CSC has taken the inorganic route to growth with a vengeance and this had a
significant impact on its India operations. It acquired Covansys for $1.3 bn:
this brought in six delivery centers worldwide, accelerated the growth of CSCs
strategic offshore offerings in verticals like telecom, healthcare, life
sciences and retail. The acquisition of First Consulting Group for $365 mn, on
the other hand, enhanced CSCs healthcare offerings, further expanding its
global delivery capabilities. While the jury is still out on whether this
inorganic growth path could help CSC in these troubled times, Raj Vattikuti,
group president, CSC India, spoke exclusively to Dataquest. Excerpts
What is the role of the development center that CSC runs for Mercator, the
IT division of Emirates? Is this Dedicated Development Center (DDC) affected by
the recent slowdown in the airline industry?
The Dedicated Development Center (DDC) in Bangalore was part of a previously
announced contract signed between Mercator and Covansys, a company now merged
with CSC India.
Working with CSC India, Mercators new DDC offers its travel and
transportation industry clients scalable IT services that include product
development, applications development and maintenance, testing services,
technology consulting and project management across a range of technologies like
Java, Oracle application, data warehousing, .NET, ERP and other niche
The DDC helps in energizing the Emirates Groups business expansion plans and
strengthen Mercators existing development capabilities, and in positioning it
as a leading IT solution supplier to the aviation industry. The inauguration of
the center has been followed by almost four years of project association between
the Emirates Group and Covansys. Emirates Group, and in particular Mercator, is
a strategic account for CSC India and we want to provide the best services to be
a part of their aggressive growth plans.
I do not see any impact on the DDC with the slowdown in the airlines
Could you shed some light on CSC and the Bombardier tie-up? While
currently the arrangement is restricted to IT infrastructure outsourcing, will
it signal CSCs later foray into engineering services too?
We have renewed our IT outsourcing agreement with Bombardier Transportation,
an operating group of Bombardier. in June this year. The new seven-year $1.2 bn
contract is an extension and expansion of services that began under a 2002
contract in 2002 valued at $700 mn .
Under the new agreement, we will continue to provide Bombardier
Transportation with a full range of infrastructure outsourcing services
including desktop, service desk, network and application management services for
more than 20,000 users at sites across 33 countries. In addition, CSC would also
provide overall integration for service ticket tracking and reporting, that will
enable end-to-end service management across Bombardiers IT environment.
|Rajendra B Vattikuti, group president, CSC India|
This renewed agreement with CSC ensures that Bombardier employees have
quality IT services and support, 24 hours a day, 365 days a year, from anywhere
in the world. Our global IT services expertise and legacy of experience in the
manufacturing and transportation industries position us well to help Bombardier
achieve its business goals.
CSC has pioneered relatively esoteric technologies like SOA and SaaS. Can
you provide more details on the magnitude of the work done and the specific
nature of the work?
SOA sure is CSCs proven end-to-end approach to creating a service-oriented
architecture that enables the client enterprise to respond rapidly to market
changes with new products and services. Consisting of a set of seven services
that address the entire SOA lifecycle, SOAsure uses proven tools, processes,
methodologies, and accelerators to assure cost-effective development,
maintenance, and support.
SOAsure services are aligned with the needs of the clients unique business
environment and provide end-to-end flexibility. The current customer engagements
include a leading global financial investments management company and a global
automotive giant where it is being used to build anywhere and ship anywhere
capabilities for cost effectiveness and faster time to market. This is by
modernizing and integrating disparate supply chain and procurement systems and
SAP implementation now seems to be a lucrative area, with the battle for
Axon just getting over. With CSC having long time SAP expertise, what is your
take on this front, and future plans?
Our global SAP practice with over 3,900 dedicated SAP consultants across 23
countries, has successfully completed more than 1,500 SAP implementations
CSCs proprietary tools and intellectual capital are applied to every
engagement. On-site or off-site, near-shore or offshore, we will help you lower
your implementation costs by leveraging a global network of resources. CSCs
global practice dedicated to supporting SAP systems combines a wealth of skills
and physical resourcesincluding world-class, full service outsourcing,
consulting and systems integration teams. As one of the first global SAP
Services Partners, we are also a hosting partner for a range of industries that
include aerospace, defence, public sector,and chemical, oil and gas industries.
