Recently Infosys announced intent to make progeon an wholly owned subsidary of Infosys....acquiring 22% stake from Citigroup.Mohandas Pai, CFO, Infosys said that the decision was driven by market need. "Our customers want an integrated offering of IT services and business processing operations,"

Some time back i came across this Whitepaper at the Infosys site titled "Integrated Offshore Outsourcing Solution". Accessible here

The whole premise of this white paper is "Continuous improvement, productivity and innovation through consolidation of Business Process and IT outsourcing"...The need for Integrated offshore outsourcing solution is based on the argument that managers have to re-assess the scope of activities performed by external vendors to leverage synergies by consolidation of outsourced services. Managers have to look beyond the myopic silos of business transactions, IT applications and infrastructure and take a holistic view of business processes that includes all three components. Such a re-assessment will enable organizations to make IT accountable its contribution to the overall corporate profitability, while reducing hand-offs and eliminating disconnects between departments and external service providers. Companies cannot afford to fix processes and IT systems one at a time, rather by putting business processes at the center stage of all outsourcing including IT, corporations gain the ability to innovate, reenergize performance, and deliver value that today's market demands. Adopting "Integrated offshore outsourcing" will enable organizations to make agile course corrections, embed Six Sigma quality, and reduce costs while improving productivity across the value chain. The attached diagram highlights the major elements of "Integrated Offshore Outsourcing" solution from Infosys-Progeon.



Skimming through this whitepaper, reminded me of a couple of articles during the early part of last year at Sandhill.com by Ray Lane & Vinnie Mirchandani (a.k.a Deal Architect), here are a couple of excerpts from the same.

Ray Lane - I define software as a service as tying supplier revenue to a business outcome: the supplier sees the client's end result, measures its success, and receives revenue based on the results achieved.

This doesn't necessarily mean success-based pricing, however. It can be subscription, or even license based. In some cases, a company offers to sell a service. Negotiations can take place around buying the intellectual property, but the company can buy a software license and pay the supplier to operate it.

Deal Architect - The Indian view is corporations increasingly want ?cooked food? whereas the software industry still wants to sell raw food and Weber grills to customers so they can cook at home. And of course, many Indian vendors do not feel obligated to use currently available software platforms for their offerings. Still other vendors are on the lookout for software platforms to acquire and transform into services plays.

We all know that India (and other offshore markets) has become a hive for software development and support. In the coming BPO wave, existing offshore IT vendors and other offshore start ups are offering to take over horizontal business processes (finance and accounting, human resources), vertical processes (mortgage processing, media animation), and knowledge-based activities (analytics, market intelligence) for their customers.

Prashanth Rai