The Road Ahead

DQI Bureau
New Update

Only a few months ago, companies like HCL Technologies, TCS,

Wipro, Satyam, Iflex, Mphasis BFL and Infosys had almost nothing in common

except for the fact they are all in the software business. These companies,

however, now have something else in common–all of them have either entered or

are planning to enter the corporate outsourcing services business.


Given the current slowdown in the software business, the

timing of their foray is crucial. A major reason for this foray could be that

these companies see elements of commonality between their current expertise in

the software business and remote services operations. All of them primarily

serve the US and the European countries. These are also the biggest markets for

remote services. And in all these years of serving the global software business,

HCL, TCS, Iflex, et al, have developed considerable expertise in international

marketing as well. Many of these companies would also be looking at integrating

their current software services business with outsourcing.

Redefining business strategy?

These already have an international clientele and proven expertise in human

resource management.Moreover, the right kind of management teams, set of

processes, infrastructure and delivery models are in place. All these factors

are considered crucial for success in the global outsourcing business.

Business processes are increasingly getting integrated with

IT. Companies like TCS and HCL Techn could look at offering cost-effective

solutions that successfully integrate their existing offerings with remote



One could argue that that these IT companies would find

themselves in unfamiliar and difficult terrain, as they do not have any

experience in business process outsourcing areas like customer services and

accounting. This hardly matters in an industry that is populated with companies

of all hues. But competing with traditional call center companies like Convergys,

Sitel, Teletech and big time outsourcing firms like KPMG, PwC and Arthur

Anderson, is a challenge.

IT companies venture into





TCS Intelenet Mumbai
Satyam Chennai
Wipro Spectramind

(equity partnership)


MsourcE Pune/Bangalore
Iflex eServe



Serve Technologies

These companies are unlikely to focus on technical support or

direct-marketing campaigns and will probably be eyeing the business’ processes

of their clients. While there are other companies doing the same, they are

focussed on single processes like CRM as in the case of Daksh. The IT companies,

on the other hand, would be looking at the complete set of business processes

that could integrate functions like billing, invoicing, credit collection, tech

support and application selling. These could be at some point, integrated with

other processes like ERP and SCM. Remote services companies like Msource (Mphasis)

have already announced their intention to offer total end-to-end services (in

the areas of technology architecture, design and development, network design and

implementation, etc) in collaboration with their parent company.


Different strokes for different folks?

While some have sought the acquisition of remote services companies abroad,

others have set up wholly owned subsidiaries or joint ventures. Still others

have sought to invest in the existing remote services companies. HCL

Technologies has acquired the well-known Apollo offshore call center in Belfast,

in Northern Ireland from British Telecom, and plans to integrate it with its

Noida-based remote services center.

Satyam, Iflex and Mphasis have set up their own remote

service centers. Wipro has invested in an existing remote services company–Spectramind.

TCS has tied up with HDFC. Infosys’ foray is still in the planning stage.

TCS’ partnership with HDFC is an example of the coming

together of the two different but mutually beneficial set of expertises. While

HDFC is likely to contribute its expertise in service quality, project

management and training to the JV, TCS would be relied on for technology and

international marketing exposure. Besides, banking application is the dominant

source of revenue for TCS with a long list of banks among its overseas clients.

The jury is still out on how these IT companies would fare in

the remote services business. But the way these companies redefined the

parameters of the software services business,could be an indication of the times


Ravi Shekhar Pandey/V&D

In New Delhi