Outsourcing: Gopinathan Padmanabhan, Executive VP and Head of Global Delivery, MPhasiS (Part 8)

Sramana Mitra: And the banking and financial services focus that you’re developing, is this going to be a global focus, or is it just North America?

Gopinathan Padmanabhan: It’s going to be global, absolutely global. In all regions, we are pushing for our presence in that particular space. We may not be the king of the world, but we are the king of the hill in the region we occupy.

SM: But that’s the only way you can compete in the market. You cannot be king of the world.

GP: Absolutely.

SM: It sounds like you’re actually acquiring companies within the financial services space that help you carve out that position as well.

GP: Absolutely. When we say that we’re going into hyper-specialization, all of our acquisitions are focused on this area. We’re looking only for acquisitions in the banking, capital markets and insurance spaces, all horizontal service capabilities that are available to these verticals. Today, for example, analytics is critical in insurance and banking. Our acquisitions are aligned with our hyper-specialization objective.

SM: Well, the product companies cost more to acquire, right?

GP: Yes. Product companies definitely cost more. It also costs us to manage and maintain the product version. But then we’re not only trying to sell the product; we’re also trying to offer the product on a platform on the cloud.

SM: In our world view, software as a service, all of these cloud services, whether it’s infrastructure as a service, software as a service and the various cloud services, all of those are considered products, not services. Even though they are services, the product management part of it is more product than services.

GP: Except that the customer does not perceive the issues associated with buying a product.

SM: I understand. Customers, especially IT buyers, think of it as opex as opposed to capex, and that’s been one of the great drivers of adoption inside of IT organizations. But what I’m saying is that from a product management point of view, as a company, if you acquire software-as-a-service companies or infrastructure-as-a-service companies, you have to treat them, from a product management operation point of view, as products, not services.

GP: I agree with you. From our perspective, it is definitely a product. But what we’re offering the customer is a service.

SM: Yes. That is a pretty serious cultural change for the IT services companies. It’s not been a change we have seen happen smoothly.

GP: Some serious Indian IT services companies have been dabbling in products and have been reasonably successful. All of us know about Infosys banking products and the DCS banking products and so on. There is plenty of expertise available. Many of these companies, including ours, have been working with our customers, helping them with their products. LWe used to help EDS; the management of their product in the insurance space was being done by our team. The teams do have experience in supporting customers in managing their products. It’s not that we’re entering into it without any background. We do have some level of exposure to this kind of work with our customers, and we’re trying to do it within our organization now.

SM: All right. Thank you, Gopi.

GP: Thank you.

This segment is part 8 in the series : Outsourcing: Gopinathan Padmanabhan, Executive VP and Head of Global Delivery, MPhasiS
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