Why Technology Service Companies are increasingly relocating their Executives overseas?

Indian technology service companies have started stationing their executives in US and Europe close to their customers even though the bulk of their workforce is in India.  Today nine out of 10 CEOs of Indian IT service companies are based out of US and Europe compared to only five in 2019. Six out of 10 largest IT companies in India have new CEOs since 2019, and three of them, Tech Mahindra, LTI Mindtree, and Sonata Software have relocated their CEOs to where their biggest markets are whereas the outgoing CEOs at these three companies were based out of India. ( The Mint)

Mohit Joshi took over as CEO of fourth-largest Tech Mahindra in December 2023. He works from London as against his predecessor C.P. Gurnani, who was based in Mumbai. The script followed at Sonata Software, where Samir Dhir took over from P. Srikar Reddy in April 2022. While Reddy was based out of Bengaluru, Dhir is based out of New York. (The Mint)

At the remaining companies, including Tata Consultancy Services Ltd, Wipro Ltd and Persistent Systems Ltd—their chief executives remain in the same locations as their predecessors. Even as some India's largest software services companies pick outstation CEOs, the biggest two -- TCS and Infosys Ltd -- are not impacted by this trend -- Both TCS’s Krithivasan and Infosys’s Parekh, are based out of their Mumbai and Bengaluru headquarters respectively. (The Mint)

There are two different thoughts in play behind this trend; the choice of location is usually a CEO’s prerogative, and he may choose to work from his existing location. The second thought is that these companies are convinced that having their executive team close to their customers will help them achieve higher growth. This second thought deserves more merit in light of the increasing importance of the customer in product innovation and design, revenue assurance and value generation to name a few.

Let’s look at product innovation and design first. The most common reason why usually new products/ services fail is the absence of the customer in the design process of the product. This is very common in technology companies where the product design is controlled by the technology team, which is obsessed by adding as many features as possible in the product leading to something called ‘feature shock’. The customer may not be needing and hence may not be willing to pay for all the features in the product and that may be the reason why the customer rejects the product. The failure of Amazon’s fire phone can be attributed to this factor only.

The problem with designing products around technology leading to ‘feature shock’ is that the product’s value is less than the sum of its parts. These products are over engineered, hard to explain, costly to make and are overpriced. The design of feature shocks is often the result of siloed working, the mentality that ‘customers don’t know what they want, so we need to decide what to build’, and ‘one size would fit all our market is not segmented’. The truth is even in a seemingly homogeneous market only 10% of the customers are alike. Also, segmentation based on demographics works in creating or altering messages related to branding, but it will not work in product innovation and design. Companies need to segment their customers on the basis of their willing ness to pay, value, volume and price. Without segmentation based on these variables, newly launched products/services will not take-off in today’s ultra-competitive markets where the product-life-cycle is shortened and customer has to realize value at every point of the value chain.

Customer experience (CX) is one of the main drivers of value for the customer and hence revenue assurance today. Executives from commodity businesses will disagree with me here because they feel that in a commodity business the only value for the customer is a lower price point, the number attached to a product as its price keeping all other strategic factors (product range, image, price, and presentation of the outlet) in the price decision constant or equal. However, except a very few industries such as mining value can be more than the relatively lower price point, and value can include all sorts of factors such as experience of customer with service to the quality of the materials.

Till recently, CX has been the primary duty of customer service personnel and technology staff charged with designing well-functioning digital and virtual interfaces. Higher-level executives and decision-makers who have either been missing or considering CX not to be their jobs have never actually experienced how good (or bad) their company’s CX is.  The real culprit is the product- focused mindset, which focuses on finding a market, rather than orchestrating growth with customers. The shift from a product-focused mindset to customer-centricity has been a revolutionary change in technology service companies.

Customer-centricity can be defined as orchestrating all activities of a company for a target customer’s success- at a profit. Hence, customer-centricity demands that companies remain in constant conversation with their customers, identify strategic insights that emerge from the dialogue, act on them to actualize change, and, may be, transform how they do business. Customer-centricity requires sellers and buyers to work together, delivering jointly developed solutions that create mutually beneficial outcomes for both the seller and the buyer.

 Infosys partnered with Rolls-Royce to co-create engineering and digital service solutions in the aerospace sector. This wasn’t just a vendor relationship — Infosys helped Rolls-Royce evolve its engineering capabilities into a digital services model, including predictive maintenance, supply chain visibility, and performance optimization for aircraft engines. Both companies worked closely to co-develop solutions based on real-time data from engines, improving service reliability and lowering downtime for Rolls-Royce's customers.

In another example, Tata Consultancy Services (TCS) and Walgreens Boots Alliance (WBA) co-created a new digital platform for pharmacy operations in the U.S. The partnership wasn’t a typical outsourcing deal; it involved collaborative design, development, and scaling of a cloud-based, automated system to improve prescription filling and customer service. TCS and WBA jointly designed workflows, automated repetitive tasks, and integrated AI-driven insights, directly improving customer experience in pharmacies.

