Outsourcing continues to be the catchword in the IT industry. And cashing in on this trend is the Indian subsidiary of $11.4 billion IT giant, Computer Science Corporation. Srikanth R P finds that even when the slump in the global economy seems to have affected most companies, CSC India grew at an impressive 84 percent

What CSC is today represents only a small fraction of the potential we can reach

Arun maheshwari expects verticals like banking and healthcare to grow as big as the insurance domain

While IT budgets have been slashed heavily across the board and the economy is gloomier than ever, there is one line of business which has remained strong outsourcing. And India, with its cost and quality advantages in the software services space, is gradually becoming a preferred destination for MNCs. Among other global companies that are utilising India’s manifest strengths in the software services space is the $11.4 billion IT giant, Computer Science Corporation (CSC), which is utilising the services of its 100 percent subsidiary, CSC India, in a big way to fulfil its outsourcing needs. Today CSC India is not a mere representation of its parent, but is fast becoming a strategic part of the global arm, which participates in developing cutting-edge technology products for its parent.

History
The company was set up in Indore in 1996 when it started operations as a subsidiary of Policy Management Systems, a global vendor specialising in the insurance space. But the moment of reckoning for the company was when it became a part of CSC in late 2000, following the acquisition of its parent by CSC. For instance, earlier the company was restricted to the insurance space being part of PMS. As a part of CSC, CSC India today has the opportunity to grow into a large and diversified company in verticals like healthcare and banking areas where CSC has a dominant presence.

While the rest of the IT industry was in the throes of recession, the year 2001 was a momentous and positive year for CSC India. For the year ended March 2002, CSC India grew by an impressive 84 percent and ended the year with a turnover of Rs 53 crore. The current turnover may be small, but the potential for the company to be one of India’s foremost software exporters is huge. For instance, CSC regularly outsources projects worth billions of dollars every year to many companies across the world. Even if the Indian subsidiary manages to garner a small percentage of the projects CSC outsources, the turnover would be huge.

According to Rajesh Therani, the CFC porting project established CSC’s expertise to do a start-to-end project

CSC India has another unique advantage. For instance, when HP announced the takeover of Compaq, there were apprehensions about what would happen to Compaq’s subsidiary in India, Digital Globalsoft. But CSC India (which was PMS India then) had no apprehensions on that count when CSC took over PMS globally, as CSC had no Indian subsidiary. So PMS India simply became CSC India and there were no merger pangs.

Since then, it has been a steady and gradual climb for CSC India. And since outsourcing is the buzzword today, CSC India is naturally upbeat on its growth prospects. Says Arun aheshwari, CEO and managing director, CSC India, “What we are today represents only a small fraction of the potential we can reach. Starting off with only one offshore project we now handle over 45 projects across the globe. And unlike the past, where our focus used to be purely on insurance, we have now branched out into different verticals like banking and healthcare. While insurance is still our biggest domain in terms of revenues, we expect verticals like banking and healthcare to grow big and become the same size as the insurance domain.”

The company started off with providing maintenance and production support services to CSC’s products in insurance. One project that gave CSC India recognition in the global domain was the CFC porting project, which involved porting of an application from OS/2 to the Windows 2000 platform.

Says Rajesh Therani, assistant vice president Systems, CSC India, “What made this project unique was that CSC India did the entire work, right from the requirement analysis and estimation to implementation. This project has established our expertise and showed the capability of the organisation to do a start-to-end project. Currently we are involved in a couple of core projects like the S3+ project and S3+ Alfa browser project.”

What makes the S3+ project important is the fact that S3+ is the flagship product of CSC and addresses all the operational needs of an insurance company. In the beginning, a team of six people was sent onsite to get trained on the product and take up development, maintenance and product support work from India. In the last two years, the S3+ team has reached such a level of expertise that most of the development, maintenance and support work for the product is now done from India. This project proved CSC India’s capability in offshore product maintenance. Besides this, the company is also involved in one of the biggest projects, which is the ‘S3+ Alfa browser project’. CSC India is involved in developing the front-end screen development, middle layer architecture and designing the back end layer. What started off as a six-member team in insurance is now a team of six hundred people. A similar story is now taking place in banking. Starting off with a small team of four people, the team has now grown to 26 people in a short time span.

Adds Dhimant Shah, general manager Systems, CSC India, “In addition to maintenance, support and development for CSC’s products, we are now involved in suggesting changes, and in designing the core architecture of CSC’s products. This is a sure proof of CSC India moving up the value chain.”

Quality initiatives
That quality plays a critical role in CSC India’s operations is an understatement. For instance, Maheshwari keeps on reminding his employees that the first priority of any project should be quality. Says he, “Right from day one, we are absolutely clear that the priority of any project should be quality, timeliness and cost in this order. Everything else is secondary.” Such has been the focus on quality that some of the innovative quality initiatives taken by CSC India have been appreciated by other subsidiaries of CSC globally.

Says Birendra Nath Sasmal, deputy manager Quality, CSC India, “Our journey to achieve better quality is a continuos and on-going one it will never end. We have already achieved milestones like ISO 9001 and CMM Level 4 certification. The next steps are achieving CMM Level 5 certification by December 2002 and PCMM Level 3 certification by April 2003. Going by our past record and employee mindset, we are confident we can make this happen.” The result of the relentless focus on quality has meant that CSC India now takes much lesser time to complete projects with lesser number of errors. For example, in the last six months there has been a 1.45-percent improvement in schedule compliance and 2.5-percent improvement in resources utilisation. When projects run into crore of rupees, even a small percent improvement can make a huge difference to the performance of the company.

It is again quality, which comes to the fore when it comes to hiring people. For instance, out of every 10 candidates who clear the written tests, the probability of selection is only one out of ten. Company sources say that this focus on quality in selection of people has made CSC India what it is today. One more unique approach the company has taken is to take particular attention in developing domain expertise in sectors like property and casualty insurance, life insurance, banking and healthcare. What makes this approach unique is the fact that as a general philosophy, the company not only recruits subject matter experts as business analysts but also makes it mandatory for technical staff to undergo some basic level of industry education.

Explains Ajay Tejpal, deputy manager HR, CSC India, “Making a technical person understand the industry he is working in, speeds up the process of development. For example, all our software engineers serving the life insurance industry must pass FLMI 280 and 290, which are industry certification courses for Life Insurance. Similarly those serving the property and casualty insurance industry must pass CPCU 1 and 5 within two years of joining the company. We plan to follow the same philosophy as we start serving new industries.” The company has also handpicked people from Insurance companies like LIC, GIC and exposed them to American Insurance policies. This approach has paid rich dividends and has made CSC India a force to reckon with in the Insurance domain. While the company has budgets for every function and activity, ‘training’ is one domain for which the company has no fixed budget.

Current Scenario
As outsourcing is undoubtedly the buzzword today and CSC is among the top three global outsourcing companies, CSC India surely looks to be on the threshold of a major growth. The company is betting big on the BPO space and expects to grow from the current team size of only 25 people to over 500 people in the next two years. Going forward, Maheshwari expects the company to play a bigger role in niche high margin areas like IT consulting and end-to-end system integration. Armed with commitments from the parent company to start projects in verticals like Healthcare, banking and chemicals along with new initiatives like foraying into the BPO domain, CSC India could well turn out to be one of India’s biggest software exporters in the years to come.