Among today’s millennials the whole notion of transparency and gamification is very natural and acceptable way of conducting themselves. Even when they grow up they spend many hours gaming. “At Virtusa software engineers gets the benefit of gaming, but applied to work. You can’t be prescriptive about this. Instead of telling an engineer what to do, tell the engineer what the problem is and look for the engineer to solve the problem, not by giving the solution and asking them to write the code.
Once the engineering team comes up with a solution, they take the ownership of innovation,” he noted.
Across the world there is significant investment going in to creating a digital experience. Banks, telecommunication companies, healthcare providers have been there for around 100 years. But today there are emerging companies built only because of the technology. Everything is done through digital and not through call centres. Future millennials are not going to walk into a bank to open a bank account. If they cannot open a bank account through a digital device, they will invest the money on some other digital platform. This is happening in the US and most of the western countries very fast. Technology is becoming democratised and it’s happening globally. Today banks don’t have completion with other banks, but with another technology start-up that will provide banking services on the digital device.
Digital 2.0
The world of digitisation, known as ‘Digital 2.0’ is not just the experience on the phone but includes artificial intelligence, big data, an experience that is very engaging, cloudification and so on. Every large enterprise anywhere in the world is looking at investing to offer customers a digital engagement platform.
Virtusa has competition from two sides, noted Mr. Canekeratne. One from generation one offshoring or outsourcing companies, that are largely companies based in India that did a lot of work during the entire cost arbitrage era. They are not very well positioned to go after the digital and bridging the analog and digital. As a result those companies are growing between 2-8 per cent YoY. On the other hand there are big consulting firms which do not have the engineering talent. When it comes to creating an innovative engineering culture to build the digital future and bridge the gap between analog and digital world, you need to apply engineering. The consulting firms are growing at less than 10 per cent. Only a very few companies in the industry are growing above 20 per cent, he added.