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Satyam to focus on offsite development centres

Satyam Computers Chairperson B Ramalinga Raju has been quoted as saying that the focus of the industry until 1991 was on onsite development when there was a paradigm shift towards offshore development.

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"We were one of the first companies to have a 64 KBPS link and take advantage of that paradigm shift," he said. Currently about 1,100 companies are following this practice.

"However, over a period of time, both foreign customers and Indian service providers started raising a few important questions. While the customers were concerned about the difference in work culture, non-availability of immediate service providers and inadequacy of service providers to tackle probable problems, the Indian companies questioned the difference in payments for the same quality of service," Raju said.

"The concept of an offsite development centre in contrast to offshore development centre was evolved to address these questions," he added.

Offsite development centres will have a wider customer interface where customers would feel more comfortable to entrust any job.

Satyam's model of ODC comprises 80 per cent back office work in India and the rest will be done abroad against the benchmarks set by the successful local companies.

"With this model, we will be able to maintain competitive pricing with almost the same profit margin," he added.

While the ODCs will provide added advantages to the company, there would not be any differentiation between the newly formed ODCs and the offshore development centres set up earlier.

Satyam that has recently set up an ODC in New Jersey is planning to set up another in Atlanta. Also, two more centres in the US and one each in UK, Japan and Singapore are in the pipeline.

Among the recent significant developments at Satyam are the creation of vertical lines of business, extension of profit centre concept to strategic support units and setting up a global competency centre.

Out of the eight strategic business units, six are based on the lines of business, some of them focused on more than one LoB. The LoBs include insurance, telecom, manufacturing, finance and banking, transportation and health.

"We have worked on several projects and gained a lot of domain expertise. How to capture that knowledge and how to disseminate and institutionalise that? So we have set up the Global Competency Centre to handle this specific sector based competence. This will drive us to move up the value chain," he said.

The concept of a profit centre, introduced earlier in SBUs, is being extended to support units like HR, finance, quality and corporate communications. About 240 service offerings have been identified internally and the heads of each unit performs as an independent CEO of that circle.

- Compiled from the Indian media

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