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.