http://economictimes.indiatimes.com/articleshow/432244.cms
The Economic Times Online
Infinite plans BPO entry
THE UPINDER ZUTSHI INTERVIEW / MANISHA SINGH
[ MONDAY, JANUARY 19, 2004 12:28:17 PM ]
The industry has come a long way in the past two years'
After a two-year slump, which almost robbed the IT industry of its
hallowed sheen, there seems a revival in sight. According to IT and
telecom advisory firm IDC, as worldwide information technology
spending returns to solid positive growth, a "tech resurrection" is
slated for 2004.
But will the revival be able to take the IT industry to its old glory.
What have been the lessons from the two year slump? Who would be the
new growth engines? Will BPO deliver for the Indian IT industry, where
dotcoms failed? Upinder Zutshi , COO of Infinite Computer Solutions, a
five-year-old company which has worked its way up to Nasscom's Top 20
IT software and service exporters list, talks about the mood in the
Indian software industry and the BPO wave.
Q. How do think the SW exports landscape in the country has changed in
the last two years?
The last two years have been fairly dynamic for the Indian software
industry. The segment has witnessed high growth rates with increasing
volumes of business coming into the country, spurring competition and
the stabilization in billing rates. The high growth has also flagged
off the imminent consolidation in the industry.
Q. Do you think the Indian SW companies have learnt some lessons from
the last two years of slump?
Yes, the industry has come a long way in the past two years. The
decrease in overall demand taught most companies the value of not
spreading themselves too thin but rather focusing on core areas, and
building domain expertise to increase process efficiencies and
differentiate themselves from competitors. Companies have also started
emphasizing on the client service part of the relationship, and are
starting to focus on delivering value and not just lower costs to the
customer. These are factors that have determined the success of most
industries in the past and yet very few companies apply these in the
beginning.
Q. What are Infinite's plans for the BPO market? Don't you think BPO
is going down the value chain for a SW company?
We are planning to acquire a BPO company and an IT services company
with expertise in the BFSI vertical. These acquisitions are in line
with our corporate strategy to extend end-to-end solutions and to
cross-sell BPO capabilities to our existing clients and services we
plan to offer will be high on the ITES value chain. I don't think BPO
is really a step down in the value chain for software industry. Each
of them is a different category of IT-related offerings, and requires
different types of skills and expertise. Some high level and some low.
For instance, there are several IT services companies doing low-value
IT services work.
Q. Do you plan to provide BPO services to only consulting and SW
services clients, or will be offering them on a standalone basis?
We are still in the process of finalizing the acquisition of a BPO
company. It is too premature to respond to this.
Q. Fiscal '03 has been a year when the industry hired in droves, but
just could not seem to get commensurate returns. Please comment.
In the year ending March 2003, the software and services segment grew
nearly 30 percent which is below the "usual" 50 percent but is still
pretty strong. We need to remember that high returns on low
investments usually only occur in the early stages. As the initial
euphoria dies, competition creeps in and the industry matures - rates
of growth naturally slow down.
In fact the companies which continue to do well, do so because of
their ability to respond to that market situation and not so much
because of the market opportunity itself. At such a time, it's
important that companies not stop investing in the industry as that
perpetuates the slowdown. So if for sometime, the return on investment
is lower than it has been in the past, it's not something we need to
really be worried about.
Q. Customized application development and maintenance have
traditionally been the mainstay of Indian services exporters. Do you
also see some new areas emerging?
Some of the emerging areas for the Indian software industry are
product data management, content management, enterprise application
integration, business intelligence, wireless applications and straight
through processing. Among the verticals, we see growth coming from, u
tilities, telecom services, retail, healthcare, and government.
Amongst these, Infinite already operates in the Utilities, healthcare
and government segments, with the bulk of our revenues coming from the
utilities vertical. We also see the government space as a strategic
area of opportunity.
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