Birlasoft plans major ramp-up with $15 million investment

Shipra Arora / New Delhi

After lying low for some time, Birlasoft, a $73.4 million C K Birla Group company with equity investments by GE Capital, has outlined major plans for ramping up its operations in the second half of 2003. The expansion involves major development activities, with the addition of two new offshore development centres in India by the end of the year. This entails an investment of around $15 million and more than doubling of its workforce from the present 1,500. While the first development centre in Chennai will be operational by August 2003, the second one, the location for which is yet to be decided, will be up and running by the year-end. In addition to this, company also plans to enter the BPO business in a year.

Said Kamal Mansharamani, COO, Birlasoft, "The two new centres are aligned to take care of growth next year. Around $6 million is outlined for the Chennai development centre with the remaining $9 million going into the second centre. The majority of the $6 million has already been invested in the centre, which will have a capacity of around 600 people." The major thrust for the company, however, will come with the second centre, which will boast of a headcount of 1,500 to 2,000. People will be hired in a phased manner and the centre will get to its full capacity by the end-2004. Though the exact location for this centre has not been decided as yet, company officials confirmed that it would be in the National Capital Region.

With the setting up of the second centre by the year-end the company’s headquarters for the Indian operations will be shifted from the existing Noida centre to this centre. With a total of three offshore development centres, Birlasoft is expecting almost 100 percent growth in its offshore business revenues. The company recently found its way into Nasscom’s list of Top 20 Indian software and services exporters. The company was ranked number at number 15.

Also in the pipeline are plans to enter the BPO business. Though declining to comment on the exact timeframe, Mansharamani however confirmed that Birlasoft would be entering the BPO business in the next one year. "This will depend on how demand from our existing customers evolves. We are already receiving feelers from them for outsourcing their business processes as well and we are gearing ourselves towards this opportunity," he added. The focus for Birlasoft in the BPO space would be on the financial segment. The company’s strategy is to offer BPO services to complement its existing services offerings in order to be able to provide an end-to-end solution to its customers. It is planning to develop its own in-house set up under the Birlasoft brand name itself and is not planning to acquire another BPO company or spinning off a separate BPO outfit as has been the case with most software and services bigwigs.

In terms of verticals, the company has outlined its focus on the banking, financial services and insurance (BFSI), healthcare and manufacturing segments.

BFSI presently accounts for almost 36 percent of the company’s revenues, followed by manufacturing at 22 percent and healthcare at 5 percent. The company is presently building up its presence on the healthcare side and recently conducted a limited pilot launch for its Total Healthcare Management solution, eMedicare, in the domestic market. A full-scale launch is planned by September this year. After that, the solution will be launched in the international market. In addition to this Birlasoft also has some presence in other verticals like retail, logistics and utilities.

In terms of market presence, the company has made rapid strides in the last one year. It has garnered major successes in the Australian market, where it has grown its presence from almost nil to 15 percent of total revenues within a year’s time. While the US will continue to be the mainstay market for Birlasoft, the company will be building upon its Australian success for a greater foothold in the APAC region. It is targeting Singapore and the Malaysian market. It opened an office in Singapore in April 2002 to build APAC business.