"The software market opportunity in Japan is about $100 billion and Indians are very good at software project management."

-Kenichi Ohmae, Founder
and MD, Ohmae & Associates, and Founder & Chairman, JASDIC.

Described as Mr Strategy, Kenichi Ohmae
is one of the leading management consultants in the world. Having spent 23 years with
McKinsey & Co, Inc and co-founding its strategic management practice, Ohmae is
currently assisting the Malaysian government on the latter's much-acclaimed Multimedia
Super Corridor Initiative. He also advises the Japanese government on similar initiatives.
The author of `The Borderless World', Ohmae has the distinction of having created the
framework of the `borderless' economy.



Recently, Ohmae was in India as part of JASDIC's (a multiple joint venture between three
Indian companies--with DCM DS, Satyam Computer Services and Infosys Technologies, and
three Japanese companies--NTT Leasing Co Ltd, Duskin Co Ltd and Fukuoka Clinical Pharmacy
Pvt.) thrust to outsource Japanese software work to India. Excerpts from his conversation
with Sivakumar V, Assistant Editor, DATAQUEST:

On his current visit to India:

The objective of my visit is to understand the technical competence of Indian software
houses. It is part of the JASDIC's initiative. I'll be visiting Bangalore and Hyderabad
also to meet other members of our organization. Forty Japanese executives have come in
India to know the possibilities from this country. This multiple joint venture has been
specifically created for the purpose of bringing Indian software companies and the
Japanese market together.

On JASDIC's objectives:

We provide Indian software companies access into the Japanese market. JASDIC is completing
phase one and is entering phase two. Phase one had a duration of three years since JASDIC
was incorporated in June 1996. This phase was the introduction phase. The next phase will
be of rapid growth, which we will be entering in June 1999. Plenty of software projects
have been completed in phase one, and these projects will be used as prototypes for
Japanese corporations in phase two. In the year ending June 1999, we hope to do a business
of about $10 million. And we have been doubling it every year.

The approach of JASDIC:

We send Japanese-speaking Indians to Japan so that they understand the market. Japanese
executives also visit India to understand the Indian software development scenario. We at
Ohmae & Associates do the majority of consulting part to help bridg the gap between
the two, and Indian firms provide the technical software expertise. Japanese are good at
manufacturing, but are not good in IT systems. However, Indians are good at software
project management skills. We look at merging the two disciplines.



Consulting is a difficult job for an Indian company because Indian consulting is
sandwiched between the two cultures and the two disciplines of the two countries. It is a
difficult process to manage the show. JASDIC would like to become a platform of entry for
Indian software companies into the Japanese corporate market. At the moment, we have three
Indian companies but the structure of this venture allows other Indian software companies
too. But right now, if you ask me, three are enough.

On the nature of projects:

IT projects in Japan mainly focus on ERP, conversion to web from traditional systems,
supply chain management, and sales systems. Now, new technologies like ecommerce are also
being looked at.

On market potential:

Japanese companies are basically islands of legacy systems. We aim to help them get
web-enabled, so that the systems talk to each other. For example DCM DS is developing a
software which will enable traditional systems to talk to standard-based systems. If you
take the case of US companies, they have migrated to ERP and supply chain management
almost five to ten years back. But the Japanese traditionally focused on manufacturing.
Production is not at all a problem. We have to focus on sales and service systems, which
have to talk to the manufacturing and R&D systems. We are clearly looking at ERP and
supply chain kind of set up whose software market opportunity in Japan is about $100
billion. Companies from all over the world are vying for this huge market. This includes
consulting firms, like PriceWaterhouse Coopers and Andersen, and IT companies like SAP.

On issues associated with the
Japanese market:

Language is the main problem. Moreover, the Japanese way of doing business is different.
Our contracts are different from the American contracts in the sense that we are mainly
relationship-based. We need engineers who understand the Japanese corporate world, and the
service provider has to understand Japanese way of doing business and then provide
solutions.

On the USP of Indian companies:

Indians can offer human capital but the disadvantage of India are lack of infrastructure
and high taxes. Take the example of Ireland which is a hub for call centers. This is
because they have a fantastic telecom infrastructure, transport, taxes (10% corporate
tax). Logistics are very important. Everything is so good in Ireland, so the key is in
making everything work together.

You are sitting on a gold mine and the gold mine is the world. You don't have to create
industry, you can get jobs from outside. All you have to do is to create great
infrastructure facilities like transport, telecommunications. Jobs will come over
telephone lines.