Intelligroup to focus on shared apps outsourcing

US-based Intelligroup Inc, a provider of strategic IT consulting, application management, support and implementation services, said shared application outsourcing would be its core focus and the company would continue to invest and strengthen this service.

Shared application outsourcing is an outsourced services offering that uses a shared services centre for supporting multiple customers with common support needs. Through this service, customers can purchase support by fixed hours in a month as compared with the traditional people-based model.

“Shared application outsourcing services enable customers to purchase only what is required as a bare minimum to run their enterprise resource planning (ERP) applications effectively. They can purchase more capacity only when in need. This gives them huge cost advantage as the application support spend can be controlled effectively on a monthly basis. So, cost savings could be as much as over 50 per cent in certain cases,” Gopal Ramaswamy, vice-president (outsourcing) at Intelligroup, told Business Standard.

The over $157-million (approximately Rs 754 crore in 2008) company with global delivery centres in Hyderabad and Bangalore, employs 2,000 resources globally including 1,400 in Hyderabad. It provides SAP application outsourcing to more than 40 customers globally.

“We see shared SAP application outsourcing adoption across geographies – the US, West Asia and India. It is a matured market in India, with the size being about $150 million (approximately Rs 720 crore), and growing at 10 per cent year-on-year. The drivers for this growth is primarily on account of more adoption of SAP by small and medium businesses (SMBs) in India as well as the need to cut costs by companies and globalisation in general,” Ramaswamy said.

Intelligroup’s immediate focus is to increase customer acquisition in North America and the UK, without losing focus on Indian and West Asian markets.

“While we have been providing shared outsourcing services in India and West Asia, we have geared up to extend these services to the US markets as well. We will be conducting marketing events like webinars and roadshows over the next few months to increase our market share in this space,” Ramaswamy said.

At present, shared application revenues have a smaller footprint as compared with the company's overall outsourcing revenues. “The share should increase as we wins customers in the US and UK,” he added.