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Outsourcing tackle

Kanika Goswami | June 8, 2008
When the old have the agility to take on the young: it's a formula that people love. So when the 114-year-old Indian company Dabur outsourced its IT in order to stay quick-footed, plenty of industry watchers held their breath.

Remember the scene from the Bond movie Never Say Never Again when a middle-aged Sean Connery vaults over a banister and tackles the bad guy? Reviewers could not stop raving how an obviously well-past-his-prime Connery could be so nimble.

When the old have the agility to take on the young: it's a formula that people love. So when the 114-year-old Dabur outsourced its IT in order to stay quick-footed, plenty of industry watchers held their breath. After all, only a handful of large Indian companies had attempted something similar -- and none of them had a century-worth of baggage.

The suspense didn't last long. Everyone quickly saw the sense of outsourcing IT, especially at a time when attracting IT talent was very hard, notes Amit Burman. And it's worked for Dabur. It's given them plenty of flexibility, if the way the company is expanding and taking one smaller and more nimble brands is any commentary.

If imitation is the highest form of flattery, then Dabur should be flattered: plenty have followed its footsteps. When a titan of the old economy opens a new road, it leaves behind a large swath for others to follow.

CIO: After 114 years, Dabur handed the business over to professionals. How has that worked out?
Amit Burman: In 1998, the Burman family passed the management of the company over to a professional CEO and limited their role to strategic inputs at a board level. We have reduced our strength on the 10-member board of directors to four members and only provide broad policy guidelines for growth and diversification. The family provides strategic direction to the company and the group and evaluates newer avenues for growth.

The decision was taken in response to the changing dynamics of our business and to inculcate a spirit of corporate governance within Dabur. We felt the need to look at management succession more seriously. We felt it was time for us to sit back and look at the big picture and let able and talented managers to run the show.

However, we also believe that the family has a trusteeship role to follow both in terms of perpetuating the family business and in preserving and growing the business. For Dabur, the family and the business are institutions to preserve.

The move has been a success. Dabur has grown under professional management. Some of its brands -- particularly in the highly competitive oral care and shampoo markets -- have emerged as the fastest growing brands in the market -- ahead of established multinationals. For example, Vatika has, for two years running, been the fastest growing shampoo in India. Three of our toothpaste brands -- Dabur Red, Babool and Meswak -- are the fastest growing toothpaste brands in India for three years now and have taken away market share from our competition.

 

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