Executives of companies focused on customer-centricity ask themselves three questions:

1.       Are our strategic objectives and transformation efforts aligned with our customer’s priorities?

A few years ago, Wipro realized that despite solid delivery capabilities, its growth was flattening because its internal transformation efforts were not fully aligned with fast-evolving client priorities — especially in digital, cloud, and consulting-led solutions. It reorganized business units from a largely service-line (technology or function) focus to an industry vertical focus, so that it could mirror its clients' business environments more naturally. It also created "customer success" roles beyond traditional account management — focusing on anticipating customer needs, not just responding to them. Wipro launched a global transformation program under the CEO, which reoriented Wipro away from purely "delivery" to "co-innovation and value realization" as part of every deal. This shift also contributed to the launch and growth of Wipro’s HOLMES AI and Automation platform — developed specifically after customer feedback highlighted the need for more intelligent and autonomous operations solutions.

2.       Are our operations configured on a customer validated input?

An example of an Indian IT company that asked itself this question is HCL Technologies. As part of its “Mode 1-2-3” strategy, HCL shifted its focus from purely internal efficiency to configuring its operations based on customer-validated input. The company recognized that traditional service delivery models were no longer sufficient to meet evolving client expectations, especially in areas like digital transformation and cloud-native solutions. By engaging directly with customers to understand their priorities, HCL restructured its delivery frameworks to embed co-creation, continuous feedback loops, and joint governance mechanisms into its operations. This approach ensured that services and solutions were aligned not just to contractual SLAs, but also to the real business outcomes customers valued. Over time, this customer-validated operating model became a key differentiator in HCL’s growth, particularly in complex, long-term transformation engagements.

3.       Are our organizational setup and investments allocated to customer commitments for a mutual success?

Tech Mahindra evolved from a traditional IT services provider to a digital transformation partner, it critically assessed whether its organizational setup and investment priorities were truly aligned with customer commitments and mutual success. This reflection led to Tech Mahindra restructuring its business units around customer-centric verticals such as telecom, manufacturing, healthcare, and BFSI, rather than around internal capabilities alone. The company also shifted significant investments into building niche digital platforms, expanding strategic partnerships with hyperscalers, and upskilling its workforce in emerging technologies like 5G, AI, and blockchain — all based on the future roadmap of its key customers. This commitment to mutual success was especially visible in its co-innovation labs and joint go-to-market initiatives with clients, which allowed both Tech Mahindra and its customers to share risks and rewards in new digital ventures.

  The three examples above suggest that a customer-centric company usually has the following salient features:

•   It has mutually agreed-upon collaboration strategy with the customer.

• It maintains strong contacts, from operational level to the C-suite level, with the customer.

• It communicates in an open, fair and forward-looking way with the customer.

• It develops unique offerings and value propositions for the customer.

• It aligns processes effectively along the value chain.

• It cocreates new profitable businesses for the customer.

The most important requirement for a company to be truly customer-centric company and thus deliver more than expected value for a customer is that it understands the value of privileged insights about its customer. Privileged insights are unique and relevant information about the customer that only this one particular company is privy to. Gathering and processing privileged insights is only possible when a company engages with customers in a manner that adds trust and value, integrates customers into product/service development, and observe and interact with customers while they use its products/services.

For value addition, another important point is how a company embeds a deeper understanding of customers into the heart of their business models and operations. Citigroup, Titan, Adobe, Honeywell, and Hitachi are a few examples who have followed this prescription in letter and spirit making customers an integral part in their value chains. It is critical that privileged insights are leveraged by connecting them into a company’s operations.

 Furthermore, successful companies such as Coforge (formerly NIIT Technologies) have utilised privileged insights from their customers to create customised offerings in travel and transportation and banking and financial services. In travel and transportation vertical, Coforge collaborated with Etihad Airways on a global Passenger Service System (PSS) migration to Amadeus, enhancing passenger experiences across digital and traditional channels thus catering to the customer’s customer. Another significant partnership is with International Airlines Group (IAG), where Coforge played a key role in delivering 290 initiatives within two months. Additionally, Coforge maintains long-standing relationships with global travel technology providers such as Amadeus, Sabre, and SITA, offering product engineering, system integration, and quality assurance services.

Ultimately, the growing trend of Indian technology service companies relocating their executives closer to customers is more than just a shift in geography — it reflects a fundamental change in mindset. In an era where customer-centricity defines market leadership, proximity enables real-time collaboration, deeper relationship building, and privileged insight gathering, all of which are critical to co-creating solutions that deliver true value. By embedding customer priorities at the heart of strategy, operations, and organizational design, these companies are not only securing competitive advantage but are also reshaping the future of global technology partnerships. As the industry evolves, the firms that succeed will be those that continuously align themselves with the ambitions, challenges, and successes of their customers — wherever those customers may be.