Dr. Lalit Kanodia Founder and Chairman, Datamatics Group of Companies

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Dr. Lalit Kanodia isn't considered as the chief architect of India's IT industry (some even refer to him as the father of the industry) for nothing. Figure this: Team member of the CTSS & MULTICS (the first two multi-user computer operating systems & pre-cursors to UNIX) initiatives at MIT; Founder CEO of TCS and, most significantly, the founder of Datamatics – the pioneering global Information Technology (IT) and Knowledge Process Outsourcing (KPO) organization which introduced UNIX to India, and has the distinction of many firsts in the IT domain. It was the first off-shore development center for Wang Labs (USA), was the first company to establish a satellite link from its software development center in India to the AT & T Bell Labs in the USA, first company to acquire a controlling stake in a US Data management company, and so many other firsts to its credit thereby making it the first IT company in the world to acquire the PCMM Level II and being among the first few companies to reach the SEI CMM Level V. Through the course of this write-up, we shall see as to just why these achievements of the company under Dr. Kanodia are so special.

Early Years

Dr. Kanodia had a brilliant academic record. He left for the US after completing his mechanical engineering from the famed IIT (Indian Institute of Technology) Mumbai, to pursue a Master's in Computer Science from MIT (Massachusetts Institute of Technology), where he also completed his Doctoral studies in Management, the expenses of which he supported through the Ford Foundation Fellowship he had won during graduation. He followed it up with a brief teaching stint (Statistical Decision Theory) at MIT in 1964-65.

The Spark

When he came back to India, there was a unique opportunity waiting for him in the form of JRD Tata. The thespian had been contemplating to start a software company for the Tata Group, and it was perhaps in the scheme of things that he chanced upon Dr. Kanodia's profile. JRD did not waste any time in asking Dr. Kanodia to start the same, which he did in 1967 and it was named 'Tata Computer Centre' and renamed as 'Tata Consultancy Services,' (TCS) in 1968, which has since become India's largest IT company in due course.

Well all this would not have happened if Dr. Kanodia had not come to India on a vacation during the summer of 1965, and stayed back to bide time for the love of his life – his wife, Asha. In his own words, Dr. Kanodia was bowled over by this maiden at first sight, and everything fell in place in movie-like fashion – even the obstacle of there being no auspicious day for a wedding for months together. The serendipitous occurring forced Dr. Kanodia to defer his return to the US (to complete his doctoral studies) and, stay back in India. Obviously bugged by the delay, he wanted to do some work during day-time while he was in India (apparently his forced courtship until the auspicious day arrived was carried out only in the evenings). That is when he got to meet some top officials of the Tata Group, ultimately culminating in his joining their ranks -in one of the group companies, Tata Electric Companies.

As part of his work, he wrote three papers based on his observations while at the company. They turned out to be course-defining efforts, for the company approved implementation of all the three recommendations put forth by Dr. Kanodia in the papers. And thus, the Load Dispatch System of the Tata Electric Companies was automated (by Westinghouse), Computerization of the electricity billing system of the company was undertaken (by buying computer time at TIFR who had a CDC 3600 at that time), and further, the company also decided to start a software development centre for the group.

All that was fine but how exactly did Dr. Kanodia, who in the meantime had got married (1965) and returned to the US (with his wife) to pursue his studies as well as to start his professional life, get to be associated with the Tata's plans of a computer center? In what would prove to be a turning point in the life of Dr. Kanodia, for the Tata Group as well as, inadvertently, for all of India, one of the senior-most officials of the group through the course of his many visits to the US, was able to coax/convince Dr. Kanodia to return to India and start the proposed company. Upon counsel and advice from a couple of MIT colleagues who themselves were much excited by the idea, Dr. Kanodia had given in to the request and returned to India (with the two colleagues). That is how the Tata Computer Centre (rechristened Tata Consultancy Services after being taken over by Tata Sons in 1968) was established.

