Ganesh Ayyar, who recently joined MphasiS as the CEO, believes that the company needs to focus on small and medium size projects rather than larger ones amidst the current scenario. In an interaction, Ayyar, who joined MphasiS from HP, says the current base of $120 billion coming from the HP-EDS association gives the company an edge over others with a larger client base. Excerpts:
What is the scenario in the applications services business at present?
The market is very tough and clients are cutting on discretionary spending, which is a larger part of their spending for applications services.
At the moment, we are focusing on mid and small size projects that come alive quickly rather than large ones, which are getting delayed.
This also gives us an opportunity to retain existing clients. We expect this strategy to get us good returns in the mid-term.
What about pricing pressures in the business?
As far as application services is concerned, we are experiencing a shift from variable payments to the fixed payment model, where the vendor shares the risk with clients. About 90% of our current revenues are variable payments and 10% come from the fixed payment model.
We also see a huge potential in the BPO business and clients too are demanding lower costs for existing work, or better quality for the same price.
How do you plan to leverage the HP-EDS association?
Currently, about 45% of our revenues come from HP as a client. But, it is not easy to get this business and we need to be equally competitive in terms of work and pricing. But we see it as a tremendous potential in terms of being a partner as well as a client.
The HP-EDS association helps us bring a larger base of services to other clients. Earlier, with EDS, we had a base of $20 billion, but now, with HP-EDS, it has grown to $120 billion.
Are their any specific areas where MphasiS is expected to focus, considering the current economic scenario?
Three quarters ago, we had a focused approach towards developing our base in Europe and we invested more in the sales area.
Our revenues in Europe grew 82.5%, increasing its share to 22% of the overall revenue in the last quarter.
Going ahead, we want to leverage our base in the Asia Pacific region as well, which is currently just 4% We have had good resources in this geography, but haven’t actually utilised to them to grow our market share
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