New Delhi: One of the the top software service vendors in the world, Computer Sciences Corp. (CSC) plans to double its Indian workforce to 32,000 in the next three years, as this country becomes the nucleus of the offshoring growth strategy for the company and gets set to take on work in new businesses that it plans to enter.
Looking ahead: A file photograph of Joe Doherty, division president, global outsourcing services organization, the Americas, for CSC. Doherty says the slowdown in the US has only meant more business for the firm. Photo: Ramesh Pathan / Mint)
The Virginia, US-based firm, which began operations in India as early as 1991, provides software application development, computer infrastructure management, tech consulting, Web hosting and system integration services to global customers in banking and financial services, manufacturing and health care, as well as to government clients.
This year, CSC is entering three new businesses—chemical engineering, natural resources and consumer services—that will become operational by March next year. Globally, CSC employs around 91,000 people, more than one-sixth of who are employed in India currently.
“India is an integral part of our offshoring strategy. It has the largest resource base for CSC outside the US and we are set to double that in the next three years. As we enter into these three new businesses, a majority of the work for these three verticals will be serviced from India,” said Joe Doherty, division president, global outsourcing services organization, the Americas, for CSC.
In India, CSC has a presence in Chennai, Hyderabad, the New Delhi suburb of Noida, Bangalore, Mumbai, Vadodara and Indore.
The slowdown in the US economy has only resulted in more business for the firm, which in turn means more offshoring opportunities to locations such as India. “Prospective customers, who have never looked at outsourcing before because they never needed it, are now looking at a larger India-centric offering, as are existing customers who have pain areas. Cost is always a priority. In the last two-three quarters, I have seen a 15-20% increase in interest from existing and new customers to offshore their work to locations like India,” Doherty said.
CSC currently has a pipeline of more than 50 customers in the Americas who are looking at offshoring more intensely. Doherty said he has also noticed an increase in the number of mid-sized outsourcing deals (between $50 million and $350 million, or about Rs200 crore and Rs1,400 crore) as against the large, multi-year deals of more than $350 million.
Technology Partners International Inc., or TPI, a Houston, Texas-based firm that tracks outsourcing deals, had said last month that in the first three months of 2008, customers such as ABN Amro NV and Citibank NA had broadened the scope of their outsourcing relationships, asking tech services firms to handle processes that had until then been managed internally.
“If the US recession continues, which looks like it will, the expectations for Indian tech firms is that a lot more additional work will be coming their way in the medium to long term, which is the next two-three quarters,” Siddharth Pai, the Bangalore-based partner and managing director of TPI Advisory Services India Pvt. Ltd, told Mint last month.
Early this year, CSC completed its acquisition of First Consulting Group, which provides outsourcing, consulting and systems integration for health care, pharmaceutical and life sciences firms, for $365 million. This was to increase CSC’s health care expertise and offshore service delivery capabilities. As a result of this acquisition, around 1,200 jobs were moved to India and Vietnam.
“Our acquisition strategy going forward will be based on the verticals we are integrating. We will look at acquisition opportunities around the three new verticals that we are adding,” Doherty said.
The firm, which reported revenue of $16.1 billion for its last fiscal year ended 28 December, does not have a customer base in India but is “not closed to looking at the domestic market as and when the need arises,” Doherty said.