The Triple three Target...

Eventful. That’s how most people in the information technology industry

would describe the last 24 months. From the heady highs of the IT boom to

grappling with the alarming dip in revenues to slow but sure signs of recovery…

having been there and done all of this and more, change has been the only

constant in the lives of IT companies and their people during this tumultuous

period.

It

has been the same with Birlasoft Inc, the software development and consulting

arm of the $1.5-billion CK Birla Group and General Electric (which holds

approximately 20% stake).

"It’s been a phenomenal journey," reflects its US based CEO Atanu

Banerji.

"Every six months in the last six quarters has seen us evolve into a

different company and culture. Just four years ago, we couldn’t compete with

the likes of Sapient, Infosys and Wipro. Today, we are in a position to stand up

against them."

Given its relatively small base, Birlasoft has traditionally been a company

on the high growth path. And like most Indian software services companies, it

has always been highly dependent on the US market (even today, 60% revenue comes

from the US). In fact, over the years, Birlasoft has structurally been seen as

US-based, with the thought leadership based out there, close to the customers.

Recent moves have focused on a strategic shift to anchor operations out of

India. As work moved from the onsite to the offshore model, the structure now

looks like this–700 people in India, 450 in the US, 190 in Australia and 60 in

the UK. A new development center in Chennai with a capacity of 500 is expected

to be operational by June’ 2003.

Start-up year: 1995 Employees: 1400 Headquarters: Noida Branches: Chennai, Mumbai, Bangalore, USA, Australia, Singapore, Middle East Verticals: BFSI, software product companies, manufacturing, healthcare, energy. Clients: GE, Caterpillar, Morgan Stanley, Best Software, Bank of Tokyo Mitsubishi, Digex (an MCI company)

Quick reactions to the slowdown and the subsequent drop in revenue saw the

company adopting a de-risking strategy to reduce dependence on the US market.

The business model changed and the services grew in dollar value. Chief

financial officer (CFO) R Chandrasekharan (better known as RC within Birlasoft)

held a tight leash on the company kitty questioning every resource.

"A significant portion of the company’s resources were based in the US

earlier. In the year 2000, we started moving all non-customer facing operations

like the creation of proposals, pre-sales and communication to India,"

points out RC.

The year 2002 also saw management reorganization with a number of senior

resources added to the management team particularly in India to help build

offshore capability and bandwidth. In this period Birlasoft also added more

service offerings including Peoplesoft, WebMethods and data warehousing besides

the existing WebServices, Siebel, quality assurance and maintenance.

The focus on ramping up its offshore presence saw significant investments in

the infrastructure in terms of facilities, hardware, software and resources.

As

a roadmap for the future, Birlasoft plans to continue to consolidate its

positioning as an offshore company. As for the three-year plan, the aim is to be

among the top three service providers in three verticals, three horizontals and

three geographies. The vertical focus currently is on BFSI (banking and finance

services and insurance), SPC (software product companies) and manufacturing.

Healthcare and energy are the other two focus areas.

Given the vast US and UK markets and the density of software service

companies operating there, the "Top Three" aim cannot apply to these

geographies. One of those geographies then, is Australia. Birlasoft already has

190 people in Australia.

Plans for the other two geographies have not been outlined yet and the

company’s current focus remains on the US, Europe and APAC (Asia-Pacific

region including Australia). And 60% of revenue still comes from the US.

The three horizontals are quality assurance services, EAI and pre-sales

investment and technology domain building. "The past few months have seen

significant investments in our PeopleSoft competency and have built critical

mass. We have also built competencies in Vision Plus and Quality Assurance

services," informs chief operating officer (COO) Kamal Mansharamani, who

spearheads operations in India.

Changing horizons



Executive vice president Avinash Singh and one of the longest serving

employees, takes us back to the company’s nascent beginnings hatched out of

chairman C K Birla’s corporate office way back in 1992. The group’s foray

into information technology began with a joint venture called Birla Horizons

International.

"To put it bluntly, we were a body shopper for Computer Horizons with

plans to eventually get business from Fortune 500 companies. This never

happened," recalls Singh. Initially, Birla Horizons International

concentrated on professional services with offices in New Delhi, New Jersey and

California. Birla Horizons International was christened Birlasoft after

acquiring the equity stake of its joint venture partner Computer Horizons

Corporation Inc of New Jersey, US. In the late 90s, GE picked up an

approximately 20% stake in the company. Birlasoft had been one of GE’s

preferred vendors.

