Thursday, January 17, 2008

CSC eyes mid-market outsourcing


OUTSOURCER CSC has moved to head off competition from Indian software services players with a specialist business unit designed to counter the tactics of firms such as Satyam, Infosys and Tata Consultancy Services.

The creation of the unit coincides with CSC's push into mid-market technology outsourcing, which is being made as part of the company's Project Accelerate restructuring program.

The move has CSC more aggressively targeting US and European deals worth between $US50 million ($56.8 million) and $US350 million - a market that is hotly contested by India's IT outsourcing companies.

CSC has typically focused on US and European contracts worth more than $US1 billion.

"What we've done as part of our strategic initiative is we've elected to compete directly with the Indian pure plays," CSC president and chief executive officer Mike Laphen said.

"What they attempt to do is get in the door and maybe its 10 people, but then to try to go to 100 people and 500 people and so forth in those smaller increments.

"So we have a business unit now that competes at that level and will go in and compete for those projects with the Satyams and others," he said.

Like its rivals, CSC also hopes to turn 10-person projects into deals worth more than $US50 million and Mr Laphen said that the economics of outsourcing meant that the company would not move wholesale into targeting small US and European deals.

"I don't see the scope of work we're doing in the $50 million to $350 million range getting smaller. I think that's kind of bottomed out as to what makes sense in scale," he said.