This is a very strategic service offering for our clients and our goal is to
grow it aggressively.
Is the Covansys integration now complete? Other than top line enhancement,
what other benefits have been accrued?
We acquired Covansys in July 2007 and have achieved full integration of its
operations into the companys model of delivering One CSC to customers and
business. With the acquisitions, CSC nearly doubled its headcount in
Indiasurpassing its annual headcount goaland is now home to the companys
second-largest concentration of employees. CSC also achieved a 90% CAGR in terms
of headcount in India during the last five years. The companys fully integrated
World Sourcing center in India provides end-to-end India-led global delivery to
its customers worldwide, has attained 100% revenue growth in fiscal 2008, and
has increased its operations from four to seven locations in India.
For us, an aggressive offshore strategy became increasingly important for
serving our clients with a global service delivery approach. The strategy was to
not only add low-cost resources but also provide innovative value from its
global network of service-delivery centers which could blend services such as
consulting and process improvement with highly skilled application services and
deep industry knowledge. Acquiring an established, highly respected services
company with a major presence in India was the best way to meet customers needs
|CSCs global practice dedicated to supporting SAP systems
combines a wealth of skills and physical resourcesincluding world-class,
full service outsourcing, consulting and systems integration teams
With this acquisition, we have significantly advanced our Global Strategic
Growth initiative by strengthening our capabilities and presence in India as
well as creating an additional market channel for the industry, consulting and
outsourcing solutions. This action reinforces our commitment to build a more
robust offshore platform and will enable us to offer a broad range of
capabilities to clients directly from India or through our existing businesses.
This acquisition further intensifies CSCs strategic goals of increasing
shareholder value and growing its business both organically and inorganically.
In light of the slowdown in the US market, especially, and the other
markets, how does CSC plan to tweak around its Global Delivery Model?
CSCs Global Operating Model blends industry expertise with world-class
delivery. Through the support of CSCs standardized management and delivery
processes and other best-practice tools and methodologies, world sourcing brings
the highest quality services and resources. As a global company, CSC can fulfill
the business needs at the point of delivery or wherever CSC has the most
cost-efficient capability to perform those services. With CSCs World Sourcing
capability, the client can take advantage of our end-to-end Global Service
Delivery approach. Our goal is to offer our clients these capabilities in every
deal, to help them in transforming their business.
CSC has established technology centers of excellence or competency centers.
SEI CMMI, an industry standard measurement tool, enables work at each of these
centers. Using this standard ensures that no matter which world sourcing
location the client chooses, the work will be performed with the same
CSC has encouraged gender diversity in its workforce. Can you elaborate on
this as a business strategy?
Diversity programs have multiple dimensions in a global organization like
CSC. In the Indian context, gender diversity is an important factor that needs
to be addressed. Given the Indian socio-cultural context, CSC Indias Diversity
Programs focus is on gender diversity. At a global level a diversity council
has been formed which is responsible for giving directions to this initiative.
As we talk of India, a similar Diversity Council which focuses on gender
diversity has been set up comprising the senior management group, which is
responsible for giving direction and setting the focus right for the CSC India
gender diversity initiative. One such gender diversity initiative launched in
CSC in India last year with an objective that we call SEED. It stands for
Sensitization (creating sensitivity to differences and raising awareness of
ones own prejudices that unwittingly surface in business decisions), Engagement
(to enlist the support of everyone even if they do not benefit directly from the
initiatives), Empowerment (help women explore and develop their personal
understanding of what it means to be a woman and what it takes to succeed in our
society today) and Development (to develop effective leadership, this goes
beyond vision, strategy, communication, and charisma).
CSC was supposed to double its headcount in 2008. With the slowdown
affecting offshore business, there is a cap on fresh hiring by most companies.
What is CSCs take?
We have indeed doubled our headcount in India surpassing our annual
headcount goal. India is now home to the companys second-largest concentration
of employees. CSC also achieved a 90% CAGR in terms of headcount in India during
the last five years. Our business model is pretty stable and a major portion of
revenue comes from long term outsourcing contracts. CSC is on track with its
strategic plans and we are pleased with our progress in India and other parts of