Dr. Kanodia made sure the company, which was only the second company in India to be involved in the field of computers (the first was Hinditron), had the best of talent possible so as make the effort a really path-breaking one for the company as well as the nation as a whole. In fact, it is said, that there were around 20 Ph.Ds at the start itself which gave a tremendous impetus to this enterprise.

The Journey

After having launched the Tata Consultancy Services (TCS), and successfully overseen its growth and operations (as it first CEO), Dr. Kanodia decided to set-up his own enterprise in due course. Thus, he founded 'Datamatics,' in 1975. But all was not hunky-dory for the software industry in the initial years. There were severe bottle-necks that companies found difficult to over-come, which, in effect, Dr. Kanodia opines, hurt the growth prospects of the country and it was set-back by atleast ten years in terms of development. There is an expansive list of hurdles that a company had to face during the early days of the software industry in India, but this write-up here permits only a contextual mention of some of them.

Problems like shortage of foreign-exchange greatly impeded travel of professionals to countries, as this meant that every time one needed to go abroad, one must first seek approval of India's central back, RBI (Reserve bank of India); which also meant there were no foreign exchange credit cards, thus making local travel -in countries like the US- very difficult. The problem was compounded by the tax levied on the Foreign Exchange purchased for such visits. Then there was the seemingly impenetrable wall of the bureaucracy that one needed to scale to be able to set-up an overseas subsidiary or branch office, thus limiting the scope of expansion for the software business. Likewise, overseas acquisition was also not possible and added to it was the shortage of funds for entrepreneurs owing to the absence of venture capital. There were also heavy cost implications vis-à-vis communicating with off-shore units, as the per-min ISD calls cost a fortune then.

It can be argued that some of the problems mentioned above were unavoidable as India was then a much closed economy and, consequently, the control mindset was manifest in all these obstacles to development.

Braving the odds, sticking to his vision, and believing in his own capabilities, as well as the immense potential that his countrymen possessed, Dr. Kanodia went about chartering a path of success for Datamatics like only a handful of others have in all the history of entrepreneurship in India. Along the way, he pioneered many efforts that have not only shown the light for thousands of other aspirants in the following three decades but have also stood the test of time as the bench-marks for the Indian as well as the global IT Industry.

Thus, despite such non-conducive business atmosphere in the country, his company was able to establish an off-shore development centre for Wang Labs (USA), a satellite link with AT & T Bell Labs (USA), and acquire the data management company 'Saztec International.' Datamatics was also the first company to introduce, through Dr. Kanodia, UNIX to India. The Datamatics story continued to become better and better with the passage of time. The opening up of the Indian economy during the liberalization era in the 1990s brought about by the then prime minister, Shri. P.V. Narasimha Rao, also helped it propel towards its goals.

Under the leadership of Dr. Kanodia, understandably, the company went on to accomplish some glorious feats in the history of the computer-led modern era of globalization. Sometime prior to the liberalization phase (in 1991), Datamatics had, as recounted above, set-up India's first satellite-link for software development to Bell Labs (USA).

This enabled log-on by a computer in India to a computer in the US. Earlier most Software Professionals had to physically travel to the US for Software development. Satellite Links considerably reduced such travel and the need for work permits. There is an interesting anecdote about this defining step by Datamatics. Dr. Kanodia was hauled up before the Department of Electronics and given a dressing down (for setting-up the link).

Apparently the DOE was paranoid about the satellite link being manipulated to transfer secrets to Bell Labs. It was only upon Dr. Kanodia's re-assuring explanation about its need and use that the officers got clarity on it all and let him go! (What he exactly told the officers that made them accept the setting-up of the satellite-link as being not harmful to Indian interests is also an interesting story in itself, but more on that some other time). As mentioned earlier, the cost of telephone calls to international locations was very high which limited the scope of operations for many software as well as ITES companies, as it dented into their margins.

