MphasiS-BFL Reorganization

Mumbai, April 3, 2000: MphasiS-BFL today announced a major reorganisation that uniquely positions the Company as an "Interactive Architect with Quality Capacity" for end-to-end e-Business solutions, by leveraging the unique strengths of MphasiS' Interactive Architect capabilities, and BFL's high quality back-end capabilities.

BFL, which is publicly listed on stock exchanges in India, has decided to change its name to MphasiS-BFL, which will be the name of the combined entity.

The regulatory formalities involved in the "merger" of BFL and MphasiS are expected to be completed in this quarter. The financial consolidation is also expected then. "However for all practical purposes, we have commenced operations as one integrated entity," said Chairman designate Jaithirth (Jerry) Rao.

"MphasiS-BFL is positioned as an end-to-end solutions provider for e-Businesses. Our work commences with Business Planning and goes all the way through Business Architecture, Technology Architecture, Systems Design, Systems Development, Deployment and Maintenance. We are experts in ensuring that there is superb plumbing behind a website with access to multiple systems (both legacy and new) in sub-seconds. Internet/CRM technologies enable us to transform our clients' marketing and service capabilities. The same Internet/CRM technologies create a unique opportunity for established businesses to ensure a common customer experience across multiple channels, not just the web. Call Centers, Agents, Mobile Telephony, Wireless, Kiosks and Physical Branches can all be woven into a seamless continuum. This is what MphasiS-BFL is specially equipped to help its customers with.

"The solid reputation of MphasiS as Interactive Architects, combined with the solid reputation of BFL as a very high Quality Offshore Developer, is really synergistic and unique. We do not believe that there is any company which spans the entire spectrum of the value chain, and which at the same time has such high quality development capacity through our Indian offshore arm. We are therefore in a category by ourselves", said Mr. Rao.

As part of the wide-ranging reorganization, Mr. Rao announced the appointment of three presidents reporting to Rao:
- R. Mohan who was Managing Director of BFL, has been appointed President of the Development Division of MphasiS-BFL. All the seven offshore development centers (located in Bangalore, Pune and Mumbai) as well as the related on-site development staff will report to Mohan. Mohan will be located at Bangalore in India's Silicon Plateau.
- Jeroen Tas who was CEO of MphasiS, has been appointed President MphasiS-BFL -- North America. This remains the biggest and most critical market for the Company. In addition to his geographic role, Jeroen has been assigned the responsibility to develop, mentor and nurture a community of e-architects who will constitute the core strategic fulcrum around which MphasiS-BFL will build its e-solutions business. Tas will be located in Santa Monica, California.
- Arthur Flew who was President of MphasiS has been appointed President of MphasiS-BFL International. Flew's geographic responsibilities will include Europe, Asia-Pacific and Latin America. In addition to his geographic role, Flew will have the responsibility to ensure that MphasiS-BFL maintains its position as a high quality supplier of solutions that integrate traditional legacy environments with the web-world. Flew will be spending a considerable amount of his time over the next few months living and working out of Bangalore.

Simultaneous with the reorganization, the company has decided to "spin off" into a separate subsidiary a portion of the Products Division of BFL. The subsidiary will be headquartered in Sunnyvale, California and will focus on a suite of products for net-based shopping malls. Heading this spun-off subsidiary as its President and CEO will be Sridharan Kothandaraman ("Sri") who was CEO of BFL. Sri said, "I am very excited about this opportunity. Product companies need very small, cohesive, dedicated teams with a lot of passion. I believe we have the right ingredients in place".

Explaining the rationale behind the "spin off", Rao highlighted the importance of separating the confusion that arises when a Product company resides inside a Solutions company. "This enables the Product effort to stand on its own and get the attention it deserves. While we will share in the upsides of the company, it is our intention over time, to find other investors and deconsolidate the subsidiary. This is the first time that a Silicon Valley based product company is coupled with a Bangalore-based development unit from inception. Sri is starting out on a new and exciting path. We are sure that he will make us proud. We wish him all the best", said Rao.

The Product company will give options/ownership to its employees to incentivize them. It is expected that approximately twenty people will transfer to this subsidiary. The other members of the BFL product group will become part of MphasiS-BFL's growing E-Solutions Business unit.

The verticals that MphasiS-BFL seeks to focus on are:
- The Financial Industry (Banking, Brokerage, Insurance)
- The Retail Industry
- Media and Telecommunications
- Technology Companies
- Logistics and Supply Chain management

Discussing other details of the reorganization following the merger, Rao added "We are consolidating the finance function under BFL CFO K. Venkatesh. The HR function of MphasiS-BFL worldwide will report in to Dr Sreenivas Chakravarthy who heads BFL's HR group. We have created a new position of Marketing Director for the company. Aditi Malik, who is EVP India Business for MphasiS, will take this position".

Summing up the positioning of the company, Rao said that "we want to distinguish ourselves from other Interactive Architects who are bound to have capacity problems as they try to scale up their business. We also want to be sure that we can have as part of our target market, both Dot.com companies and established firms. The latter need development and deployment support across a range of systems as they complete their own transformations. MphasiS-BFL is not constrained either in its resource bandwidth or in its range of competencies. We are also excited about the globality of our efforts. Its only partly accidental that we have three Presidents of three different nationalities (American, Indian and Dutch). Our customer base is more global than other Interactive Architects. Our investor base is global. Our managerial talent is global. We like to think of ourselves as special on this count. The top twenty five managers of MphasiS-BFL held an offsite meeting recently. We came up with a strategic vision and an operating plan both of which leave us excited and energized. We are pretty confident that we will pull off something unique and valuable to all our stakeholders", Rao said.

 
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