Technically, the EDS-MphasiS merger was completed only in July this year, but the two companies have been working together since the last one year. The EDS link helped MphasiS BPO far more than it helped the IT business.

MphasiS was one of the first few IT services companies to get into BPO, under the name MsourcE. The name change happened sometime back to leverage the MphasiS brand and show it as an integrated business. But, in reality, (unlike say, Infosys BPO) not much changed on the ground, as MphasiS BPO continued to draw close to three-fourth of its revenues from customer interaction services. That changed significantly last year, with EDS actively helping the transformation.

MphasiS BPO gained significant revenue (23%) from EDS, both directly offshored as well as through joint marketing. It also got significant shared services work from EDS as a client, which reduced its over-dependence on customer interaction services. In fact, the contribution came down from close to three-fourth in Q1 to less than three-fifth in Q4 FY 07. That helped take up its average realization by more than 10% and increase profitability. Its domestic business margins improved too. The plan is to change the service-mix to 50:50 for customer interaction services and others.

However, it has still not started on the solutions path yet, which all IT services firms have been pursuing seriously.

For MphasiS BPO, stability at the top remains elusive. After the exit of Milind Chalisgaonkar, Bhaskar Menon headed the BPO operations but left just before the EDS takeover, and was replaced by Sandeep Dhar. If market rumors are to be believed, Dhar is also on his way out to head the India delivery of a US-based IT services/interactive services firm.

At the end of the year, MphasiS BPO had about sixty active clients with seventeen of them contributing more than $1 mn. DQ

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