MphasiS Ranked No. 4
Business Today, June 2008
Two years after it was acquired by technology servIces giant EDS, MphasiS, the Bangalore-based IT services company is back in the spotlight. This time because its one-time parent has itself been acquired by HP in a $13.9-billion deal in mid-May this year. So, if Jeya Kumar, MphasiS’ recently appointed CEO, had his hands full managing the previous integration, his job has got even more complicated with the latest merger. MphasiS has been on a fast growth track, growing its top line by 38 per cent and earnings by 42 per cent in the last fiscal and adding over 10,000 people in the process.

Despite these seemingly impressive numbers (and a place on this listing), Kumar, who ran Sun Microsystems’ global services operations earlier, knows that there is scope for improvement. “We want to focus on our operational cadence; specific areas such as margins need to improve,” he admits. For a company with over 28,000 people, MphasiS has very low operating margins (just 9.9 per cent for the last quarter of the previous fiscal, down from 13.3 per cent in the corresponding period the year before) and Kumar will have his task cut out improving this metric. His plan: focus on streamlining suppliers from over 3,000 at one time to just 1,000 now and eventually just to 300; then, to rationalise his global presence from over 30 locations to 20, but simultaneously open new ones in low-cost locations such as the Philippines. Before he can do that his bosses in Plano, Texas (EDS) and Palo Alto, California (HP) will have to figure out how to fit this fastgrowing business into their global game plan.

- Rahul Sachitanand