Cognizant Makes A Move On ITES, Plans 5000-seat Facility

New Delhi: | Updated: Jul 30 2002, 05:30am hrs
After Wipro’s acquisition of Spectramind hotting up the IT-enabled services (ITES) sector, Cognizant Technology Solutions, a US-based application management and e-business company, is all set to make a mark in the Indian ITES sector.

Through its subsidiary in Chennai, the Nasdaq-listed Cognizant Technology Solutions is in the process of setting up its first global business process outsourcing (BPO) facility in India.

In the next four years, the company intends to set up a BPO base of 5000 seats, according to Cognizant president and chief operating officer Lakshmi Narayanan.

He did not disclose the investment planned by the company for its foray into ITES.

However, according to QAI (an IT and ITES consulting and training firm) head-ITES Umesh Vyas, close to $20 million would be required to set up a 5000 seater BPO facility.

Before the end of this calender year, Cognizant intends to launch the first phase of its business process outsourcing (BPO) initiative in India.

“Following repeated enquiries from around a hundred fortune 500 companies on BPO services, we have finally firmed up plans to enter the ITES sector,” Mr Narayanan said.

Currently, the company is weighing all options like setting up its own BPO facility, acquiring an existing player, setting up infrastructure for leasing out and providing technical expertise under a consultant.

“We might start with one of these four options and then eventually enter all these in the coming years,” he said.

The company intends to offer BPO services in the verticals like insurance, health care and financial services.

According to sources, eFunds vice president of business process management Raju Bhatnagar has been sounded out to head Cognizant’s ITES initiative in Bangalore.

“We are setting up our management team in Bangalore but haven’t yet decided on the location for the BPO facility,” Mr Narayanan said.

For the second quarter ending June 30, 2002, globally Cognizant recorded revenues of $54.4 million, up 17 per cent from the first quarter of 2002.