Ed Szofer is the CEO, Founder and president of SenecaGlobal – A software development firm founded in 2007 that provides high performance IT solutions for mid-market companies. With more than 30 years of management experience in IT and related industries, Ed provides strategic direction for SenecaGlobal and is responsible for all aspects of management and operations for SenecaGlobal.
Prior to founding SenecaGlobal, Ed was the President, COO and a member of the board of directors of Whittman-Hart – a company he helped take public, and within 4 years, achieved revenues of nearly $500 million with more than 5,000 employees around the globe. Mr. Szofer has helped build and manage highly profitable publicly traded U.S. and global business organizations.
With offices in the U.S. and more than 300 employees in India, SenecaGlobal is considered one of the leaders in the IT outsourcing industry, with the highest rankings(9th) among all mid-size companies in India. As part of our Executive Insights series, Rudly Raphael sits down with Ed Szofer to discuss the benefits, challenges, company culture and CSR, as it relates to managing a global operation.
How competitive is the IT outsourcing space right now?
Ed Szofer: I would say that the “now” is more for talent than for clients. I can hire 40 people tomorrow in India, as well as here in the US to some degree, but the markets are tight everywhere in the world, literally. Good engineers are hard to find. I think COVID has accelerated the need for software technology development. Your phone, refrigerator, car, or anything you own has a chip in it. Somebody’s got to write software for that, right? Whether it’s IoT (Internet of Things), or putting stuff into the cloud. It’s a huge market that requires a lot of skills, by taking advantage of technology so there’s a need and it’s extremely competitive to hire good people.
Our companies invested heavily in India especially with respect to making it a great place to work. Out of 1000 midsize companies in the entire country of India, we ranked ninth amongst all industries, not just technology. We’re pretty proud of the culture we’ve built. A situation where it’s just as important for us to work on a person’s soft skills, their career development, where they can communicate better, both written and orally, management skills, and technical skills. That’s for them to advance within their career long term.
What was the decision to have such a huge workforce in India based on?
Ed Szofer: Our decision was based on a number of factors. First, my partner is from India, but he was educated (Undergrad, Masters, etc.) here in the United States where we met. He was living in Philadelphia for 12 years working in the software development field. Then, he launched a company in the Chicago area and sold it in 1999. We got together and the rest is history. So I was able to find a great partner, someone who lived there, understands the culture, and has the skills.
Number two, India has always been the leader in outsourcing for many years, and it has evolved a lot. In India, you will see every major US and European company, technology notwithstanding. The reason is that the government has made it attractive for other companies to come in and invest. They have a huge educational system where they turn out a lot of people with educational skills.
So, in a nutshell, that’s the reason for India – my partner is there, he knows it and I’ve been there many times. We have a team of people here in the US and my partner and I worked together in previous lives. Having the labor pool, and the executive management there is the number one reason we work there. It is also the talents that are there and the infrastructure has grown dramatically. Communication speeds have become very powerful in India because of the investment in infrastructure.
Let’s say I’m starting a new company and I wanted to replicate your model in India. What advice do you have for me before I put my foot on the ground?
Ed Szofer: Well, first of all, don’t even try it because we’ve smashed it all. In all seriousness, companies would have to commit. Unless you’re going to invest in more than 100 people, it would be difficult to set up shop. It wouldn’t become that cost productive or efficient until you reach a critical mass of 100. You would need management, resources, a physical location, and the labor arbitrage in India still exists. What roughly costs x here is a third there. So, in terms of people skills and the salaries, they’re all moving up, everything moves up. If you get Critical Mass, it is very friendly in terms of business.
One major concern is IP (intellectual property). I will write software for a company and it’s your secret sauce. How do I know somebody is not going to walk off with it or steal it, which happens in other countries, presumably, mostly in China. The IP laws aren’t as strict as they are in India. I would argue that language is a huge factor – everybody speaks English in India, whereas that’s more challenging in China. That’s really the main reason; it’s the size of the labor pool, the middle is competitive.
How important is culture to the success of your operation, especially having a global presence?
Ed Szofer: We’re in the people business. Our people don’t have to come back in the morning or go work anywhere because anytime you jump a job in technology, you can get more money down the street, whether it’s in India or here in the US. Culture is really important. I mentioned the educational aspects, but we work really hard on our employee’s careers and day-to-day welfare. We try to implement a number of extracurricular activities around the workplace. We’re very involved in the community, concerned about safety issues, women’s rights, and advancement. For a company our size, we spend a lot of time and resources focusing on culture and there are fun stuff events/activities we do to support that. Of course, COVID put a damper on a lot of things, but generally, there are social activities we still continue to maintain for the health of our organization. We try to make the workplace a fun place for our employees.
