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TCS must enhance BPO capability, says advisory firm

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CIOL Bureau
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BANGALORE: Talking about company acquisitions, Avinash

Vashistha, CEO, Tholons Inc pointed out the need for TCS

to enhance its BPO capability to service current and future clients. He said,

"It is a critical imperative for them to make a large acquisition, which

doubles or triples their existing BPO capability. Vertex seems to be a good fit

for them in this direction".

He stated that Indian IT firms are acquiring companies

in the US and Europe to get clients (in certain domain) and people (with actual

client experience) to inorganically grow in the shortest possible time".

"When you look at the market growing at this

point, it is imperative that Indian companies continue to make acquisitions in

the next one year to meet the numbers they are projecting for the future,"

he added.






Tholons Inc., an advisory and investment service firm, focuses on bringing
globalisation leverage of equity investments, buyers, suppliers and risk

management. It has assisted more than 200 client engagements over last decade

impacting deals totaling $ 5 billion.






Talking about recent acquisitions, Vashistha said, "Other than IBM and Accenture,
other companies are mute towards any significant and larger acquisitions.

Further, acquisitions are taking place more in the BPO space, enterprise

application, product and testing."






Talking about Wipro's
acquisitions
, he commented: "Wipro has been aggressive over the last

six months by acquiring four companies. The acquisitions were meant to build

certain geographical footprint, particularly in Europe. Through acquisitions

Wipro is also looking at building domain expertise, acquiring intellectual

property and patents and basically strengthening its consultancy skills.

However, there is a need for Wipro now to make a significant and larger

acquisitions."






Vashistha said that though Infosys
prefers to grow organically, the next acquisition may happen from the standpoint

of consulting, strategy and geography.






The large IT firms will look beyond India to look at the possibility of
acquiring firms in China, Korea and central Europe. Tier-II countries like

China, Hungary, Czech Republic and Brazil are fast catching up with India as

clients are seeking low cost offshore services and the competition will be with

tier II cities in India.






A company faces at least two issues in large acquisitions. One is the financials
of the company and second what it does to integration of teams from different

cultures. Vashistha says, many acquisitions fail due to integration issues.






He said, "M&A would pick up drastically in next few years and Indian
players acquisition will be more towards ERP, product companies especially

banking product."






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