ARS Traffic & Transport Technology from The Hague is a leading market player in technological traffic solutions. It has opened a branch in India twenty years ago to develop software. Furthermore, the company now sells its software to Indian governments. “We started step by step and now regularly receive large public contracts,” says CEO Jan Linssen. “We started very small, with automated traffic control in Patna. We now manage more than 10 million road users in Mumbai.” ”
“When we started ARS in 1998. Traffic information was something new, but the realization that the application of technology was important for traffic management grew rapidly. As a company, we quickly came to the conclusion. With the capacity we had in the Netherlands at that time, our goals could not be achieved. So then you look outside the door”, says Linssen. The company travelled around the world in three years to find the right software developers. After a year in the Balkans and an office in Argentina, they landed in India in 2001. “We were not dissatisfied with the set-up in Argentina, but the economy was not going well. Besides, the developers’ English was poor and the technology sector did not play an important role in the country.
Setting up an Indian branch
The CEO describes the start of the company in India as pioneering. “We had to invent everything ourselves. We started with ten people and were very lucky with our location. At the time there was only 1 Tech Park with excellent facilities, fast internet connections and good accessibility. That park was in Trivandrum. Nowadays, as a tech company, you immediately think of a location in Bangalore. However, we are very happy that we can offer our developers a good living environment with lots of greenery. Moreover, they do not have to be stuck in traffic for two hours to the office.
But there were also enough moments of trial and error. “There is now much more help available if you want to start as an international company. Furthermore, opening an office has become a lot more complex than it was in 2001,” says Linssen. “Yet it was not easy for us either, we had a lot of taps on our nose. Besides, we had to discover a lot going on. Fortunately, we already had experience with setting up companies abroad, so you already start with a flexible attitude. You definitely need that in India. Because you do not suddenly understand the culture of this new country where you settle. For us, it meant: trying, adjusting, introducing a new way, adjusting again, etc. Until you have found the right way of working. ”
Corporate culture in India
The fact that all employees in India and the Netherlands are aligned in terms of working method is more important to ARS T & tT than to other IT companies. Not only software is developed in the Indian office, but the route control systems and matrix signs along the Dutch highways are also controlled from Trivandrum. “We keep an eye on the entire road network in the Netherlands. Therefore, if a system fails, we can repair the system before rush hour starts, due to the time difference.” It has therefore been important from the outset for Linssen that the team in India would become an extension of colleagues in the Netherlands and not an outsourcing location. “With this approach, it is very important that you don’t try to set up a Dutch company in India. You have to find a method where you stay close to them. Developing mutual understanding is a requirement.”
“India is not an outsource location for us, it is our Indian colleagues”
– Jan Linssen – founder and director ARS T & tT
Linssen, therefore, chose to manage the team right from the start. He did this with clear objectives, measuring results and conditions for failure to meet the goals. “In IT, assignments are often described in a somewhat abstract manner, which sometimes results in miscommunication. Especially because we expect a different level of quality in Europe than in India. So you have to explain very clearly what you want. The route we have chosen is, therefore, to put our questions in India at the earliest possible stage. And, then ask them to work them out. What will be made? Based on this, we determine whether they really understood our idea. Further, can they bypass the socially desirable answers that Indians are used to give? ”
Government contracts can be won in India with an adapted product
Linssen already saw the possibilities for ARS traffic solutions in India when setting up the Indian office. “The market was not yet ripe, our solutions were too expensive and advanced.” But we were able to bridge the gap with his team. They had insight into the high-tech possibilities for the European market and were much better introduced to the local market. “We did not want to compete with Indian companies, whose prices and the quality of the products was too low. But our European products were obviously a mismatch. Because our team understood what was technically possible, they came up with realistic adjustments for the Indian market. We are in the middle segment in terms of price and quality. As a result, we now hardly have any competition. The Indian companies aim too low and the other Western companies too high.
According to Linssen, winning a tender in India is not that different from the Netherlands. “The price and quality you offer must meet the demands of the government. The smartest thing is to let the client define the minimum quality. This way, you don’t have to fight with the price fighters and can make a real offer.” Although there seem to be many opportunities in this area for international companies in India, according to the CEO, a tender in India cannot be won from Europe. “A local party is always in favour of this. We are lucky to be seen as a local party after 20 years. It is a position that you cannot buy but really must acquire. In addition, Europeans often think that they can compete with their advanced technological solutions. However, they do not realize that they enter a country with very enterprising people. These people work for a much lower price. That is a solid nut to crack. ”
To win a tender, collaboration with local parties is a must
The smart software solutions of ARS T & TT alone are often not enough to win the tenders. “We work with local companies on a fairly regular basis to provide a total solution. This can be a company that sets the posts and lays wires for our traffic management systems. Or, a company that can supply the hardware for our software. These are often quite tricky collaborations. This is because such a company suddenly has to deliver much higher quality than they are used to. Hence, you do not have the opportunity to send or train them as you would with your own employees.”
According to Linssen, they have experienced serious mistakes here in the past. “We experienced, for example, when we asked a company to lay cables at a depth of 75 centimetres, and when problems arose, we discovered that they were only ten centimetres. You learn from situations like this that you have to be on top and be physically present at the project. Or, you only pay afterwards when the job is properly completed.” But, Linssen has also learned a lot from the collaborations. “In many cases, we also have to listen to them and not just impose our demands. They often have knowledge that we do not have. With every collaboration, we learn something new about India. For example, where and how we can purchase products and services at a competitive price.”
The future offers opportunities for European companies in India
Linssen has high expectations for the development that India will experience in the coming years in terms of traffic and transport. “In 2001, China and India were very similar in terms of situation, chaotic and constant congestion. China has developed tremendously in recent years and India has the potential to take the same step now. This is interesting for European companies because unlike in China, India does not do this itself. If you invest in time, you can benefit from this.”