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"The vision is to become a major integrated IT and BPO player in the global context..." - Views on News from Equitymaster

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  • Aug 12, 2004 - "The vision is to become a major integrated IT and BPO player in the global context..."

"The vision is to become a major integrated IT and BPO player in the global context..."

Aug 12, 2004

Mr. Ravi Ramu is the Chief Financial Officer (CFO) at MphasiS-BFL. He is also a member of the Institute of Chartered Accountants in England and Wales. Mr. Ramu was previously the Senior Partner and Head of the Information, Communication and Entertainment practice at KPMG India and was involved extensively with US GAAP assignments as well as with US Initial Public Offering of shares of leading technology companies. He has also worked in KPMG Holland and in the KPMG International Office in Amsterdam in addition to having had a stint in Financial Control & Planning with the Emirates Bank Group in Dubai, UAE. In an interview with us, Mr. Ramu gave us his perspective on the progress of the Indian software industry in general and MphasiS in particular.

Eqtm: Some of the global technology giants have outlined bleak scenarios for the not-to-distant future. In that case, is the rapid growth of the Indian software industry sustainable?

Mr. Ramu : You know the Indian scenario, and you have seen the results from Indian software companies. So, you can draw your conclusions from that. Nobody in India is saying it is bleak. I think we will continue to grow. Well, sustainable is a dangerous word. But the Indian IT industry is here and it will grow from strength to strength.

Eqtm: In relation to the previous question, what are the signs that MphasiS is seeing as of today with regards to the growth in global technology spending?

Mr. Ramu : I think we are seeing good signs with our integrated BPO and IT model. The signs have indeed been encouraging. You have seen that we have a different business model, we have an approach that is integrated and I think there is a fair amount of traction going on there, and we expect to grow.

Eqtm: What will drive growth for the company in the future? How much do you see MphasiS contributing to that growth, considering that your software services segment has witnessed sedate growth in the past few years?

Mr. Ramu : We see both businesses (IT services and BPO) growing fairly well in the future. We have more than survived the slowdown whereas people who are above us or at our level have slipped quite desperately. So I think that in comparison terms with our peers, we have done very well and are looking at the next tier of companies.

Eqtm: Have we moved ahead from the cost arbitrage advantage to providing clients with business solutions and not merely a software solution to IT requirements?

Mr. Ramu : All along, we have been systems integrators also. In our IT business, we do e-business, web based technologies and a fair amount of architecture work connected with those kinds of areas. Therefore, we have not had a pure ODC (offshore development centre) Indian cost advantage model for our IT services business. So, I think that we already have a head start in comparison to our Indian competitors. And I think that we will like to grow on that head start. And also the Indian back end that is also a very important cost factor model component.

Eqtm: And what about the competition that Indian software companies are facing from some other cost competitive countries, like China and the ASEAN region?

Mr. Ramu : We do not see any major competition. China is not cheaper than India. It is not necessarily a cost-competitiveness factor that Indian software companies are establishing bases in these countries. Rather it is part of the first step to grow into a global business model. It is globalisation that is driving such things. Otherwise, China IT is more expensive than Indian IT. The salary levels are higher than in India.

Eqtm: What synergies do BPO services bring in to the MphasiS-BFL Group in its long-term objective of becoming a leading software services player globally?

Mr. Ramu : I think the synergy between the two is extremely acute and important. This is because you are now looking at processes also coming into the whole IT bandwagon. Right now, India has been largely known for its IT maintenance and testing type of work. And I think, as we have to go up, expand and increase the value of our IT services, we are looking at taking over processes. This means IT and BPO coming together at the same time. So, the synergies and the cost efficiencies, the operational efficiencies are quite considerable if both can come together and form a combined business model. There are tremendous operational efficiencies involved there. Almost everything in a process also has an IT component to it. So, if you can dovetail those two, then you have got a very solid service offering.

Eqtm: What lessons have been learnt from the difficult times in the last three years?

Mr. Ramu : I think that as an industry that requires managements and service models to be complete on the call, we need to move in step with the fast pace changes in the industry. That is something that we have learnt, and that is something that we have done. And therefore, we are still around at this level saying you the stories. It is very important as you got to keep pace with the emerging requirements and solutions, processes and technologies.

Eqtm: Could you share with us your vision for MphasiS and MsourcE? What are the key challenges the Group faces on its way to achieving its vision?

Mr. Ramu : The vision is to become a major integrated IT and BPO player in the global context on the back of superb quality systems and quality services. The major challenges I think are, of course, to find the right people, to clearly service the increasing levels of business, our wide range of clients that we have and to provide an excellent career path to each one of our employees so that we grow into several thousands in strength.

Eqtm: Who are the personalities that have influenced you the most?

Mr. Ramu : No one. I think I choose the right and wrong from various situations and people. But I do not think anyone has influenced me.

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