The GE story



Industry sources say that close to 60% of Birlasoft’s business comes from

GE. Birlasoft’s operations in the early days were focused on providing

professional services and its predominant onsite model did not translate into

high margins. The GE Equity investment set the stage for a rapid climb up the

value chain. Birlasoft’s GE-dedicated development center began operations in

April 2001.

While acknowledging that recognition from GE did boost Birlasoft’s

credentials especially within the customer pool, CEO Atanu Banerjee emphasizes

that the company has twice the number of people working on non-GE accounts as

compared to the GE-dedicated workforce. "No doubt, our largest customer

today is GE and the business from GE is growing. However, we do have a

de-risking strategy that involves reducing dependence on GE," points out

Banerjee. Key benefits of the GE deal include scaling up of offshore facility,

adoption of best practices and the six sigma as per GE standards and of course,

the best references from GE.

"Once we meet GE’s expectation, we are unique for the non-GE world.

The GE ratification elevates us to a level where no more questions are

asked," says COO Kamal Mansharamani cautioning that GE itself is a tough

task master.

"SLA’s (service level agreements) are clearly defined and there is

strict tab on bug fixes and measuring variations on deliverables. And once you

meet their standards, they keep raising the bar, ensuring that you move

ahead," he explains.

The people factor



The company recruits not only from India but Pakistan, USA, Singapore and

Australia as well. About 10% of its US staff and 80% of Australia staff

comprises local recruits. The company has been following the practice of

reaching out to employees across the globe at least once a quarter. "The HR

department calls each employee to inquire about his or her well being.

These calls used to be made from the US, now they are made from India,"

informs A Prabhakar Rao, vice president, human resources. Rao points out that

managing the expectations of employees in diverse geographies and cultures is a

challenge, best tackled by continuous communication.

Like so many other IT service companies, Birlasoft too has dipped its fingers

in BPO (business process outsourcing), albeit for creating a helpdesk for some

of its own customers. From a small InfoTech arm of a largely non-IT group to a

global services company, from dizzying growth to a drop in revenue and furious

expansion, it certainly has been an eventful journey for Birlasoft. So, what’s

next? An IPO (initial public offering)?

"Eventually," says Team Birlasoft. And the precondition they have

laid for themselves is that they show six straight quarters of solid results

before the market appears ready for them to take the plunge. After the roller

coaster ride that the industry has just been through, that’s challenge all

right.

Their time starts now.

Manjiri Kalghatgi

The Men Behind Birlasoft

Atanu

Banerji, CEO



An IT industry veteran of 30 years, Banerji joined Birlasoft in 2000. An IIT

Kharagpur alumni, he pioneered the concept of dedicated Applications Development

Centers for overseas clients, winning the Nasscom Award for marketing

innovation. He has the All India Master Pairs for Contract Bridge and Birlasofts'

Table Tennis championship under his belt.

Kamal

Mansharamani, COO



As COO, Mansharamani is responsible for the global delivery function as well

as the APAC, Japan and Middle East markets. Under his leadership, Birlasoft has

achieved CMM-Level 5 certification in a record time of 12 months. His frequent

flyer status supports a voracious reading habit and he has a running tab at many

airport bookstores!

A

Prabhakar Rao, vice president (human resources)



An XLRI graduate with over 21 years of experience, Rao is an expert in

performance management, strategic HR initiatives, training and development. He

is currently handling digitization of all HR functions and completing the

company’s PCMM initiative.

Avinash

Singh, executive vice president



A gold medallist in electrical and electronic engineering and a certified

financial analyst, Singh has been with the Birla group since 1989. He

successfully helped restructure Birlasoft from a generic consulting company to a

full life-cycle software solutions company. In 2001, Singh took on the mantle of

executive vice president responsible for sales in USA and Europe.

R

Chandrasekharan, chief financial officer



Armed with the triple accreditation from the Institutes of Chartered

Accountants (CA), Company Secretaries (CS) and Cost Accountants (ICWA), RC spent

around 25 years in several operating and corporate finance roles. He loves

photography and dreams of becoming a qualified National Geographic free lancer.