Outsourcing: Gopinathan Padmanabhan, Executive VP and Head of Global Delivery, MPhasiS (Part 7)

Sramana Mitra: What you’re describing is probably the case with all of your competitors, with the entire industry. They train internally for the core, and then they go outside for the more specialized stuff.

Gopinathan Padmanabhan: That is correct.

SM: We’ve covered quite a lot of ground. Is there any other area you want to discuss?

GP: There is one area, our hyper-specialization journey. Initially, we declared our intention that we wanted to specialize in capital markets and insurance. Then we realized that even that is a broad area. Then we asked, what are we going to do in capital markets and insurance, and how are we going to become successful? Over a period of one to two years, we want to reach a stage where we are known as one of the best service providers in that space.

We realized that we needed to go down one more level and pick up specific areas in banking. Banking by itself is such a broad area that we thought we should go down one level. We also decided that we should adopt a differentiating strategy to become the best known in those areas. So, as part of our hyper-specialization, we pick specific sub-domains and build our own service offerings, our platforms on which we will offer service. I’ll give you a couple of examples.

In the insurance space, for example, we are building a platform that we call billing-as-a-service, a BaaS platform. We are billing it as a service on the cloud using our own product.

SM: Is that something that you’ve developed internally, or have you acquired a company to do that?

GP: We acquired a company called Wyde Corporation last year. It is well-known for its insurance products and building its own models in the market. What we are doing is taking the billing functionality of this product, which called Wynsure, and using that billing capability as a whole platform and building logic and code around it. We integrate it with the back-end systems of the company and also provide queries and reporting, security and all the other good stuff, and hosting it on the cloud. Customers pay per transaction rather than buying a package and then paying to maintain it and upgrade it, support it and so on.

We’ve already launched one platform, which is basically an accounts payable platform for an airline company in Australia. The company executives wanted an accounts payable procure-to-pay cycle. We told them we would handle the whole accounts payable for the airline, and we created our own platform. We wrote part of the code. We took some available products in the market, put them all together, integrated them, built a platform. All of the teams worked together on this. Our applications team created the platform. Our infrastructure team is managing the infrastructure and hosting it from the cloud. Our BPO team is doing the business process work of getting the invoices and processing them – scanning them, capturing them on the system, validating them and accepting them, rejecting them, or sending them out with queries. The full accounts payable processing is done by us, and the customer pays us so much per invoice. That’s a platform that we’ve already created. We’ve gone live, and we are delivering service today. We are trying to extend that platform and sell the same service to our other customers on a per transaction basis.

In hyper-specialization, we are picking up specific areas, building our own platforms or solutions and taking them to market. One of the biggest challenges in the IT industry in India today is the linear model.

SM: You’re getting more into the product side of the business as opposed to pure services and pure body-based scaling.

GP: That is correct. We are offering it on a platform, on the cloud and charging by the outcome, by the volume, by the number of transactions, number of documents and so on.

SM: The business model becomes more scalable.

GP: That is right.

SM: How much of your business is happening in this mode right now?

GP: It’s currently very small. We’re just beginning. We just rolled out the first platform. We got the first couple of customers. A few other platforms are currently being built. We plan to get the first customer roll-out by the end of 2012.

This segment is part 7 in the series : Outsourcing: Gopinathan Padmanabhan, Executive VP and Head of Global Delivery, MPhasiS
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