We also have to compete with Google, which is literally next door to our office. We have to make it really attractive for an employee so they don’t ask why us versus Google. Our teams are, by definition, smaller, so our employees get involved with cool projects on day one, which is a bonus for people in the tech field. That’s a big part of the culture, the technical experience and exposure are a big attractive feature for us.
How has COVID affected your operation? What system do you put in place? What adjustment did you have to make?
Ed Szofer: We prepared extensively for COVID, in order to have our employees ready to work from home. In India, it’s a little harder because the younger generation tends to live with their parents and siblings. Many of them don’t have the luxury of having a home office. Therefore, a lot of people work from their bedrooms. We had to prepare for technical availability, communications security, even with electricity which is not always reliable. We try to give them the best work environment possible at home. The other thing from our client’s perspective was security. We deal with a lot of client IP. They want to make sure that it’s secure and their intellectual property is not compromised. We needed to have all these procedures in place to prevent these issues.
We just celebrated a year from work at home and we had two virtual parties, but unfortunately, we had two young employees who succumbed to COVID. The problem is they went to their hometowns to visit their parents, but medical facilities aren’t always the best in these areas in India. This is usually how a lot of people get infected and unfortunately, we lost two promising individuals, as a result. It was very heartbreaking. As you know, India is in bad shape with COVID right now and staying safe is a challenge.
I feel like you have a personal connection with India now. Do you think it’s the work itself, or you’ve kind of grown into it?
Ed Szofer: I don’t get involved with every person there, but it’s a pretty good team. Our leadership team here has worked very effectively together and we’ve had zero attrition or change at the management ranks for 70 years. So on a team of 15 or 20 that manages the leadership as I call it that, our reporting founders and I own the business equally with a third partner semi-retired. I talk to all of our team with stock in the company like I’m talking to my cousin next door because they’ve been with us for so long. In some cases, in previous lives, previous work. The connection is very strong at the leadership level, an amazing team of people and young people that have worked together for a long time. So, there’s no politics. I like to say we’re not big enough for that or at least we do stay out of it and we’re very transparent. Everybody sees exactly what the company is doing, so there’s a sense of true entrepreneurship.
What would you attribute the success of your previous work at Whittman-Hart to?
Ed Szofer: I started at Whittman-Hart as its 10th person then became president and I was very fortunate that we had a tremendous team. Obviously, it’s a people business as ours is today. We focused initially on IBM technology and grew along with it. We were fortunate to have enough critical mass to take the company public in 1996 with a very successful public offering. We grew the company from 10 to 4500 employees. As President, I was second in command of the company. During the time I was there, we were able to do a fair amount of organic and acquisitive growth. We bought 14 companies. We had capital in the sense of a public market and expanded the business into Europe. It was a great run, a tremendous growth, and it was all about people again.
How do you deal with failure? What is your secret when something doesn’t work out the way you expect it to?
Ed Szofer: Failure is a part of everybody’s life. If you’re not failing then you’re not trying. I think nobody has a perfect batting record.
My hardest professional life experience was watching Whittman-Hart go under. There were some mistakes made internally, the market was timed poorly. If you want to learn how to lose a couple of billion dollars in the market cap, I can write a book on that. Yeah, I joke about that but that’s how some people remember me if you want to learn how to lose three or 4 billion in market capitalization. But the bottom line is if that didn’t happen, I wouldn’t be where I’m now.
If you could go back in time, what would you have done differently?
Ed Szofer: If I go back in time, I would go back 22 years ago. I think looking at my life now, where I’ve been successful is networking. I have a very good network, but I think I could have made it three or five times better if I spent more time on it. For example, going to more events, speaking at local partner conferences, and going to local associations. In the old days, it was easier to make a phone call and cold call. There was a better chance they would pick up and you can talk to someone. Today, there’s no chance of that happening. So, other than digital marketing or driving people to your website, there are other ways to sell your business. Instead of having 1500 connections on LinkedIn, I wish it was 6000. Over the years, I wish I had invested more time in business networking, but it’s hard to do everything right.
What do you think people are not doing enough of in your industry?
