Financial Daily from THE HINDU group of publications
Friday, Sep 13, 2002
Corporate - Announcements
Apar Tech to focus on offshore capabilities To invest Rs 15 cr on expansion
BANGALORE, Sept. 12
APAR Technologies Ltd opened its second offshore development centre here and plans to invest a further Rs 15 crore on expansion in India, in keeping with the company's strategy to move operations offshore.
Till about a year and a half ago, the company was purely an onsite player, operating on a staffing model. Today, it has 450 people in India, which will go up to 700 by year-end, according to Mr Achyut Godbole, CEO. At present, 70 per cent of the work is done onsite and 30 per cent is on time and material basis.
The offshore model will be based on "Extended Development Centres" in India for customers.
EDCs will also be built for "product codevelopment" customers. With the current need to constantly bring in new features, new versions into products, customers need to develop products faster and cheaper, and reduce time to market, Mr Godbole said.
Apar promises to help this aim by taking on product codevelopment projects and doing them offshore in India. Apar has worked on products such as telecom billing packages and enterprise asset management products.
Customers in this area typically bring in $4 million per year, he said.
The company is now focussed on developing long-term relationships with clients. Its revenues dipped last year by 12 per cent, because of the move to offshore, where rates are lower, Mr Godbole said. However, the main concern at present is to build up the offshore development structure.
Apar also plans to target the domestic market to make technology that is reusable in other products and customers who are reference able. Warburg Pincus has a 45 per cent stake in the company.
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