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CSC has taken the inorganic route to growth with a vengeance and this had a significant impact on its India operations. It acquired Covansys for $1.3 bn: this brought in six delivery centers worldwide, accelerated the growth of CSCs strategic offshore offerings in verticals like telecom, healthcare, life sciences and retail. The acquisition of First Consulting Group for $365 mn, on the other hand, enhanced CSCs healthcare offerings, further expanding its global delivery capabilities. While the jury is still out on whether this inorganic growth path could help CSC in these troubled times, Raj Vattikuti, group president, CSC India, spoke exclusively to Dataquest. Excerpts

What is the role of the development center that CSC runs for Mercator, the IT division of Emirates? Is this Dedicated Development Center (DDC) affected by the recent slowdown in the airline industry?
The Dedicated Development Center (DDC) in Bangalore was part of a previously announced contract signed between Mercator and Covansys, a company now merged with CSC India.

Working with CSC India, Mercators new DDC offers its travel and transportation industry clients scalable IT services that include product development, applications development and maintenance, testing services, technology consulting and project management across a range of technologies like Java, Oracle application, data warehousing, .NET, ERP and other niche technologies.

The DDC helps in energizing the Emirates Groups business expansion plans and strengthen Mercators existing development capabilities, and in positioning it as a leading IT solution supplier to the aviation industry. The inauguration of the center has been followed by almost four years of project association between the Emirates Group and Covansys. Emirates Group, and in particular Mercator, is a strategic account for CSC India and we want to provide the best services to be a part of their aggressive growth plans.

I do not see any impact on the DDC with the slowdown in the airlines industry.

Could you shed some light on CSC and the Bombardier tie-up? While currently the arrangement is restricted to IT infrastructure outsourcing, will it signal CSCs later foray into engineering services too?
We have renewed our IT outsourcing agreement with Bombardier Transportation, an operating group of Bombardier. in June this year. The new seven-year $1.2 bn contract is an extension and expansion of services that began under a 2002 contract in 2002 valued at $700 mn .

Under the new agreement, we will continue to provide Bombardier Transportation with a full range of infrastructure outsourcing services including desktop, service desk, network and application management services for more than 20,000 users at sites across 33 countries. In addition, CSC would also provide overall integration for service ticket tracking and reporting, that will enable end-to-end service management across Bombardiers IT environment.

Rajendra B Vattikuti, group president, CSC India

This renewed agreement with CSC ensures that Bombardier employees have quality IT services and support, 24 hours a day, 365 days a year, from anywhere in the world. Our global IT services expertise and legacy of experience in the manufacturing and transportation industries position us well to help Bombardier achieve its business goals.

CSC has pioneered relatively esoteric technologies like SOA and SaaS. Can you provide more details on the magnitude of the work done and the specific nature of the work?
SOA sure is CSCs proven end-to-end approach to creating a service-oriented architecture that enables the client enterprise to respond rapidly to market changes with new products and services. Consisting of a set of seven services that address the entire SOA lifecycle, SOAsure uses proven tools, processes, methodologies, and accelerators to assure cost-effective development, maintenance, and support.

SOAsure services are aligned with the needs of the clients unique business environment and provide end-to-end flexibility. The current customer engagements include a leading global financial investments management company and a global automotive giant where it is being used to build anywhere and ship anywhere capabilities for cost effectiveness and faster time to market. This is by modernizing and integrating disparate supply chain and procurement systems and processes.

SAP implementation now seems to be a lucrative area, with the battle for Axon just getting over. With CSC having long time SAP expertise, what is your take on this front, and future plans?
Our global SAP practice with over 3,900 dedicated SAP consultants across 23 countries, has successfully completed more than 1,500 SAP implementations worldwide.

CSCs proprietary tools and intellectual capital are applied to every engagement. On-site or off-site, near-shore or offshore, we will help you lower your implementation costs by leveraging a global network of resources. CSCs global practice dedicated to supporting SAP systems combines a wealth of skills and physical resourcesincluding world-class, full service outsourcing, consulting and systems integration teams. As one of the first global SAP Services Partners, we are also a hosting partner for a range of industries that include aerospace, defence, public sector,and chemical, oil and gas industries. This is a very strategic service offering for our clients and our goal is to grow it aggressively.

