An emphasis on karma

LUNCH WITH BS/MphasiS CEO Jerry Rao

Jerry Rao may have been a software entrepreneur for the past few years, but the banker's instincts have not deserted him. We have just come to the end of a lunch consisting of a clear vegetable soup, steamed rice and mixed vegetables with gravy, almost too simple a repast for the tony Schezwan Court of The Oberoi in Bangalore.

"Do you pay, or do I," he asks, adding quickly, "just joking", in case I thought he wasn't aware of the rules governing a Lunch with BS. Right now, though, banking is the least of this former Citibanker's concerns.

As chairman and chief executive officer (CEO) of MphasiS, the Rs 430-crore Bangalore- and US-headquartered software and business process outsourcing (BPO) outfit, he is working on identifying what he calls a "new paradigm in the outsourcing arena".

And when he's not doing that, Rao tries to live a world-view shaped, he says, by poets like T S Eliot, and teach mathematics to children at Sujaya Foundation, an NGO run by his wife. Or he's voraciously reading books about the Internet, technology, strategy and financial services in the course of his peripatetic travels around the globe.

The quirkily-spelt MphasiS represents Rao's second coming. As Citibank's India country manager in the mid-1980s, he attracted attention for his prescient efforts to create a retail banking base "" through consumer loans, ATMs and so on "" at a time when the received wisdom for foreign banks was to focus on triple-A rated corporate clients.

Today, Rao remembers his Citibank days with affection. In a career spanning over two decades with Citi, Rao served in various capacities in five continents "" including divisional manager for consumer banking in India, west Asia, eastern Europe and the UK; head of the development of Citicorp; and chairman and CEO of Transaction Technologies Inc (TTI), based in California.

"My 25-odd years with Citibank global offices were excellent. It is one of the few banks in the world that recognised early the importance of information and managed it effectively," says Rao, adding, "I had the joy of working with impeccable people right through my career at Citi and I really treasure them."

The obvious question, of course, is how he managed to survive so long in an organisation that was famously overstaffed with over-ambitious employees. It had clearly affected Rao, enough to seek his father's advice.

As he remembers, "It was pretty obvious that when you spend so much time in an organisation, you get to be in contact with a few who really annoy you. I spoke to my father on this issue and he taught me to understand that I should not take it personally. That person is nothing but a tool and you will rise above the day-to-day bickering in an organisation to fulfill your agenda."

Like all big organisations, though, there was a downside. "The closer you get to the head office of an organisation of such mammoth proportions, the more bureaucratic it gets," he recalls.

"Moving into the top-50 managers' segment was relatively easy, but making that next leap into the top-10 bracket would have taken me another 10 years and my growth was plateauing."

His assignment at TTI, however, provided an opportunity to think of other things. "Being in charge at TTI, I was giving out contracts for IT outsourcing to so many companies, including Polaris, that many people were telling me, why couldn't I be that entrepreneur on the other side who could take a part of that business and run my own firm. This was one of the aspects that made me leave Citi and start MphasiS in south California," he says.

Not that disengaging from Citi was simple. The exit interview took a full two hours. His boss was worried that he was moving out for monetary benefits. "I had to reassure him that I was moving on more to satisfy the urge to be an entrepreneur and not for anything else," Rao remembers.

MphasiS, of course, meant starting from scratch and the going wasn't easy. "We were one among the hundreds of firms that were trying to make their mark," he recalls.

So how did MphasiS make it? It's all karma, Rao insists philosophically. "You will never believe a man if he came back from the dead and explained what the experience was all about. One has to go through the full-blooded experience of life and bear the fruits of one's own action," he says.

And "full-blooded experience" it was. At the time, Rao recalls, the firm wasn't winning large projects ("we didn't have the scale"). "It was then that our investors, who had also invested in BFL Software in Bangalore, were looking for strong management expertise after the exit of the then managing director B V Venkatesh," he reveals.

The merger fell in place but then came the "blank wall" of the economic slowdown of 2000. "It was harrowing but the steely resolve and financial prudence of our management team that stood by us helped see us through that difficult period," remembers Rao.

Now that it's all behind him, Rao is focusing on refining his business model. "We are looking at a unique model in which the best of IT services and BPO practices come together," he explains.

The idea is to appoint relationship managers at top levels to provide seamless service to customers. So, "if a J P Morgan would want to outsource their projects, we are better placed in offering our combined services to automate their process and also take on their back- office work".

Rao, however, is well-aware of the fact that MphasiS is a 24x7 job so he works at creating his own space and time. "We are in a strange world. We hardly get time for anything else. It's really a hectic life. But I make it a point to teach mathematics to children at the Sujaya Foundation. Every year, for around a week, I am there to take care of the children."

Family life is a challenge, too, since his wife is in Mumbai, his children in the US and the Indian arm of his company is based in Bangalore.

As if this were not enough, Rao is expected to take over as head of the industry lobby National Association of Software and Service Companies (Nasscom) shortly and with it, the enormous responsibility of furthering the cause of India's IT expertise during what many see as a difficult time for the outsourcing sector.

That alone should stretch his belief in karma to the limit.