Ed Szofer: In my sector, I think people rely too much on everything. You know, using their phone, spending time on social media, which is great. However, I’m a dinosaur and I’m not a big fan of Facebook. But I think people have to get out in their community and get out in their industry’s associations. When COVID slows down then that’ll come back but I think people are a little hesitant still. I think there’s a lot of loss there and if you go to events that are good and meaningful where there’s a speaker for your industry or something you’re interested in, it will help and benefit you. You’ll meet people and exchange business cards, there’s still something to be said for that in my opinion.
How do you stay sharp or what media do you consume to stay on top of your industry?
Ed Szofer: I stay current with the financial markets a little bit just to understand economic trends by reading publications like The Wall Street Journal or reading sources like Market Watch. On the industry side, we keep tabs on the movement, mergers, acquisitions, the valuations of companies, small and large just to see where they’re going with investments or announcements. We’d like to do a little intelligence, regular views in terms of just normal stuff in the world. I still logically watch various news channels, but I don’t spend a lot of time on that, to be honest. I don’t dwell on it too much, we kind of know what we’re doing at this point.
Who inspired you to become the person you are today?
Ed Szofer: I would have to say my parents. I’m a first-generation, Polish kid. I grew up on the west side of Chicago. My parents were both in slave labor situations during WWII, not concentration camps, but they were both in forced labor. My dad immigrated to this country in 1949 and worked for the Chicago Transit Association. My mom came two years later and worked as a cleaner for the Archdiocese offices every night. My parents had a life that was 10 times harder than I could imagine.
My parents made me understand that I’m lucky. They told me I had an opportunity, so I took that to heart. Your influences start from home. My dad always said he didn’t have a chance and don’t squander your chances. My father died about eight years ago, but he got to see me become CEO and he was very proud of that. So, they’re my biggest inspiration.
What social programs do you support right now?
Ed Szofer: I was on the board of my high school (St Pat’s High School) located in the Northside of Chicago. It’s the oldest high school in the city and it’s an all-boys school. I was on the board for 15 years. Both my company and I still support them. We try to help kids who don’t have the opportunity to get to a better school with better discipline. Unfortunately, in Chicago, some kids can fall through the cracks due to gang influence and other issues. They also don’t always benefit from the best educational system, so we try to give back.
In India, we’re a little more involved when it comes to Corporate Social Responsibility like women mentoring, women safety, and women advancement. We’re very connected to the autism community in India. We realized this cool technology, a part of a company called Cognitive Biotics. It’s an application we develop to help people in rural areas who may not have access to good medical care. The technology makes it possible to easily diagnose someone with autism, by taking a picture that determines the individual’s mood but also provides suggestions for proper therapy. That’s a big part of what we’re doing in India because we can reach over 40 million people.
How would your friends describe you, Ed Szofer?
Ed Szofer: I’ve had the privilege of having friends and business relationships. The best example I can give you is the people who have worked with me here in the US, some of them who I started my career with 40 years ago, and they work for me or I work for them, will say that I’m honest and I’m not going to BS them. We understand each other’s needs. We manage each other’s expectations. We’re on the same page, there are no surprises, there’s no-nonsense, and there’s trust. Trust comes through understanding and being truthful. Some people will describe me as funny, sarcastic, truthful, and a good guy, but I don’t harbor bad feelings toward anyone in my life but that doesn’t mean I can’t be overly sarcastic or do something that my heroes hate. I have lifelong friendships, so I think they’d say he’s probably not the dumbest guy in the room, not the smartest guy in the room, but self-deprecating.
How would you like to be remembered?
Ed Szofer: Good dad and a great grandfather. I’d like people to think that at the end of the day I was a good dude and that people liked me. That I was reasonably successful but did have ups and downs and always did what I said I was going to do.
Where do you think the IT outsourcing industry is heading right now?
Ed Szofer: I think it’s clear that it’s growing and the demand is going to outpace supply just because of the nature of technology itself of hardware and software. It’s going to be required to manage these new devices that we’re not even thinking about yet. I look at healthcare as going to really change a lot in the next couple of years from what I can gather, with respect to technology, information, data analytics, machine learning. So, in terms of outsourcing that’s all it is to me, whether you do it here or anywhere. Just the need for talent, engineers. Technology is never going to go out of vogue in my opinion, because technology can’t stop. Someday, we’ll do what we think is science fiction today. It’s hard to envision exactly but the need for good engineering skills is not going to stop anytime soon. Probably never. It just is not going to program itself, maybe someday it will.
As our interview with Ed comes to an end, we can take away the importance of having culture in the workforce is key to maintaining a great company and how success can be possible through either making mistakes, having passion and hard work.
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