Spotlight

A steady road to success

For Perot, acquisitions go beyond increasing revenues. The company has a core team of 30 members, which extensively studies and researches the financial and cultural background of an organisation before giving the green signal for acquisition. By Tanu Talwar

Perot Systems Corporation (India), a wholly-owned subsidiary of US-based Perot Systems, is known for offering tailor-made solutions across different industry verticals. The parent company was formed in 1988 by former US presidential candidate Ross Perot. The Indian operations began in 1996 when Perot entered into a 50:50 joint venture with HCL Technologies and formed HPS (HCL Perot Systems). Today, the company has taken complete ownership of the joint venture by buying out the HCL Technologies share in HPS at an approximate price of $105 million.

Headquartered in Plano, Texas, the company has sales and delivery centres across 20 countries. Perot grew extensively in the US for over eight years before it trained its eyes on India and the UK in 1996. It started with the aim of offering a portfolio of consulting and application services, business process solutions (BPS) and infrastructure services.

"From the delivery standpoint India is a great destination. Not one of our deliveries has failed since we began our operations here" - Vardhman Jain MD, Business Process Solutions Perot (India)

Vardhman Jain, Managing Director, Business Process Solutions, Perot (India) says, “During the start-up phase, our challenge was to close sales, get quality resources from the market, create and add new service lines and have a global reach.” By maintaining a strong focus on the core values of the company, Perot was able to overcome these challenges. “What makes Perot different are its core values. This can be judged from the fact that the first formal document that the company released was the value card. The card outlines the basic principles on which the company was formed and the values each employee must abide,” explains Vardhman.

The company’s 400-plus client list includes Lufthansa Cargo AG, Parsons Corporation, Northern Arizona Healthcare, Sentara Healthcare, Northwest Hospital & Medical Centre, National Life Group and the US Federal government.

Its largest client is Tenet Healthcare Corporation, one of America’s leading chain of hospitals. Vardhman elaborates, “Tenet has been our customer since 1990. We provide end-to-end IT support and management to the hospital.”

In fact, Tenet has entered into a new 10-year contract with the company to expand the scope of technology-related services provided by Perot. Vardhman adds, “We have a strong team of 700 members working on Tenet. Under the new contract all the information system functions carried out at Tenet will be managed by Perot. As a result, the information systems departments at the 41 Tenet hospitals that were earlier not managed by Perot would be transferred and managed by the company.”

Faith in Indian talent

Operating out of four key locations in India—six delivery centres with three in Chennai and one each in Noida, Bangalore and Coimbatore—Perot’s Indian operations strengthen a host of solutions provided by its global parent. The 13-acre campus in Bangalore employs 2,000 people and serves as the company’s global headquarters for its consulting and application solutions, the 2,000-strong Chennai facility is at the head of its India-based BPS service and a 25-acre facility in Noida that houses about 2,300 employees focusses on the application and consulting and infrastructure services.

Vardhman says, “From the delivery standpoint India is a great destination. Not one of our deliveries has failed since we began our operations here. Nine of our top 15 clients in revenue terms are served from India.”

A major attraction for the company in India has been the country’s young and talented workforce. Vardhman says, “Nearly 33 to 34 percent of our global workforce is based in India i.e. 6,500 out of the company’s overall strength of 20,000 employees worldwide. We want to capitalise on the rich pool of talent available in the country.”

The company’s consulting and application services teams work with flexible on-site and offshore models on a variety of new technology projects. It provides end-to-end application solutions and services like development, management, migration and re-engineering to companies in the financial, healthcare, telecom and travel space.

The company also offers BPS services that flow out of Chennai. With a base in healthcare and life insurance sectors, the company is also trying to expand its offerings in the financial sector.

Vardhman asserts, “Although life insurance is a new market for us and we are trying to expand our portfolio of services in the sector, we have been concentrating upon the healthcare domain from our incorporation. We process about 65 million BPO transactions per year for our healthcare customers.”

Adds Manish Jain, Senior Manager, Marketing, Sales and Communication, BPS Operations, Perot (India): “Our infrastructure team in India is expanding at an exponential rate. It has grown seven-fold in this area and we are looking to hire tier 1 and tier 2 infrastructure talent from across India.”

The company has launched an additional facility in Coimbatore, which will extend its BPO services.

Acquisitions ahoy!

Though the company plans to grow organically, it’s also looking at inorganic growth strategies through acquisitions to extend and strengthen its list of offering. As a strategy, Perot acquires a company every year. It acquired the Chennai-based Vision Healthsource in August 2003. “With the acquisition of Vision Healthsource, we have been able to strengthen our billing and claims capacities from India. Its one of our key BPO set-ups,” states Manish.

After taking over this company with a strength of 400 employees, Perot added over 2,000 to it. For Perot, acquisitions go beyond increasing revenues, the company has a core team of 30 members, which conducts extensive research into the financial and cultural background of an organisation before finalising a deal.

The company is growing 60 to 80 percent year-on-year in the BPS service. Among the verticals in which it operates, the healthcare domain happens to be the major revenue generator pumping in about a billion dollars annually to the company’s bottom line. After reporting revenues of $2 billion in 2005, Perot clocked $582.9 million for its third quarter this year achieving a 14 percent y-o-y increase.

Despite the company receiving most of its business from the US, Perot considers its operations in India as a cornerstone of its worldwide success. Though presently it does not have any Indian clients, this is set to change within the next six to seven months as the company is pitching to acquire customers in the country.

The company is targeting the banking and the financial space in India. Vardhman says, “The Indian healthcare and life insurance market has not matured yet. Thus it’s not ready to take on the kind of services that we deliver. However we are excited about the banking and the financial sector and will soon be capitalising on this market by acquiring clients in the vertical.”