Mphasis to promote startups by employees

The company will fund the business ideas, provided they prove the work through pilot project

Information technology services firm Mphasis said it plans to work as a venture capitalist firm for employees who can come up with start-ups that are aligned with the company’s focus areas.

"I call it biorganic, which is neither organic, nor inorganic. Bright employees, who have practical ideas, can come forward and become entrepreneurs with Mphasis. That is the model we are promoting," said Ganesh Ayyar, chief executive officer, Mphasis. "Today, I have one working for the last nine months in the space of governance risk and compliance (GRC). You will have to wait for around four months and you will see something," he added.

The entrepreneur or team can have their own brand, own human resource policy, hire best of the people and can be an offshore or onsite model.

Ayyar said that the company has not defined and will fund accordingly if it is a great idea and as long as it make business sense. "The pre-requisite for funding is that they have to have a successful pilot with one of our clients. Up to a certain stage, we fund and at that stage they have to demonstrate that they can get a successful pilot. If it is a successful pilot, they will get the next stage of funding. Otherwise, we cut our losses and go our ways," he said. If the business model fails, the employee can come back to join mainstream operations, he added. Even if the business model fails, the employee who started the business can come back to join the mainstream operations.

Commenting on the reports that the company is going to sell its domestic business process outsourcing business, he said that the do not want to commment on it.

On business from HP

He said that the company has been transforming from its traditional model to digital operations, to cater to the changing need of the customers. The company's major revenue sources are the direct international business, in which it has a bigger and growing focus on, direct domestic business, which is not a high growth focus and the business to Hewlett-Packard (HP), which is also major shareholder of Mphasis.

"At one stage, HP used to be 72 per cent of our revenue, now last quarter, they were 31 per cent of our revenue. Almost 98 per cent of our business with HP comes from the enterprise services and if you look at their recent quarter announcement, of their business, year on year it has declined 16 per cent," he said.

He added that, however, Mphasis also could not crack the code of expanding business with HP, which had its impact on the business. It was not able to crack the code for last four years and is expected to see a further decline in HP's business to the company, he added.