Thursday, September 2, 2010
Genpact has recognized various important aspects like standardized offering through alliances, organic growth by focusing on emerging markets like India & China and Inorganic growth (In talks to acquire Intelenet Global Services). Genpact’s India arm employs around 2000 professionals servicing around 10 – 12 customers (Domestic clients). As a part of its strategy to provide cost competitive services Genpact has hired 90-95% of fresh graduates to provide services to its Indian clients and rest 5% are hired from competitors, internal teams and top executives. India domestic business arm is expanding with addition of another 1500 employees by year end to tap domestic market opportunity.
Genpact also realized the importance of alliances with ERP software providers to standardize its service offerings across clients for optimizing process effectiveness and efficiency. Genpact has partnered with leading insurance asset provider MajescoMastek and ERP vendor NetSuite deliver more replicable processes to its expanding client base.
Genpact has over 40,365 employees across the globe providing BPO, IT and KPO services. About 73% i.e., 29466 employees are located in delivery centers in India. It’s NCR (Delhi and Gurgaon) delivery center alone employs around 18,000 professionals for providing BPO and KPO services.
Friday, August 13, 2010
Back in 2006/2007 Cognizant was just an emerging company and not a close competitor for IT giants like Infosys, Wipro, TCS, or MNC giants like IBM or Accenture both in terms of revenues & talent. But all that has changed in the last three years. Quarter after quarter Cognizant has outpaced the Indian giants i.e., TCS, Infosys, Wipro posting double digit growth numbers. Infact Cognizant was one of the only IT services firms in India to hire aggressively during recession. Cognizant recruited nearly 20,000 professionals to prepare for the renewed demand after recession.
So what is it about Cognizant that makes them different? Well everything. We have heard stories that Mr. Lakshmi Narayanan, Cognizant’s vice chairman does not believe in consultants. He would throw a highly cited survey into the dust bin and listen to real people. Current CEO Francisco D’Souza is a good mix of numbers, people’s person and absolute empathy to client needs.
- Company has taken some bold steps and adopted some path breaking strategies to grow much faster than many of the leading IT services firms around the globe. In the year 1998 Cognizant decided to plough back any profit earned in excess of 20% back into the business.
- During the same time frame Cognizant adopted “Two in a Box” Relationship Model as large percent of its workforce was located offshore (India & China). For every client it decided to have a manager on the ground in India and one on the ground at the client site. Currently Cognizant has around has 500-600 accounts, served by 750 client managers. (These accounts have been built by a team of about 70 sales professionals around the world) Company added one layer of senior management to be able to follow the big shifts in the BFSI sector and catch opportunities early. It has always remained client centric organization spending about 23% of its revenues on sales and general administration expenses as against an Infosys which spends about 12%.
- It follows a factory like delivery model or “run-of-the-mill application maintenance work” with two shifts for commoditized projects like payroll applications in its Coimbatore center saving infrastructure costs like office space, computers and software licenses while delivering twice the work.
- Cognizant attributes its increasing revenues to its strategy of investing even during the recession and being able to sustain high customer service levels. In a recently concluded customer satisfaction study, the company was ranked the leader among twenty-five India-based and global service providers and was the only firm with no dissatisfied clients.
- Cognizant continued to expand its global footprint through acquisitions and recently acquired Galileo, a boutique firm focused on testing services in the French market. Galileo’s services help French customers to optimize and extend business performance through IT system measurement, management, and testing. Outsourced testing services have great potential in the coming years, the industry is expected to grow 19% annually over the next five years to reach $17.7 billion by 2013. With over 12,000 professionals, Cognizant can accurately claim to be the world’s biggest testing service provider.
- Even without a home grown product in the BFSI segment (Unlike TCS or Infosys) it has been very successful with 42% of its revenues coming in from BFSI clients. It tied up with Temenos to go to market jointly especially in the Asian and Middle East market.
However biggest worry for Cognizant today is the its inability to grow its BPO practice. BPO is a major differentiator and an entry point to cross-selling other IT services. Today BPO constitutes about 5% of Cognizant’s revenues and the firm is aggressively planning to plug the gap in its services portfolio. The only way to plug this gap is through acquiring mid to large size BPO firms.
Another big worry for Cognizant is the lack of second layer of leadership who can step into D’Souza’s shoes when it is in sniffing distance of TCS, Infosys and Wipro in terms of revenues from BFSI segment. During its growth phase it had four strong pillars (Kumar, Lakshmi, D’Souza and Chandra) who could lead the company through tough period.
Monday, August 9, 2010
Indian IT-ITES Review 2010 (July 2010 - Gaurav Vasu)
Indian IT-ITES sector generated revenues of about USD 73.1 billion in FY2010, a growth of 5.4 per cent over FY2009. Sector provides direct employment to 2.3 million people and contributes to about 6.1 per cent of India's GDP. Indian IT-ITES sector continues to be export oriented with about 69 per cent ($50.1 billion) of India's total IT-ITES sector (US still being a major contributer). Indian IT-ITES sector created 90,000 addition jobs for FY2010 and as per Nasscom estimates next year Indian IT-ITES sector would add another 1,50,000 (Net hiring) professionals for FY2011.
Top 20 IT Exporters from India (Includes services and product firms)
- Tata Consultancy Services
- Infosys Technologies
- Cognizant Technology Solutions
- HCL Technologies
- IBM India
- Accenture India
- Tech Mahindra
- Oracle India
- Patni Computer Systems
- Hewlett-Packard India
- CSC India
- L&T Infotech
- Prithvi Solutions
- Polaris Software Lab
- Mindtree Consulting
However companies across the globe are focusing on reducing capital expenditure hence concepts like "Cloud Computing and SaaS" have taken a center stage. Global economies especially US and Europe are still battling with lower private consumption and high unemployment. Slight recovery in the US is largely due to government spending & stimulus.
While MNC's and top five Indian IT-ITES players are doing well most mid to small size companies are still struggling to stay afloat. Mid and small IT-ITES players have failed to close deals in the domestic market.
Friday, January 29, 2010
Monday, January 11, 2010
Sunday, January 3, 2010
Faculty Crunch - Obstacle to growing engineering services market in India
As per the recent Nasscom-Booz study India's IT engineering services is set to touch $50 billion by 2020. India is the ultimate destination for offshoring engineering services for diverse industry verticals largely due to lower engineering costs, growing addressable domestic market and presence of service providers with capability of providing high-end engineering services on various products. Indian service providers are now looking to tap growing opportunity in ESO (engineering services outsourcing) space. But one of the biggest obstacle to growth could be faculty crunch at India's prestigious institutions like IIT's and IIM's. Growth of engineering services and availability of quality engineering workforce depends on the engineering education system in India. However the faculty crunch prevails in most of the major Indian institutes. The Indian Institute of Science (IISc) at Bangalore does not have even half the teachers it needs; the same situation prevails at the three Schools of Planning and Architecture (SPAs). In fact, all the centrally funded institutes - whether it is the Indian School of Mines (ISM) at Dhanbad or the NITs that are spread across the country - are currently functioning without the necessary number of professors.
The IITs have the largest share of the crunch with an overall deficit of 1284 teachers out of which 222 teachers fall short at IIT- Bombay alone. The situation is similar at IISc, which is pioneer at the science and education front in contemporary technologically important fields, and the SPA, a specialized university, the only one of its kind that provides training in different aspects of human habitat and environment.
Experts believe that the inability to find adequate and qualified professors may seriously hamper India's ability to groom top-notch engineers, scientists and businessmen of the future. Indian government will have to soon take corrective measures to overcome the lack of supply of quality professors to grow India's engineering services market.