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Even as the curtains came down on an intense round of networking between US and Indianbusinesses in the wake of the US President, George Bush's visit to the country, the India journey for the EDS Vice-President, Business Workforce and Capacity Management, Stephen R Heidt, had only begun.

In between attending marathon meetings and interacting with Government and industry representatives in New Delhi, Heidt, who is also responsible for all EDS Best Shore activities, announced the company's intention to double the India headcount to 6,000 this year, and infuse about $35 million investment over the next couple of years.

eWorld caught up with Heidt to find out more about EDS' plans for India and the country's significance in the company's global delivery strategy. Excerpts from the chat:

For EDS, India is a best-shore location. What does that imply in your global scale of operations?

Terms such as onshore, nearshore and offshore are relative to where you are located. So for a client in Germany, offshore could mean Hungary or India. Best-shore locations refer to the highest quality and lowest cost-execution point that fulfils our contract requirements.

India is one of our largest best-shore presences and that is because of the characteristics of the quality we can deliver from here, and scale and cost of operations. So this is positioned as a key part of the continuing growth of our best shore strategies.

Today, we have large offshore presence here in India. Gurgaon, Chennai, Pune and Mumbai are our key concentration. We have a fairly large scale of operations in Brazil and Argentina, Canada and Malaysia, amongst many other locations. I believe there are 23-25 prinicipal best-shore locations.

Is that not too diverse a model?

We think 23 are too many. It is not concentrated enough. The overhead and service delivery model is too complicated. Beginning this year, we have begun a concentration initiative. The exciting part for the EDS employees in India is that we are concentrating some of the new volume to India.

We have internal and booked business work headed here that lets us double the India operations. What comes out of the concentration initiative will be an important business differentiator.

Consider this. Our business includes IT outsourcing that deals with things such as global networking, storage, hosting services, desktop, desktop support, hardware, software and people integrated into an infrastructure.

The market sometimes defines IT Outsourcing to include Application Development, but we do not.

The second pieces are applications business — we have over 40,000 applications developers around the world; and the third one is the growing BPO business.

Today, there is a centre that specialises in IT Outsourcing, a centre specialising in software engineers and BPO. Our concentration strategy in best shore is to bring those three together into single footprints.

We believe as we do that, there would be no other provider with such concentrated strategy. Not only will it give us effectiveness for a global price point but also benefits from an employee perspective.

As an employee, if you are in an isolated call centre or technical helpdesk environment and if there is no other business in the facility, you may choose to leave EDS to pursue what's natural for the development of your career or enlargement of your pay cheque.However, if we co-locate, you can move right up the development path inside our framework. We are thinking of this in terms of a campus where you can have freshers coming in and growing through the different businesses. It will unlock a tremendous potential. We are focusing our first efforts in Pune and Chennai. This idea of a global service centre is being constructed and orchestrated here in India, this year. With the overcast of the recent talks (US-India bilateral talks), it is safe to say that the adoption rate, maturity, market understanding of capabilities that exist in India, has grown. As a result, our priority has been to establish a much stronger, broader, and more modern presence in India first.

What operations do the Chennai and Pune centres specialise in, at present?

Right now, the centres are very skilled and highly certified and respected in our network as application centres with some sub-products related to BPO. In the existing structure, different locations have different feel.

For instance, Mumbai is much more BPO-oriented with a little applications and shared services feel. As we grow, we will start to place the new capabilities into campus environments.

Will there be any intra-city movement of professionals as a result of this realignment exercise?

I would suspect there has to be some in order to fuel the competency and quality of services we deliver. We are not thinking of it as a wholesale personnel migration. But there has to be cross-pollination of the strong leadership we have in each one of these businesses in different facilities to make this work.

Some of the professional talent will relocate. And over time, we will have to figure out our strategy for the other two centres. I just do not know yet.

We understand the blueprint of a global services centre and since we have already talked about 3,000 units of work moving in, we will use that movement to create this concept.

It may well be that after we concentrate there maybe a residual need for some specialisation. Rather than to predict all that, our strategy is to get going. We will then see what things look like by the end of this year and there may still be process specialisation.

Moreover, the other thing to consider — and it is critically important for a company like EDS — is that we need a degree of reliability, redundancy and assurance on behalf of our clients. So we will not ever concentrate on one. We need some diversification.

But as a result of the internal rejig, will the number of best-shore centres come down?

Yes it will. I would love to be able to tell you what that number is but I do not know, right now. The point blank answer is you cannot re-arrange global delivery systems on this scale without a human impact. People have choice in the market, and you see it here too - the turnover rates that we have to manage in India. So yes, there will be some impact. It is like saying how much can you do defensively by rearranging your existing work, and how much new work you sell. All that blends together to determine the impact. So to the extent we grow, one can offset some of that impact. Moreover, it is a people business. And the knowledge of professionals across the world, in places such as the UK, the US, Kuala Lumpur and India is a critical asset to our understanding of a client, and our understanding on how to compete. We can do the best in terms of retraining and relocating those people; and for those that do not, there will be some impact. I do not think we will be able to make it a zero-sum game, but to the dree we can minimise it, we will.

When did you start the realignment process and how long will it take to implement it?

We have been working on it since last summer. This is a 2006, 2007 programme, we need to complete it by then. If you think of 1,20,000 people in EDS, it is a journey that we have to take in the next two years.

How will EDS expand its existing operations in India over the next few years? Is there a concrete plan to scale up Indian presence?

We have 3,000 people in India at the moment and it will grow to 5,500-6,000. And of course the more sales success we have, the faster that number grows. I am clearly comfortable with doubling EDS presence in India, this year. The net 3000 addition will be a blend of restructuring our existing best shore network and addition of new client, new growth. I think it is a great time to be an employee for EDS in India because that stacking and concentration is going to be tremendous.

Keeping aside the training investment, the capital expenditure on facilities, technologies and networks will be over $35 million over the next couple of years. If part of our workload is relocating jobs out of other countries, then we have the disposition aspect - that is a different discussion but just as critical.

moumita@thehindu.co.in

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