"IT outsourcing and BPO will converge"

PUNE: Chairman, CEO and co-founder of Syntel Bharat Desai is ready to don another avatar- that of a mentor and brand ambassador for his company worldwide.

Under Desai's direction, Syntel has grown over the past 24 years to become a global information technology services company employing 4,000 people in offices across North America, Europe, and Asia, as well as seven fully-networked global development centers in the US and India. Desai has big plans for India and is keen on making Pune the biggest center for Syntel worldwide. He spoke to Nanda Kasabe of CyberMedia News about the company plans.

There have been plenty of changes within Syntel. What is the rationale behind this?



There are three key changes happening at Syntel. The first is building infrastructure and overhauling the telecommunications infrastructure worldwide. The second key change is the change in the leadership structure and the third is identifying new business areas for growth.


The idea is to be prepared for the customer demand coming up in the areas of healthcare, financial services and building services around these.

Could you elaborate on these key changes?



Syntel has acquired 40 acres at Pune to build a sprawling campus at Talawade, which will be the flagship facility for Syntel worldwide. Another 23 acres has been acquired at Chennai.


We have estimated a total of 9,000 seats in three phases, which would cost around $ 40 million. The first phase with 3,000 seats will become operational by August 2005.The $ 20 million to be invested in this facility has come from the Indian subsidiary of Syntel. The Chennai facility is coming up at the IT Corridor near SIPCOT soon.
In anticipation of huge customer demand we have decided to overhaul our entire telecommunications infrastructure. Nortel Networks has been identified as the equipment vendor this.



Secondly, Keshav Murugesh has been promoted last month as the COO. My role would also be to identify new areas for growth.


We also intend to come out with major announcements once every quarter bringing our productized services to the market. The new service offerings would be extensions of the current product line.

You have predicted a convergence between IT outsourcing and BPO. Do you see a change in focus of the existing BPOs?



I see a convergence happening between IT outsourcing and BPO. Customers will soon look for one-stop shops for their IT outsourcing needs and the BPO needs. Syntel will now push this model and take steps towards becoming a one-stop for meeting both the needs.


Typically, IT applications for a BPO are given to another vendor and this is where inefficiencies creep in. Instead, one vendor could be held responsible for the end-to-end function.


Syntel has opened a 400 seater BPO at Mumabi, which offers data services related to high-end transaction services in two to three verticals - healthcare, insurance and finance. Presently, BPO is a small component of the overall revenue model, but we see this changing with the convergence happening. During the current year, we will invest $15 million in India.

You have won the IIT Alumnus of the Year award for 2004. Do you have plans of involving yourself with your alma mater, providing the necessary thought leadership?



Of course. IIT will be celebrating its golden jubilee in two years. IIT, Mumbai has launched an alumni association and as Pune has over 500 IIT alumni, we have therefore launched the Pune chapter of the alumnus.


The aim is to formulate plans for IIT for the next two decades, identify future areas of research, future technologies and funds for these. We see both biotech and bioengineering emerging as hot areas of technology.


The Pune chapter of IITians will examine all possible ways of raising capital. So far, funds came from the government. However, there is a strong need to bridge the operating cash flow gap. There is also a need to take IIT global and invite foreign students to study here. It is unfortunate that India lacks educational institutes of this stature. We hope to correct this.

CyberMedia News