Eventful. That’s how most people in the information technology industry would describe the last 24 months. From the heady highs of the IT boom to grappling with the alarming dip in revenues to slow but sure signs of recovery… having been there and done all of this and more, change has been the only constant in the lives of IT companies and their people during this tumultuous period.

It has been the same with Birlasoft Inc, the software development and consulting arm of the $1.5-billion CK Birla Group and General Electric (which holds approximately 20% stake).

"It’s been a phenomenal journey," reflects its US based CEO Atanu Banerji.

"Every six months in the last six quarters has seen us evolve into a different company and culture. Just four years ago, we couldn’t compete with the likes of Sapient, Infosys and Wipro. Today, we are in a position to stand up against them."

Given its relatively small base, Birlasoft has traditionally been a company on the high growth path. And like most Indian software services companies, it has always been highly dependent on the US market (even today, 60% revenue comes from the US). In fact, over the years, Birlasoft has structurally been seen as US-based, with the thought leadership based out there, close to the customers. Recent moves have focused on a strategic shift to anchor operations out of India. As work moved from the onsite to the offshore model, the structure now looks like this—700 people in India, 450 in the US, 190 in Australia and 60 in the UK. A new development center in Chennai with a capacity of 500 is expected to be operational by June’ 2003.

Start-up year: 1995 Employees: 1400 Headquarters: Noida Branches: Chennai, Mumbai, Bangalore, USA, Australia, Singapore, Middle East Verticals: BFSI, software product companies, manufacturing, healthcare, energy. Clients: GE, Caterpillar, Morgan Stanley, Best Software, Bank of Tokyo Mitsubishi, Digex (an MCI company)

Quick reactions to the slowdown and the subsequent drop in revenue saw the company adopting a de-risking strategy to reduce dependence on the US market. The business model changed and the services grew in dollar value. Chief financial officer (CFO) R Chandrasekharan (better known as RC within Birlasoft) held a tight leash on the company kitty questioning every resource.

"A significant portion of the company’s resources were based in the US earlier. In the year 2000, we started moving all non-customer facing operations like the creation of proposals, pre-sales and communication to India," points out RC.

The year 2002 also saw management reorganization with a number of senior resources added to the management team particularly in India to help build offshore capability and bandwidth. In this period Birlasoft also added more service offerings including Peoplesoft, WebMethods and data warehousing besides the existing WebServices, Siebel, quality assurance and maintenance.

The focus on ramping up its offshore presence saw significant investments in the infrastructure in terms of facilities, hardware, software and resources.

As a roadmap for the future, Birlasoft plans to continue to consolidate its positioning as an offshore company. As for the three-year plan, the aim is to be among the top three service providers in three verticals, three horizontals and three geographies. The vertical focus currently is on BFSI (banking and finance services and insurance), SPC (software product companies) and manufacturing. Healthcare and energy are the other two focus areas.

Given the vast US and UK markets and the density of software service companies operating there, the "Top Three" aim cannot apply to these geographies. One of those geographies then, is Australia. Birlasoft already has 190 people in Australia.

Plans for the other two geographies have not been outlined yet and the company’s current focus remains on the US, Europe and APAC (Asia-Pacific region including Australia). And 60% of revenue still comes from the US.

The three horizontals are quality assurance services, EAI and pre-sales investment and technology domain building. "The past few months have seen significant investments in our PeopleSoft competency and have built critical mass. We have also built competencies in Vision Plus and Quality Assurance services," informs chief operating officer (COO) Kamal Mansharamani, who spearheads operations in India.

Changing horizons
Executive vice president Avinash Singh and one of the longest serving employees, takes us back to the company’s nascent beginnings hatched out of chairman C K Birla’s corporate office way back in 1992. The group’s foray into information technology began with a joint venture called Birla Horizons International.

"To put it bluntly, we were a body shopper for Computer Horizons with plans to eventually get business from Fortune 500 companies. This never happened," recalls Singh. Initially, Birla Horizons International concentrated on professional services with offices in New Delhi, New Jersey and California. Birla Horizons International was christened Birlasoft after acquiring the equity stake of its joint venture partner Computer Horizons Corporation Inc of New Jersey, US. In the late 90s, GE picked up an approximately 20% stake in the company. Birlasoft had been one of GE’s preferred vendors.

The GE story
Industry sources say that close to 60% of Birlasoft’s business comes from GE. Birlasoft’s operations in the early days were focused on providing professional services and its predominant onsite model did not translate into high margins. The GE Equity investment set the stage for a rapid climb up the value chain. Birlasoft’s GE-dedicated development center began operations in April 2001.

While acknowledging that recognition from GE did boost Birlasoft’s credentials especially within the customer pool, CEO Atanu Banerjee emphasizes that the company has twice the number of people working on non-GE accounts as compared to the GE-dedicated workforce. "No doubt, our largest customer today is GE and the business from GE is growing. However, we do have a de-risking strategy that involves reducing dependence on GE," points out Banerjee. Key benefits of the GE deal include scaling up of offshore facility, adoption of best practices and the six sigma as per GE standards and of course, the best references from GE.

"Once we meet GE’s expectation, we are unique for the non-GE world. The GE ratification elevates us to a level where no more questions are asked," says COO Kamal Mansharamani cautioning that GE itself is a tough task master.

"SLA’s (service level agreements) are clearly defined and there is strict tab on bug fixes and measuring variations on deliverables. And once you meet their standards, they keep raising the bar, ensuring that you move ahead," he explains.

The people factor
The company recruits not only from India but Pakistan, USA, Singapore and Australia as well. About 10% of its US staff and 80% of Australia staff comprises local recruits. The company has been following the practice of reaching out to employees across the globe at least once a quarter. "The HR department calls each employee to inquire about his or her well being.

These calls used to be made from the US, now they are made from India," informs A Prabhakar Rao, vice president, human resources. Rao points out that managing the expectations of employees in diverse geographies and cultures is a challenge, best tackled by continuous communication.

Like so many other IT service companies, Birlasoft too has dipped its fingers in BPO (business process outsourcing), albeit for creating a helpdesk for some of its own customers. From a small InfoTech arm of a largely non-IT group to a global services company, from dizzying growth to a drop in revenue and furious expansion, it certainly has been an eventful journey for Birlasoft. So, what’s next? An IPO (initial public offering)?

"Eventually," says Team Birlasoft. And the precondition they have laid for themselves is that they show six straight quarters of solid results before the market appears ready for them to take the plunge. After the roller coaster ride that the industry has just been through, that’s challenge all right.

Their time starts now.

Manjiri Kalghatgi