After manufacturing it is now the turn of software development to go the outsourcing way. Vikram Jaipuria, president, Mphasis speaks about the various issues and challenges that MphasiS faces with this business model
What key trends have you witnessed with regards to outsourcing?
There are challenges and pressures in the market place, due to recession over the past three years. To top that Asia-Pacific was affected by SARS and the Middle East by the Iraq war.
There are challenges and pressures in the market place, due to recession over the past three years. To top that Asia-Pacific was affected by SARS and the Middle East by the Iraq war.
But the general outlook towards the software side has been positive. The general acceptability of offshore development is higher now than earlier. Customers in the US and Europe have accepted offshore as a strategic way of value addition. Because the delivery cost is lower and quality provided is higher, clients are more willing to experiment with offshore. India is considered to be a mature region for offshore work. More than a third of the Fortune 1000 companies already outsource their services from India. These figures will double over the next couple of years as client spending goes up. We should also see companies outsourcing strategic IT activities like application architecture and design in the near future. Today, the US contributes close to 67 percent of our business, UK and Europe account for around 11 percent. Even Japan is a key market for us with a revenue contribution of more than 10 percent.
What are the advantages MphasiS offers its clients?
We provide our clients with end-to-end services, including application development, application integration, mainframe, testing and architecture designing. By leveraging our India advantage, we help our customers to save anywhere between 40-70 percent of their cost. Our virtual team model also enables faster time-to-market without compromising on quality. There are a few issues that clients are concerned about. Today change is rampant. But we have earned customers’ trust and assured them of our ability to adapt to these changes. Our virtual team model also enables us to deliver low-cost quality work to our global clients with offices spread across diverse geographies. Also, risks are mitigated since the clients are usually in full control of the projects.
We provide our clients with end-to-end services, including application development, application integration, mainframe, testing and architecture designing. By leveraging our India advantage, we help our customers to save anywhere between 40-70 percent of their cost. Our virtual team model also enables faster time-to-market without compromising on quality. There are a few issues that clients are concerned about. Today change is rampant. But we have earned customers’ trust and assured them of our ability to adapt to these changes. Our virtual team model also enables us to deliver low-cost quality work to our global clients with offices spread across diverse geographies. Also, risks are mitigated since the clients are usually in full control of the projects.
We have been able to retain top professionals who have assured our clients of top quality. The fact that we have delivered over 100 projects a year shows our commitment to quality as well as our clients.
Could you elaborate on your virtual team model?
The virtual team model enables our engineers to spread across geographies to work in tandem. This model assures high quality to the client as we can have specialists in a particular field to work together from different locations, thus forming a virtual team. The onsite team and the offshore team are connected by means of a dedicated virtual private network (VPN) or leased lines. The model not only provides tremendous cost savings but also enables both the customer and MphasiS to access remote environments on both sides, providing a seamlessly integrated development environment.
The virtual team model enables our engineers to spread across geographies to work in tandem. This model assures high quality to the client as we can have specialists in a particular field to work together from different locations, thus forming a virtual team. The onsite team and the offshore team are connected by means of a dedicated virtual private network (VPN) or leased lines. The model not only provides tremendous cost savings but also enables both the customer and MphasiS to access remote environments on both sides, providing a seamlessly integrated development environment.
How have recent developments in the US affected your business?
The environment is becoming sensitive. Visas in the US are taking longer due to tighter processes. The US being a capitalist economy, such challenges will always be there. But these are not long-term hurdles. When manufacturing got outsourced, people lost jobs. When things got automated people lost jobs again. Indian companies have created more jobs in the US than others.
The environment is becoming sensitive. Visas in the US are taking longer due to tighter processes. The US being a capitalist economy, such challenges will always be there. But these are not long-term hurdles. When manufacturing got outsourced, people lost jobs. When things got automated people lost jobs again. Indian companies have created more jobs in the US than others.
The overall job loss in the US is because companies out there are failing. But we have been worried about the Rupee strengthening. India is used to see the Rupee depreciating. But these risks have been hedged by the purchase of forward covers.
What is the roadmap for MphasiS’ future?
We are consolidating our position vis-à-vis the client. We target clients who will provide us with sustained business and add value to our relationship. We want to be more global and so we are looking a doing more work outside the US. We have bought a development centre in China, which will be doing work for clients in Japan and Singapore. We expect MphasiS to grow by 25 percent this year. In terms of priority we want to continue our robust growth by focusing on clients. But we have to be cautious because the economy is not stable.
We are consolidating our position vis-à-vis the client. We target clients who will provide us with sustained business and add value to our relationship. We want to be more global and so we are looking a doing more work outside the US. We have bought a development centre in China, which will be doing work for clients in Japan and Singapore. We expect MphasiS to grow by 25 percent this year. In terms of priority we want to continue our robust growth by focusing on clients. But we have to be cautious because the economy is not stable.
This interview first appeared in Express Computer.
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