By Beth Mallino Many organizations have spent the past few years rationalizing their in-house IT portfolios against the plethora of sourcing options available in today’s IT services market. Initially, Western organizations’ hunger for low-cost labor led to the preponderance of offshore vendors, particularly in India.

That early surge to drive down costs, how ever, created an imbalance between the need for lower costs and the demand for
higher level value creation. Today most of the early adopters have realized their labor arbitrage gains, and now focus on using those same low-cost channels to boost value from process improvement, systems optimization and business innovation.

For CSC, an aggressive offshore strategy became increasingly important to serving its clients with a global service delivery approach. The strategy was to not only add low-cost resources but also provide innovative value from its global network of service-delivery centers, which could blend services such as consulting and process improvement with highly skilled application services and deep industry knowledge. Acquiring an established, highly respected services company with a major presence in India was the best way to meet customers’ needs and expectations.

CSC’s July 2007 acquisition of Covansys nearly doubled the size of CSC’s workforce in India to more than 14,000, making India CSC’s second largest country of employment. Covansys, a global consulting and technology services company headquartered in Michigan, with the bulk of its employees in India, operates as a separate business unit within CSC. CSC’s faith in Covansys was exemplified when it merged its Indian-based business under Covansys’ management team.

“Being a part of CSC meets our goal of creating exciting opportunities for Covansys employees, while increasing our capacity to penetrate new industry verticals and deliver superior service to our existing clients,” says Raj Vattikuti, president and CEO of Covansys. “Our combined customer set will serve as an advantage for both the company and the customer as we leverage both cost and capabilities.”

Project Accelerate: India is critical

Prior to the Covansys acquisition earlier this year, CSC established the India Direct sales program to address customers’ needs for services similar to what Indian-based providers offer, and also to compete directly with low-cost offshore IT providers.

The program is part of CSC’s larger Project Accelerate, which comprises five growth initiatives — one of which is India and World Sourcing. CSC’s India Direct sales channel has joined forces with Covansys’ existing sales organization.

“Together, CSC and Covansys will be able to offer existing and future clients a more comprehensive end-to-end offshore global delivery services model,” Vattikuti says. “This will encompass improved infrastructure, consulting services and broader industry solutions supported by our combined business, technical and
industry expertise.”

As with any acquisition, quick and seamless integration is paramount, both in sales and delivery channels. CSC and Covansys have an integration team in place, which has planned and designed consolidated processes, joint deliverables and
other changes to accomplish business objectives, Vattikuti says. “We are creating a common platform in India that will combine the strengths of Covansys and CSC-India, which will help us
scale up quickly to meet client needs.”

CSC’s strengthened Indian operations are an important component of the newly created World Sourcing Services organization, a network of more than 50 delivery centers across the globe. Says Mary Jo Morris, presipresident of World Sourcing
Services, “We offer our clients a variety of solutions across a variety of countries. Our clients care little about where the work is performed and care more about how well the work
is performed and how it supports their business.”

She adds, “It’s not just about finding a place where the costs are
lower, it’s about finding the talent to do the work we need to have done to support our clients.”

For Covansys, the symbiotic relationship with CSC will help the
company attract talent in the competitive Indian market, says Vattikuti. “I believe that the highest challenge in the sourcing industry is the availability and retention of talent,” he explains. “CSC provides prospects and employees opportunities at the global level and offers them more challenges, bringing to the surface more innovation from their resources. This is also one of the paramount reasons we chose CSC as our preferred acquisition partner.”

Beth Mallino is a senior writer for CSC's corporate office.