Outsourcing to India Gets Hotter as Mahindra Satyam Eyes Acquisitions

As the world governments look to backlash outsourcing jobs to offshore companies outsourcing to India only grows in leaps and bounds. The traditional software outsourcing services provider plan to get hold of other companies and get themselves a bigger and better image on the worldwide market. This comes as a piece of surprising news as the board of Mahindra Satyam is believed to have given its back-office unit in-principle approval to build platform-based BPO capabilities through acquisitions.

The former Satyam Computer Services, which had had its ugly share of controversies, was on a verge of going down into archives last year. The acquisition plan would mark a considerable turnaround in the fortunes of the company and its overall IT outsourcing services. Clearly, Mahindra Satyam looks to cover the lost ground and time by overhauling its business development strategies in the next few years to come.

According to reliable sources the Mahindra Satyam BPO or Nipuna, as it was known earlier, may go up for up to three acquisitions in the $50-100 million range, if it gets the right fit. The CEO of Mahindra Satyam, Mr. Vijay Rangineni, reveals that they are going through a strategic platform-based practice. The company is open to both organic and inorganic routes to establish a platform BPO practice which could be used to deliver services to customers using the cloud. This coming straight from the horse's mouth says a lot more of what the software development company is planning for overhauling their business processing pertaining to outsourcing to India.

The new strategy strikes the business analysts as it would involve the vendor to provide both - the technology as well as the service to the client. The platform-based BPO differs from traditional business processing outsourcing as the latter makes the service provider use customers' existing technology platforms to deliver process outsourcing services. In other words, the platform BPO is the bundling of IT, BPO and consulting which means client companies incur minimal upfront investment. It also allows them to deal with their vendor on a 'pay-per-use' basis.

Analysts from consulting firms of well repute such as one Mr. Sudin Apte, Principal Analyst of Forrester, have expressed their views on the gradually evolving business processing outsourcing to India in their reports. Survival in this cut throat competition takes up a majority of the business development strategy and budget and hence the company is unable to press for investing in investing in next-gen IT services capabilities such as developing IP-based solutions, ramping up onshore and near-shore delivery centers, building platform-based managed services, and launching new SaaS or cloud-based offerings. When Mahindra Satyam was fighting its foreclosure due to the infamous accounting scam, its adversaries such as Infosys, Wipro, Cognizant, TCS, PCS, and HCL were busy investing in the aforementioned technologies and IT services to add to their business development capabilities.

After the disastrous last year during which Mahindra Satyam's BPO saw a business loss of around a staggering Rs. 4-5 crore every month, the company looks to get back to its bright profit making days by providing competitive services for outsourcing to India, and its profitability horizon looks much more encouraging.

Article By Sparsh-Technologies