The Hindu Business Line : Carving a distinct identity amidst changing times

Hughes, Flextronics, and now Aricent - the name has changed over the years. But the company and its clients remain the same, despite having been nurtured by three parents.

Aricent, which was formerly part of Flextronics, changed its identity only four months ago and is now in the throes of evolving to create its own distinct image.

A unique company in itself, it has had to change its identity three times in less than two decades. It started off as Hughes Software System in 1991, and was acquired by Flextronics and named Flextronics Software Systems in 2004. Again in September 2006, it underwent a transition with Kohlberg Kravis Roberts &Co and Sequoia Capital acquiring 85 per cent of the business in the company, and re-christening it Aricent.

As transitions go, it must have been painful, but Aricent has been able to stick to its guns and chosen to see the brighter picture for its employees and stakeholders. It continues to leverage on its HR, business and management strengths to create its new identity.

"In terms of business implications, we have had a positive growth over the years. We have been able to show our employees the bigger picture of what opportunities it would bring to them," says Manoranjan Mohapatra, President and COO, Aricent. Communicating with the employees has not been so difficult as they already know that its only a change of name and everything else remains the same, so retaining employees has not been an issue during these fluctuating times.

But to attract employees is certainly challenging, as one needs to convince them that they would be working for the same company, with just a different name, he explains.

At present, Aricent is engaged in the gigantic communication exercise by talking to all stakeholders and creating awareness of its new identity. While acknowledging that it would take another 6-8 months to market the brand completely, Mohapatra says the new company has been gaining acceptance over the last few months.

Preventing mid-life crises

The company, with $300 million in its kitty, has grown over a period of three decades. As it enters its mid life, Mohapatra feels that to prevent any kind of "mid-life crises," a host of initiatives are required on the part of the organisation.

One of them is a confidential poll among peers to recognise the attributes of their colleagues. For Aricent this is part of their effort to get employees acknowledged within their ranks. As product life cycles gets reduced, there is intense pressure on employees to deliver on their commitments. This makes them highly focussed on meeting their objectives and often, in the process, they lose sight of those small initiatives that would make a world of difference in employee relations within the peer group or in the outside business world. Thus, a confidential poll encourages employees to go that extra mile, says Mohapatra..

"Being recognised within your own peer group means a lot to employees," stresses Mohapatra, adding that this kind of exercise has helped bring down attrition by 22 per cent over the last two years.

Aricent has another tool to record its involvement with employees. Hewitt Associates conducts an annual employee engagement survey, in which Aricent has scored in the range of 52-57 per cent. However, Aricent is targeting 65 per cent, which is the best score a company can achieve.

On the business front

On the business front, Aricent has ambitious plans. A major player in the Original Equipment Manufacturer (OEM) space, the company is now additionally focussing on accruing more revenues from offering services to handset manufacturers and service providers.

"Since the history of the organisation we have focussed on the OEM segment. It contributes 60 per cent of our revenues. Right now we are a $300-million company, but as we see ourselves growing to $1 billion over the next few years, the revenues accrued from our OEM business and from our services and vendor business will get equalised."

With three development centres in the country, Aricent has set its eyes on a fourth development centre in any of the tier II cities. It plans a capital investment of $100 million and around $50 million on R&D over the next three years.

With 7,000 employees globally and around 5,000 within the country, Aricent plans to increase its headcount by another 4,000 over the next year.

As the company eyes different regions to spread its wings, it is betting high on growth from Eastern Europe, East Asia and China. Having completed two years of its operations in China, it expects to increase employee strength from 25 to 100 over the next year. The company prefers hiring local people as they can better relate to the socio-cultural environment of the country and can benefit from the company's presence in that country. In fact, China, Taiwan and Korea together contributed $6 million to Aricent's revenues last year and the company expects the figure to reach $15 million in the next one year.

Industry watchers' take

Market watchers are of the view that the company is well-positioned to adapt itself in this scenario.

"While a strong parentage is required in the initial years, after reaching a critical mass, the company has achieved a certain capability. Being a new entity from Flextronics will not be detrimental to Aricent's growth and it will also give Aricent more flexibility to choose and serve its clients" says Ashish Basil,Partner Earnst&Young.

Pradeep Udhas, KPMG Global Head, Sourcing Advisory, also feels that since the company is operating in a space which is not as crowded as in the financial services domain and is well-positioned, it may not be so difficult for the company even in such a time.

priyanka@thehindu.co.in

More Stories on : Human Resources | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
New horizons

Carving a distinct identity amidst changing times

Bring `em into focus

Upgrading to IE7

Freeware to hide folders

Travel, sans the running around

`Go for product development'

The smart way to tackle e-waste

Quiz

Hard work may be rewarded by bad press

Cartoon