Daksh: On the fast track to growth

Currently employing 1,700 people, Daksh is the largest non-captive outsourced call centre in the country and plans to be 2,500-strong by April 2002. 16 Mbps of IPLC bandwidth plus 12 Mbps of Internet connectivity with US customers would make Daksh the largest user of bandwidth in the call centre industry in 2002. This would be further complemented by the multiple levels of redundancy through OFC, shared satellite and own earth stations, enabling delivery of outstanding customer metrics.

In 2002, Daksh would consolidate operations amongst its illustrious roster of clients like Amazon, PayPal and Sprint PCS. In the BPO space, it would be the largest Indian co-sourcing company, offering a range of offshore blended customer interaction (voice and data) and remote processing services for Fortune and Digital 500 customers.

According to CEO Sanjeev Aggarwal, Daksh would provide both inbound/blended customer service and back-office processing to its clients in 2002. The main segments where it would be deploying CRM initiatives are hi-tech, e-commerce and retailing, financial services, telecom and travel. It would also be providing high-end services such as IT programming and consulting.

Mastek: Only way to go is up

2001 was probably the worst year in the history of Mumbai-based Mastek, with a revenue downfall in the range of 75 percent. However, 2002 promises to be a much better year, thanks to the recovery being shown by Mastek itself, coupled with the strong showing predicted of the company Mastek formed in joint venture with Deloitte Consulting. Says Ashank Desai, chairman and managing director of Mastek, “We have seen our worst times, and in 2002 we can only go up from here.” However, the outlook is still guarded, as Mastek expects to grow organically only by 10-15 percent in 2002. This optimism stems from the fact that Mastek expects substantial revenue generation, to the tune of half of its total revenues, from its projects in Europe.

This, however, does not mean that Mastek’s US sojourns are at an end. Even in 2002, the US is supposed to contribute close to 50 percent of revenues. And the Mastek-Deloitte JV company with its expertise in EAI and applications outsourcing is likely to be this driver of growth. But projects in the UK and Germany are also expected to contribute substantially to the bottomline in 2002. The importance of Europe can be gauged from the fact that pending shareholder approval, Mastek is set to open a new office in Switzerland. However, cultural issues and competition from Eastern Europe might turn out to be slight deterrents in Mastek’s European sojourn.

Even in 2002, Mastek plans to hedge its bets on financial services, especially in the government sector as well as in the telecom space. It also plans to heavily leverage its domain expertise in the insurance segment. However, the billing rate scenario is unlikely to improve much, with Desai terming the situation as “still challenging.” Mastek would be concentrating more on consolidating its existing clients than adding new ones as that would impact its bottomline rather than the topline.

Technology wise, Mastek has big plans on .NET projects in the UK as well as forays into the Oracle suite of products and the embedded space. On the products front, Mastek plans to market its insurance related product in Asia Pacific markets like Indonesia and Malaysia. Desai does not rule out further growth in 2002 by means of an acquisition or other new joint ventures..

PCS: Doing things differently

in 2002, 77 percent of PCS’ revenues would be from US. Besides, it will concentrate on Japan where it already has a substantial presence, and expects to generate 8 percent of its revenues from there.

In Japan, PCS expects to up revenues by nearly 22 percent, obtaining projects from nearly all the big Japanese firms. According to Satish Joshi, senior vice president, PCS, their success in the Land of the Rising Sun has been due to their ability to produce quality software. However, the only bottleneck in Japan might come from the massive effort required to train people in Japanese, besides strong competition from China.

Despite China’s cultural proximity to Japan, PCS is confident of winning Japanese contracts on the basis of its superior quality maintained through its SEI-CMM Level 5 certification. To further assure its offshore clients, both in Japan as well as the US, PCS also intends to complete the Six Sigma quality process in 2002.

Joshi is also confident that cheaper billing rates in China would not curry much favour in the Japanese context. This, because in Japan unlike the US, billing rates are not calculated on an hourly basis but on the total cost of the project. Therefore, PCS’ costs too would be more feasible as overheads incurred would be much higher in the case of inferior quality Chinese software code. PCS is also determined not to resort to cuts on rates to compete with Chinese companies.

PCS intends to add 30-plus customers in 2002, though the main thrust would be on retention of existing clients. With billing pressure still not fully relaxed, PCS would not like to venture beyond its core verticals of insurance, financial services, manufacturing and retail in the coming year.

Joshi stresses that PCS would continue to concentrate on mainframe technologies as well as Oracle’s suite as the back-end, and Web-based technologies on the front end. But esoteric technologies like .NET and wireless/3G would still be used for showcase projects.

TCS: Transformation time for the leader

WHILE TCS is likely to hog the headlines for a greater part of 2002 with its plan to raise around Rs 3,000-Rs 4,000 crore by means of an IPO, internally the theme is aggression, with Economic Value Added (EVA), the financial measure of shareholder value creation that TCS has adopted, being the prevailing mantra. The Tata group firm aims to be among the top ten IT consulting companies in the world, and by April 2002 plans to meet a target of Rs 4,800 crore in revenues and Rs 1,250 crore in profits. This would make TCS a part of the elite $1 billion software club globally. Of total revenues, about 80 to 82 percent will come from pure IT consulting, with products and strategy consulting contributing the rest.

As part of its EVA process, TCS would also be keen on projecting a radical image change from the stentorian days under the F C Kohli regime. The personification of EVA and the introduction of Friday dressing, for instance, are cosmetic changes meant to convey an impression of pace and youthfulness within and outside the organisation. The perception of change towards a more open environment is an important focus on TCS’ 2002 agenda, because competitors like Infosys or NIIT have scored on this front till date.