FOR Mr Jerry Rao, chairman MphasiS-BFL Ltd and
winner of the coveted Ernst & Young Entrepreneur of the Year Award
2001 in the ICE category, its been a journey worth every bit of
the effort. Moreover, according to the recent Forrester Research
report on offshore services providers, MphasiS has been listed as
one of the emerging pivotal providers of offshore services and integration
capabilities. MphasiS's new working models/methodologies—especially
the ‘virtual operations' model and its concept of bi-polarity—are
expected to strengthen operations significantly. Incidentally, the
company has also taken a decision to move out of the products space
and become a complete solutions and services focused player. In
an interview with Kavitha Vivek, Mr Rao outlines his plans
for the company. Excerpts:
is the gameplan to face up to the challenges of the ongoing market
recession. Could you outline some of the strategies?
The key to survival clearly is to re-align business in a manner
that binds the fundamentals together. MphasiS is therefore looking
at two levels—strategic and domain. On a strategic level we want
to be a key player in the software solutions and services space.
We have therefore taken the decision to axe our products business
The thrust is on being a best of breed solutions integrator. As
for the domain we will play mainly in the applications space (solutions
for logistics and financial services) and in the systems business
in a small way. Though the systems business accounts only for 10
per cent of our overall revenues, we consider this a strategic business.
So we will hold onto it. MphasiS BPO, the call centre and business
process outsourcing subsidiary is also another thrust business that
has seen significant growth. We plan to grow this business within
the same domain areas of logistics, finance and retail.
you elaborate on your moving out of the products space?
We took the decision to move out of the products space because there
is a conflict of interest when it comes to choosing between your
product and another. When we say we are the best of breed integrators,
we need to truly be just that. MphasiS had a few of its own products,
mainly a healthcare product and a ‘Net Mall' product. We shut down
‘Net Mall' last year and the Europe-focused healthcare product business
this quarter. This led to the restructuring of our European operations.
However, let me mention that we will continue to be a player in
the healthcare services space in Europe and Asia which are both
growing markets for us.
you comment on some of the operating models that you have in place?
Total globality has been one key driver that helped MphasiS chalk
out its working model. The management team brings together top talent
drawn from different nationalities including Dutch, Singaporean,
Taiwanese, Swiss, British, Americans and of course Indians. So literally
the company can draw from the global experience these people bring
with them. We have also put in place a ‘virtual' model for our development
methodology. So this is not the traditional offshore-onsite model.
In this scenario both the hardware and software reside at the clients
side, while the work progresses remotely from anywhere in India
or US. So this model often results in better customer satisfaction
and better revenue margins for the company. Another key model is
the concept of ‘Bi-Polarity', whereby both the US and Indian operations
are key centres. So the question of one being the headquarters and
the other a mere operations centre does not arise.
has been the impact of the dotcom bust on the company, especially
since you were doing a number of projects in e-business and e-commerce
The exposure to B2C work has certainly come down. However B2B enablement
for legacy organisations continues to be a good business to be in.
Interestingly, we avoided following the ‘Impact Pricing' model wherein
stock is offered for the project in place of cash while working
with start-ups. We insisted on cash for all projects, which was
a good thing.