In August 2008, Satish Pendse realised that in India, the potential of IT to provide value to an overall infrastructure business was extremely high.

He evaluated the prospects of the IT that could be turned into the "new business model" for HCC in the infrastructure domain. He saw that prospects of the IT were not being utilised to its full potential in this industry, when compared to others, such as banking and telecom. Also that IT knowledge within the industry was low.

Secondly, he saw that there was a strong government focus to invest in the infrastructure front, as well as increase the role of private participation and foreign trade investments.

Finally, the infrastructure sector was being neglected by IT service providers as their businesses saw growth—both in terms of adoption and revenues in other sectors such as banking, telecom, retail etc., in India and across the globe.

“All these factors created a gap between the needs of the infrastructure sector and the offerings by the IT industry,” says Pendse.

He wanted to bridge this gap and felt that HCC could ft this role, as it was one of the most extensive users of IT, and with their domain knowledge they could communicate easily with other companies in this sector.

However, Pendse had a tough challenge at hand. All these were his findings. He still needed the management nod for his plans to become a reality.

Board turns a blind eye
To start with, the management was skeptical, since IT was not their core business. As one of India’s leading infrastructure companies, with a turnover of Rs 4,000 crore, the company already had a pipeline worth Rs 17,000 crore for the following four years.

“They had concerns about getting into a new business line, the IT operations at HCC could suffer and they didn’t want to be stranded with their CIO starting a new initiative. They were justified,” says Pendse. However, he did not give up.

A strong believer
Pendse went ahead without forming any new company. For 18 to 20 months he visited over 200 companies in the infrastructure space to offer IT services.

“Eighty percent of these companies told us categorically that prior to us there were other providers who tried to sell their products, but the differentiating part was that we told them why it was required for their businesses,” adds Pendse.

Despite the economic slowdown and a tough IT spending scenario, Pendse managed to get 27 customers.

His initial assumption of connecting with the industry, and raking in business proved right. The delivery of services to these customers was also carried out in an efficient manner.

“This gave the management the confidence, as they were sure that I will not harm the legacy or the brand,” believes Pendse.

Finally, in May 2010, HCC hived off its information technology division into a fully-owned subsidiary—called Highbar Technologies.

What will be the focus of Highbar Technologies in the near term. What goals have you set for the next five years?

For the next five years, we want to focus only on the infrastructure sector with a different approach. The IT services industry has been overly populated. We did not want to be one among them, as this would have resulted in the company being marginalised.

We accept that we cannot compete with the major IT service providers if we try to follow their business model. These companies sit on large cash, resources and expertise. So, we have decided to be vertical-focused rather than be solution-focused.

The market that we are looking at is approximately Rs 2,000 crore and after five years it will grow to a Rs 3,000-crore market.

We have started providing SAP services. There are other existing players in the market, but the difference is that we speak the language of our customers. We offer implementation of SAP ERP, CRM, Business Intelligence and support, and now we have also started process consulting. We also have specialised line of business IT products.

We want to be an end-to-end IT service provider to the infrastructure industry. Some of these products will be developed by us. While others that require large investments and expertise, which we lack, will be done through partnerships.

This year we are opening our subsidiary in Dubai and want to tap that market. So, in the next three years we want to consolidate our position in India and the Gulf.

In the third and fourth years, we wish to target the European and Far East countries.

The primary role of a CIO is to build buy-in within the organisation and choose the right partner/solution and carry out the programme management to ensure it happens smoothly.

Over a period of few years, we want to be looked as the CIO for the infrastructure industry. Just like the CIO is held responsible for the success, or failure, of an IT project, similarly, Highbar Technologies will be responsible for the outcome of IT deployment within infrastructure companies.

Today, we have a team of 125. We expect the team to grow and include 1,000 employees by the end of five years.

How are you managing the IT needs for HCC?
I continue to remain the CIO for HCC Group. However, my involvement has now reduced. We have divided Highbar in two sections; one servicing the internal IT exclusively, while the other looking at external customers.

The internal service group has KRAs that are related only to HCC, and I have a person to head this function.

How challenging is it to manage IT and, at the same time, be the head of business function?

I have undergone transformation. The CIO role attributes are completely different from those of business heads. So, you need to have the flexibility to change your role fast.
That is a challenge.

Managing internal customer, I believe, is more difficult than managing external ones.

When a CIO speaks, people listen. Now, you need to listen to others even when they are wrong. CIOs are more focused on the delivery of IT. In this business, delivery of IT is a small aspect, and there are other challenges such as HR, marketing and financials. None of these roles are a part of the CIO's challenges.

Usually, CIOs have to manage people who are from their fraternity—people who have come through these ranks and understand the team's mindset.

But now, one has to manage a brand manager, an accountant and HR and sales personnel spread across locations. This is a great challenge.