Innovation and New Product Development Case Study

MphasiS: Grappling with New Challenges

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Abstract:
MphasiS BFL Ltd, a mid-tier ITES-BPO player with twin head offices, one in Bangalore and another in New York, is a pioneer in launching an integrated business model offering both IT and BPO services in 2001. Its initiatives to bag repeated business from clients by offering smarter, cheaper software for a process undertaken by them has helped in building a strong set of customers. But by mid 2005, the company seems to have entered a rough patch. The financial fraud involving its BPO employees has raised serious concerns about data security of clients. Barings, a key investor with 35.6% of shares also has plans to exit the company by December 2005. The case talks about the initiatives taken by Jerry Rao, the chairman and CEO of MphasiS to tide over the problems. With the backlash against outsourcing in the US, steps were taken to lessen client concentration and geographic risk by entering into Far East markets and focusing more on domestic businesses. But with the entry of global tech MNCs into the ITES-BPO sector the competition is proving tougher.

Pedagogical Objectives:

• To understand about the business model in MphasiS
• To discuss the effects of the steps taken by the CEO.

Keywords :  ITES - BPO industry; MphasiS; Jerry Rao; Barings India Investment Limited; Mergers and Acquisitions; Innovation Management Case Study; Off-shore billing rates; Niche positioning; Expansion plans of global tech MNCs; Integrated business model; Global platform based company; Transaction-based pricing model; Divestiture move by investors; NASSCOM; Informatiion security; Customer Satisfaction

Contents:

• Background note
• Genesis of MphasiS
• Testing Times
• Jerry Rao's initiatives
• The Road Ahead