Well aware of this all, Dr. Kanodia, in his capacity as the Chairman (western region) of the ESC (Electronics and Computer Software Export Promotion Council), had made a presentation to Government Secretaries recommending slashing of the telecom cost by about 25%. That the powers that be did not understand the solid reasoning behind the recommendations and did not do anything about bringing down the costs is also one of the reasons that support Dr. Kanodia's assertion about India's policy inaction, indirectly setting it back by a decade vis-à-vis its development.

It might be well-worth here to briefly touch upon some of the major achievements/accomplishments of Datamatics under its visionary founding-leader.

1.     It was the first electronic publishing company in India (it was the 1st company in India to obtain the ISO 9002 Certification for electronic publishing).

2.     It developed the Special Tool Development Language.

3.     Developed the world's first commercial XFS framework for NCR

4.     First company in the world to guarantee 99.997% accuracy level in data capture

5.     First IT company in the world to reach PCMM Level II, and amongst the first few to reach SEI CMM Level V.

6.     Involved in the design, development, and implementation of some of the largest Automated Fare Collection Systems in the world.

7.     Developed the award-winning 'Intelligent AC (i-AC),'

8.     Implemented the first Kiosk-based flight ticketing and boarding system for an international Airlines.

9.     Achieved 3-times efficiency enhancement through AI-based (Artificial Intelligence) Document Processing platform.

10.     First in the world to develop the Intelligent and Auto Categorization (iCAT) tool for market research.

11.     First Indian Company to launch Cloud-based invoice processing platform in the US.

12.     Featured in the Global Services 100 List (two times in a row).

.     First Indian Company to win the International Asia-Pacific Quality Award in the Services Category.

14.     Conferred the “Most Innovative Software Product Award,' by the Prime Minister of India.

The above is only a partial list, as the original one would continue to expand under the guidance of Dr. Kanodia, who has since become the Executive Chairman of the company.

Other Associations

Dr. Kanodia has served as the Past President of the Management Consultants' Association of India and Chairman of the Electronic & Computer Software Export Promotion Council (Western Region). He is the present President of the Indo American Chamber of Commerce, Western India. He is Chairman of the IT Committee of Indian Merchants' Chamber. He has been a Member of the Executive Committee of NASSCOM. He is a member of the Board of the Sloan School of Management, MIT. He also served on various Committees of the Government of India and the State of Maharashtra. He is also the Honorary Consul General of Chile in India.


True to being a visionary, Dr. Kanodia, has ensured that the CSR initiatives of Datamatics are moulded in such a way that they have a long-lasting impact on the under-privileged communities. The company drives its CSR initiatives through a corporate body named 'ASHA'. Towards its commitment to bring about a change in the critical areas, the company has identified Employability & Environment as the key focus areas.

To train and provide employment opportunities for physically challenged individuals and rural women, the company has tied up with various institutions working at the grass-roots level. Besides this, the company has a special "Knowledge Associate" initiative that opens up opportunities for individuals, who would otherwise be deprived of gainful employment opportunities.

Datamatics also endeavors to contribute towards the development of a sustainable society. The importance of reducing carbon footprints is well understood, and all of its personnel are committed and aligned to bring about change in their business practice and contribute in reduction of greenhouse emissions. Further, besides encouraging recycling, as a proactive effort, it has tied up with Growtree.com, as it believes planting trees to be the most effective way to reduce carbon emission. Through this engagement Datamatics celebrates its employee's birthday by planting a tree on their behalf.


He has not only won many plaudits for his work including the Order of Merit for Management & honoured as 'Samajshree,' -by the Council of Management Executives, but also gained the unique recognition of being the only software professional to be included in the DataQuest's 'Hall of Fame,' for his extraordinary efforts to enable the Indian IT industry take immense strides even on the global landscape.

He received the Distinguished Alumnus Award of IIT, Mumbai.

Conferred the "Lifetime Achievement Award" at Enterprise Scions 2006 - Entrepreneurship Excellence Awards.