Q. Just why is the CIO of a chemical company interested in India's IT talent pool? 
Your question can be answered in one word: ODC (Offshore Development Centre). The talent available in India is one factor that has brought us here, while cost is another factor. What we have found in India over the last one year has more than met our expectations. The proof of concept was more in terms of managing the ODC. It has exceeded our quality expectations. That is the real quality that the Indian market has. It helps create a much faster cycle time (for our business).

But will you be doing only the low-end work in India? Or will the ODC in India also carry out systems integration activities and other complex tasks? 
We will have a proportion of all work, not necessarily low-end work. Most of it will be confined to application, development, and maintenance. Application development will also help meet our legacy systems needs. But no infrastructure development work is going to come here.

How are you going to develop the ODC? Will you build one from the scratch or partner with one of the IT majors from India? 
We are going to partner with one of India's IT services companies. We are holding discussions with them and are yet to finalise our partner. Work will be confined to the ERP (Enterprise Resource Planning) implementation from SAP, which is the standard for our global requirements. We estimate that nearly 15 per cent of our global IT needs will come out of India in the near future. If we don't reach that figure in the next two years, I think it will be a problem.

Your visit comes at a time when the slowdown is forcing US companies to cut IT budgets. Is cost-cutting the only reason you are coming here? 
I must tell you that I recently had lunch with six CIOs of very large American corporations. Two of them had recently come back from India and were evaluating the benefits of the offshore model for IT services while the three others, I understand, are planning a visit shortly. I think it has to do with the slowdown too. Sure, you also get a cost reduction when you come here.

What is the kind of cost advantages that companies get when they locate their ODCs to India? 
It is easy to get 20-30 per cent fall in costs. But the real advantage is in the good quality and the very, very good responsibility that companies undertake at lower costs. But this centre will be only for our internal use. We are hoping that the company we are going to tie up with is going to have a dedicated centre for our SAP implementation and development work. We are going to examine all models: relationship, joint development centre, and turn-key projects.

Is India going to be your first ODC? 
No. We have been in Ireland for the last 10-12 years. This helped us reduce costs, have access to their expertise, and also their resources. This is what we are seeking to replicate in India. Cost is measurable, but as long as the other factors are favourable to us, we will continue our offshore work. Germany is our largest offshore support centre, but India could take that place in the next two years. The other countries we have ODCs are Australia, Singapore, UK, and Belgium.