company has not looked back since and is poised to become one of
the most successful merger exercises in the recent times. Pankaj
Mishra traces the company’s history and looks at the road ahead
for MphasiS BFL.
flying back to New York from Los Angeles when the idea of forging
a company emerged. Having worked with Citicorp for a long time,
I decided to approach them for funding. But the deal failed to materialise
as we couldn’t agree on several issues,” says Rao. Looking back,
he thinks that it was actually a blessing in disguise. “Had we received
funding from Citicorp, we couldn’t have focussed on external clients.”
ING was a common investor in both MphasiS and BFL. Naturally, it
played a key role in the merger. Well before that, Rao was busy
building a global team for MphasiS. Rao formerly headed Citibank’s
Global Technology Development and their Global Electronic Cards
divisions. “I started looking out for people with strong domain
expertise and this is where my Citibank contacts came in handy.”
Rao was talking to Jeron Tas on his flight back
to New York, when both of them conceptualised a global company.
Tas, an ex-Citibanker is now the president of MphasiS BFL. Five
senior executives at MphasiS are not of Indian origin, which is
why Rao prefers it to be looked upon as a global company. “Being
a truly global player has been a key driver of our working model,”
says Tas. Now the company has several blue chips as part of its
when we were looking to recruit professionals with good technical
skills, Mohan Krishnan (now CTO of MphasiS BFL) came to me with
a clear strategy. He had a team of 40 professionals with him,” recalls
Bhaskar Menon, executive vice president, Global
Business Development, joined the company to assist Rao during the
merger. Today, Menon looks after MphasiS’ global marketing and is
always globe-trotting. “We underestimated the complexities involved
in the merger. It took us 15 months to come together as a team.
BFL was strong in legacy applications, while MphasiS was focussing
on the high-end consulting in the finance vertical,” says Menon.
Integrating the two entities was a very complex task and it involved
issues related to culture, attitude and geographic distances.
Menon is aware that taking on the Wipros of the world is not a realistic
approach. Therefore he is trying to position MphasiS BFL as a domain
specialist with expertise in finance and logistics segment. In the
focussing on three areas system integration, application lifecycle
management and Business Process Outsourcing (BPO). Of these, we
understand the system integration business very well. On the application
management side, we have to face stiff competition from the TCS’
of the world,” Menon says. His strategy is to start with a pilot
project for a large client and gradually become an end-to-end solution
provider by offering services like BPO.
the period April to December 2001, system integration, application
management and BPO accounted for 35, 55 and 20 percent of revenues
respectively. Menon and his team are optimistic about the BPO business
and expect it to grow at more than 200 percent this year. Pricing
pressure exists, but Menon denies any negative impact on billing
rates, which hover around $60 for onsite and $20 for offshore projects.
“2001-02 is going to be tough because of the global slowdown,” says
Menon. “In these testing times, branding becomes extremely important.
With our blue-chip clientele we can access good accounts. Further,
our thrust on business intelligence rather than pure technical expertise
is an added advantage.”
also witnessed an increase in its offshore projects from 29 percent
last year to 37.2 percent in December 2001.
Services: The new growth engine
Mohan Krishnan, chief technology officer, MphasiS
BFL, is one of the co-founders of the company. Web Services, according
to him, are going to be the most happening thing in coming times.
“Though a lot of hype is being created around Web services, they
have to be understood in terms of business proposition. I believe
that large traditional banks who are now scrambling to take on the
‘new economy’ banks will be looking at Web services as a competitive
edge,” says Krishnan. There are four clients at present for Web
services but Krishnan declines to name them. According to a recent
Gartner survey, .Net based solutions will account for fifty percent
of business from overall migration to the Web by enterprises.
are three competing architectures in Web services SunONE, .Net and
BEA. We have been tracking developments in this segment for a long
time and I feel that platform or architecture is not an issue with
most clients. However, the J2EE platform is preferred in the Banking
and Financial Services Industry (BFSI),” explains Krishnan. Krishnan
is also responsible for maintaining a close relationship with leading
vendors such as BEA, Microsoft and Sun Microsystems. He adds that
MphasiS started working on BEA portal servers even before they were
launched during 2001.
a systems integrator, MphasiS sees CRM as another lucrative segment.
“With Siebel trying to push its customers to thin-client-based architectures,
we see a huge potential in this space,” says Krishnan.
to position MphasiS BFL somewhere between the big five in India
and the same in the US. We are already ranked 9th in the Indian
software industry in terms of market capitalisation. Once the slowdown
bottoms out, our software services business will grow,” says Rao.
He is not very keen on taking the product route at present, but
according to him, if a brilliant idea comes up there will be no
looking back. “We are in the process of evaluating two product ideas,”
back, MphasiS-BFL announced that it wants to become a Rs 1,000 crore
company in the next few years. As Rao is not very aggressive about
going for overseas acquisitions, MphasiS’s BPO business will have
to play an instrumental role in achieving that goal.