Capgemini seeks to step up platform-based offerings

IT service firm Capgemini is looking to increase the share of platform-based offerings in its portfolio. Such products currently contribute only about 2-3% to the Paris-based firm’s revenue.

A platform based solution helps a user company use automated services without having to spend on procuring necessary hardware, software, and pay annual maintenance charges on them. Providers of such solutions get assured revenue over a long period.

Salil Parikh, business head, Capgemini India, said the company will convert some of its managed services on platforms. “We recently acquired a company with procurement platform. We have coupled that with our BPO offerings and the payment will be on per-transaction basis. We will build other platforms too,” he told DNA.

However, Capgemini’s platform, unlike peer IT service firms, will be without any patents. The focus is more on providing consultation on effective execution.

“It’s not likely that we will have a Capgemini product. Our push is more for developing innovation working with our clients in a consulting mode.

Today IT-project failure in companies, for example, is on the rise. That is where we will come in with innovative ways of execution,” adds Parikh.
Capgemini is banking on its consulting arm, which contributes 12-13% of revenue, to help the platform business take off.

The firm’s India subsidiary is going to play a crucial role in its platform strategy, both in terms of cost reduction as well as for service delivery, Parikh said. “We have 12 centres of excellence in India, dedicated for various sectors. There will be ten more coming up in India,” he added.

Capgemini is continuing to hire more from low-cost regions such as India, China, Vietnam, Phillipines and others.

Capgemini India hired 13000 professionals last fiscal and it expects to grow that to 30000 people by the end of this fiscal.

“We had taken that approach of hiring in low cost regions since a long time and now about a third of our workforce work from these regions,” said Parikh.

In its recent Q2 result the firm’s revenue from financial services  grew 17%. But worries still remain in pricing. “Pricing is still not where it should be.

We cannot raise prices still though demand is high. Earlier if a project was for Rs100, you may get a base price of Rs80 if it’s done normally, Rs100 if you have achieved all the service level specifications, and Rs120 if you have over achieved you targets and value to client.

Things have not recovered yet. Most buyers are talking about Rs80 and maximum Rs100, but certainly not Rs120,” said Parikh.