The Hindu Business Line : Expanding goals

FOUNDED in 1976, CGI, considered to be the largest Canadian independent IT services firm and the fifth largest in North America, is planning to expand its Indian operations in the wake of the growth in demand for end-to-end IT services.

The company, which has two offshore development centres in India, at Mumbai and Bangalore, specialises in providing IT solutions for financial services, insurance and banking, manufacturing, retail and distribution, healthcare and transportation. With its annual revenue touching $2.8 billion, CGI expects its scope of operations to significantly expand after its recent acquisition of American Management Systems (AMS), which is a leading provider of IT services.

"The growth in demand from our US and Canadian clients, which involves a wide range of application development, support and modernisation activities, will increase the flow of orders to India," says Mr Girish Bhatia, CGI's Vice-President (India Operations).

In an interview with Business Line, Mr Bhatia speaks about the prospects of the industry, as well as CGI's future plans. Excerpts:

Could you tell us something about CGI's operations in India?

CGI India was established in 1990 and has two offshore development centres, at Bangalore and Mumbai. These centres are ISO 9001-2000-certified and have been assessed at the SEI-CMM Level 5. CGI provides application development, application maintenance services and application re-engineering for its US, European and North American clients through its global delivery model out of these centres. Our domain expertise lies in financial services, insurance and banking, manufacturing, retail, distribution, healthcare and transportation.

Which are the sectors that are fuelling growth in the BPO sector for India? And how is CGI geared up, in terms of manpower and infrastructure, to cash in on this demand?

Even though CGI globally is providing BPO services to North American companies, we have not started our BPO operations in India yet. We are currently exploring the possibilities of BPO operations in India. Nineteen per cent of global revenues come from BPO operations.

What were CGI's revenues last year? What are the projections for this fiscal?

CGI India's revenue for the last year was $10 million. In the current fiscal ending September 2004, we expect to achieve a run rate of $20 million.

What are the company's expansion plans?

CGI India has been set up as a profit centre. So we always look for profitable growth only. We expect to grow by leveraging the strength of our parent company by offering global delivery model (onsite, nearshore and offshore or, what we call, bestshore model). We are well set to provide end-to-end IT services across all three tiers: Tier-1 (infrastructure outsourcing), Tier-2 (Application Maintenance) and Tier-3 (Application Development).

We have seen an increase in interest from our North American customers over the last quarter. The number of visits by customers has increased significantly over previous years.

Our objective is to double our technical staff by September 2004. The growth is going to come from new customers, increase in work from existing ones and maintenance of intellectual property within CGI.

Are you satisfied with the facilities available at the SEEPZ SEZ?

We are satisfied with the facilities available at SEEPZ SEZ. However, the infrastructure to reach SEEPZ leaves a lot to be desired.

What is the future for outsourcing? Who are India's major competitors?

India's value proposition and overall shift towards offshore IT and ITeS will certainly augur well for the industry, leading to an annual growth rate of 35 per cent in the sector.

In the IT sector, I feel that India's major competitors are China and Russia.

More Stories on : Interview | Off-shore Development | Outsourcing

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