Is the Covansys integration now complete? Other than top line enhancement, what other benefits have been accrued?
We acquired Covansys in July 2007 and have achieved full integration of its operations into the companys model of delivering One CSC to customers and business. With the acquisitions, CSC nearly doubled its headcount in Indiasurpassing its annual headcount goaland is now home to the companys second-largest concentration of employees. CSC also achieved a 90% CAGR in terms of headcount in India during the last five years. The companys fully integrated World Sourcing center in India provides end-to-end India-led global delivery to its customers worldwide, has attained 100% revenue growth in fiscal 2008, and has increased its operations from four to seven locations in India.

For us, an aggressive offshore strategy became increasingly important for serving our clients with a global service delivery approach. The strategy was to not only add low-cost resources but also provide innovative value from its global network of service-delivery centers which could blend services such as consulting and process improvement with highly skilled application services and deep industry knowledge. Acquiring an established, highly respected services company with a major presence in India was the best way to meet customers needs and expectations.

CSCs global practice dedicated to supporting SAP systems combines a wealth of skills and physical resourcesincluding world-class, full service outsourcing, consulting and systems integration teams

With this acquisition, we have significantly advanced our Global Strategic Growth initiative by strengthening our capabilities and presence in India as well as creating an additional market channel for the industry, consulting and outsourcing solutions. This action reinforces our commitment to build a more robust offshore platform and will enable us to offer a broad range of capabilities to clients directly from India or through our existing businesses. This acquisition further intensifies CSCs strategic goals of increasing shareholder value and growing its business both organically and inorganically.

In light of the slowdown in the US market, especially, and the other markets, how does CSC plan to tweak around its Global Delivery Model?
CSCs Global Operating Model blends industry expertise with world-class delivery. Through the support of CSCs standardized management and delivery processes and other best-practice tools and methodologies, world sourcing brings the highest quality services and resources. As a global company, CSC can fulfill the business needs at the point of delivery or wherever CSC has the most cost-efficient capability to perform those services. With CSCs World Sourcing capability, the client can take advantage of our end-to-end Global Service Delivery approach. Our goal is to offer our clients these capabilities in every deal, to help them in transforming their business.

CSC has established technology centers of excellence or competency centers. SEI CMMI, an industry standard measurement tool, enables work at each of these centers. Using this standard ensures that no matter which world sourcing location the client chooses, the work will be performed with the same outstanding standards.

CSC has encouraged gender diversity in its workforce. Can you elaborate on this as a business strategy?
Diversity programs have multiple dimensions in a global organization like CSC. In the Indian context, gender diversity is an important factor that needs to be addressed. Given the Indian socio-cultural context, CSC Indias Diversity Programs focus is on gender diversity. At a global level a diversity council has been formed which is responsible for giving directions to this initiative. As we talk of India, a similar Diversity Council which focuses on gender diversity has been set up comprising the senior management group, which is responsible for giving direction and setting the focus right for the CSC India gender diversity initiative. One such gender diversity initiative launched in CSC in India last year with an objective that we call SEED. It stands for Sensitization (creating sensitivity to differences and raising awareness of ones own prejudices that unwittingly surface in business decisions), Engagement (to enlist the support of everyone even if they do not benefit directly from the initiatives), Empowerment (help women explore and develop their personal understanding of what it means to be a woman and what it takes to succeed in our society today) and Development (to develop effective leadership, this goes beyond vision, strategy, communication, and charisma).

CSC was supposed to double its headcount in 2008. With the slowdown affecting offshore business, there is a cap on fresh hiring by most companies. What is CSCs take?
We have indeed doubled our headcount in India surpassing our annual headcount goal. India is now home to the companys second-largest concentration of employees. CSC also achieved a 90% CAGR in terms of headcount in India during the last five years. Our business model is pretty stable and a major portion of revenue comes from long term outsourcing contracts. CSC is on track with its strategic plans and we are pleased with our progress in India and other parts of the globe.

Stuti Das
stutid@cybermedia.co.in

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