CA cleans up its act, and gets it together in India.
John Swainson, President & CEO, CA Inc (formerly known as Computer Associates), had a loud and clear message to convey across the world when he launched an India technology centre in Hyderabad last fortnight. “A lot of people have criticised CA in the past for being a company that acquired its technology and never built its technology.
The only purpose this facility has is to build technology and I feel very strongly that it is a message not just for India but really for the whole world,” declared Swainson.
The facility in Hyderabad, spread over 30 acres with 270,000 sq. ft of built-up office space for 1,650 people and a capital investment of $30 million, is amongst the top three largest such CA centres in the world. Its 1,500 people work on R&D, quality assurance, platform services, internal applications development and customer support. CA’s core strategy is enterprise IT management.
Swainson, 53, who finds joy in gardening, unfortunately has had to spend much time weeding out the old “do-what-it-takes-toget-it-done” culture in the company and in cleaning up CA since he took charge three years ago. Having to take up the reins in a company that had hit headlines with a $2.2-billion accounting fraud, Swainson had his work cut out. But the good news is that he has put in place a cultural transformation. “It was very much a short-term, opportunistic, transactional kind of culture that we had to change into something that was longer term and more focussed on our business and less on turning a quick buck,” says the CEO. “We have covered quite a distance and have set a framework and systems; we now have to operationalise them.”
In the last three years, he says, CA has succeeded in cleaning up its financial act. “In the first year or two, I probably spent half my time worrying about internal stuff; the other half was spent on strategy. Today, a third of my time is spent working on growth and the execution of strategy, a third on internal things—today, the focus is no longer on working with lawyers and accountants but with engineers and sales people. The last third of my time is spent on worrying about customers and the markets.”
So, how does the market perceive CA today? “There was a lot of scepticism initially and even some hostility towards CA because it had done some very customer-unfriendly things in the past… Today, the market is more accepting and we see this in the customer opinions and surveys that we undertake and in the readiness of customers to do business with us.”
Interestingly, despite being a software products company, CA never did quite spend much on software and systems for its own internal use. That is now changing. Swainson says the IT budget today is in the $200 million range, which is roughly 5 per cent of overall revenues.
And where is India in CA’s scheme of things? “India is reaching a critical point in the maturity of its IT systems and I believe that over the course of the next few years, the kind of software that we sell is going to become absolutely critical for Indian companies if they want to scale to the kind of world class levels they’re aspiring for.” Swainson adds that CA’s domestic operations grew 40 per cent in the first half of the current year. “If we continue to do that we will almost double revenues every two years, and should have a $100 million business in India in five years. Currently, it is $20 million.” (Note: This does not include the business that CA does with Indian IT vendors like HCL and Satyam.) Such blistering growth would be a good reason for Swainson to keep visiting India.