Corporate sector goes outsourcing: Infogain

BANGALORE, INDIA: The extreme panic over the R-word is slowly coming down. The Indian market is striving hard to make a comeback despite the cloudy situation. Once bitten, twice shy, the corporate India is extremely cautious, though there are some signs of  recovery in the economic front. 

Talking on similar lines, Eddie Chandhok, president, global delivery organization, Infogain Corporation, a provider of CRM, ERP, integration, business intelligence solutions and services, says: “Indian market is already showing signs of recovery and starting from June-July quarter, investments will be back on track and some of the effects of the slowdown will be left behind.” He was speaking to Deepa Damodaran of CIOL, in an exclusive interview. Excerpts:

CIOL: Retail is an important segment for Infogain, which has in turn very badly hit in the slowdown. At this juncture where do you see the demand coming from?

Eddie Chandhok: Indian market can be classified into two segments – government and corporate.

At the corporate level, there still remains a certain level of caution in terms of spending. Retail sector has become very cautious in terms of spending, since it faced a major set back during this slowdown. This, in turn, has effected Infogain because it is an important area for our business.

However, some of them who have seen slowdown in the past six months, have restarted investing in technology. There was a caution. However, talks have resumed and proposals have started coming out. The companies are so low on the stack, with regard of investment, that they really have no choice but to make huge investments.

This, in turn, is calling for the rise of a new trend of outsourcing. In the past, business with corporate sector was more of staff augmentation, where staff was provided, who along with the company's IT department carry out a project.

However, today, this model is gaining less and less currency. In the current scenario, companies are realizing that they need to focus more on core activities and have started outsourcing. Thus, the trend of outsourcing is gaining traction in the corporate sector.

Technology spending in the government sector - central, federal or state government - is increasing and the rate of increase is also going up. So the company is focusing in this space and has made investments, especially in the food and agriculture, and health sciences spaces.

CIOL: Companies have become very cautious in terms of investments and ROI. So what kind of changes do you see in the business scenario?

EC: India is still in a growth economy. The situation is more of a slowdown; slowdown in the growth rate as opposed to recession.

We are already seeing changes in the market in terms of technology investments. Spending on  technology is happening and will continue to grow and the size of the pie continues to become bigger, however, at a slightly lower pace than an year ago forecast.

Today the importance is more on better quality investments and companies are very careful with business cases. People are making investments that will benefit in the longer run.

Unlike before, Infogain is doing a lot of ground work in terms of calculations and realizations of ROI. It is also helping internal business management and IT department to make much stronger case to go after, with whatever budget is available.

Today finance department is much more involved than it used to be. They are not throwing money (for investments), however, they should be to begin with. 

CIOL: What are the emerging trends in ERP space?

EC: In the past, medium-size businesses used spreadsheets or smaller applications. However, today more of medium-size enterprises will start investing in ERP. The speed at which information is disseminated becomes lot more important when you compete on a global basis. I'm seeing a trend where mid-size enterprises will invest in Oracle type products.

On the other hand, customer service is becoming more important as business is demanding more and more information. Thus, there arises a need for better business intelligence solution in place. Previously, this was a trend only in large organizations, but today medium size businesses have also started investing in CRM.

CIOL: What are the newer offings from Infogain?

EC: Infogain, which already has huge investments in the Oracle stack of products - from ERP to CRM to business intelligence, to retail solutions -  from the technology perspective, sees a lot of traction in the business intelligence space.

The company has plans to increase people capability in CRM space and continues to invest in ERP space in order to gain more flexibility. On the retail side, the company has very strong point of sale solutions and will now grow capability around merchandising space, i.e ORMS.

The company will also invest in Oracle Business Intelligence Enterprise Edition suite (OBIEE), a relatively new solution from Oracle, as it expects companies to continue invest in it.

From the vertical perspective, the company has plans to focus and invest in telecommunications, transportation, insurance and claim management domains.

CIOL: What are Infogain's plans for India?

EC: India continues to be a lucrative market for the company, when compared to North American and European market, where there is a negative growth in terms of technology spend.

The company grew at 10 per cent quarter-over-quarter in 2009 and recently opened offices in the UK and Middle East and a development centre at Pune. Infogain is also set to open two new bases at Mumbai and Saudi Arabia, and has plans for Rajasthan, North East, Sikkim and Orissa.

Infogain has 750 of its 1,000-odd staff based in India, and the company hired roughly 40 people in the last quarter of the last fiscal. The company, which presently has 10 per cent of its revenues from India, foresees the figure going up to 20 per cent next year.

We are very bullish about the business. These investments are part of the company's long-term strategies, where it sees potential in these markets. Investments in solution, people, sales and organizations continue unabated and these investments will, in turn, accelerate the company's growth once the market recovers.