Defining a Corporate Strategy for an Information Technology Service Company
With the slowdown in the economy, the client with a turnover of 800 crore was facing a lack of volume in the e-business space and a downfall in valuations. The top management at the company believed that there was a need to redefine the position of the company by examining the external environment and then charting a future course of action. Thus, they requested UC to answer the following:
- What are the opportunities for growth in the areas of network engineering? Should the company be a business process outsourcing (BPO) player, considering its strengths and weaknesses?
- How to retain high valuation and sustained earnings? In addition to BPO what are the other peripheral services that the company should offer?
- While being a BPO player ensures sustained earnings and appeals to value investors, what peripheral services could be offered along with the BPO, in order to drive valuations upwards (cater to a momentum investor)?
- Given the decline in the US market, which other countries should the company focus on?
To define the corporate strategy for the client, UC evaluated the strengths and weaknesses of each business independently. The engagement team considered the synergies to be exploited across businesses while evaluating the company’s entry into the information technology outsourcing (ITO)/ BPO space. UC divided the study in the following three sectors:
- Network engineering business – Global scenario
- Conducted detailed analysis of the value proposition offerings in the network engineering activity chain
- Conducted detailed analysis of player strategies at each of the activity chain components
- Analysed the opportunities of each emerging technology platform would bring forth in various regions of the world in the future
- Recommended strategic direction in terms of technology and regional focus, strategic alliances and risks in adopting the strategy
- Software and enterprise network solutions for ITO and BPO – Global scenario
- Conducted analysis of global trends in information technology / BPO with respect to market size, spending trends and outsourcing opportunities in terms of industry verticals, and regional outsourcing trends with respect to each segment of the ITO space
- Studied the competitive landscape and key success factors for each of the ITO / BPO service opportunities
- Captured key learnings for the client company and defined the strategic direction for these business divisions
- Electronic business infrastructure – Global scenario
- Analysed the service provider landscape to identify opportunities in terms of the International Data Corporation (IDC), virtual private network, managed network services, IP voice equipment market, convergent network consulting, managed application services and network integration and web hosting
- Analysed competitive strategies and issues with infrastructure roll-outs
- Analysed various issues faced by the division and identified various strategic options the division could pursue for growth Prepared indicative financials for pursuing various opportunities
The client received a detailed strategy for the company to reposition itself.