GlobalLogic captive OPD business ripens

Pratima Harigunani

PUNE: Offshore Product Development (OPD) pie is increasingly witnessing a major slice coming from captive units who are turning over their operations to OPD companies in India. 

GlobalLogic, a product development services company, sees this trend reflected on its business lately with around eight to nine captives in its kitty so far and ongoing discussions for more. 

Its Pune center too would see five to six captives coming under its fold. “Discussions are on with some major captives here. Nothing more can be revealed at this point now. But increasingly more and more captives, especially those under the scale of 100 people see more business rationale in passing on their operations to an expert. An OPD captive is not the same as an application development captive.

Branding, talent attraction, scale-up and retention are major hurdles for MNCs. Initially they might put Indian operations in the hands of Indian kinship or friends but in the long run, it has to make business sense too,” stated Umesh Wason, director (Human Resources), GlobalLogic.

He was speaking at the sidelines of a press conference today where the company announced a strategic agreement with Kewill Plc, a supply chain product company. This is another instance of a captive under the company’s umbrella wherein, Kewill will transfer its research and development operations in India to GlobalLogic. 

The erstwhile Kewill team of 65 people in Aurangabad would be integrated with GlobalLogic and as per plans will double up in a year’s time.

Interestingly, Shirish Deodhar, senior vice president for Symphony Services, another Product engineering services provider, has earlier observed the same trend in OPD space.

“According to a Forrester report, captives need the 500 people level to maintain economies of scale. Many captives want us to takeover them. It's a reverse-BOT (Built-Operate-Transfer) equation. Reasons for this may vary - the bigger ones want to balance their risk with a partner, some need specialized skills, some want to scale faster, some do it spur healthy internal competition and cross learning. The smaller ones do it on account of non-manageability while for some it's the same story of attrition, hiring and operational headaches, which is why we come into picture as our administration and HR platforms are common for all.”

GlobalLogic would also be looking at a new development center in south India soon. It currently has delivery centers in Noida, Nagpur and Ukraine, besides the latest addition in Pune.

The new center is expected to be on the same scale as that of Pune and would be operational by the end of this year, Wason said.

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