The company was incorporated on 10 August 1992 and was promoted by Shreeniwas Bangur, Shreekant Bangur, Suraj Ratan Rathi, Partha Sarathi, Dutta Roy and V. K. Rungta. In 1993, the company issued 700 equity shares of `10 each which were fully subscribed and paid up. The company subsequently issued at par another 60 lakh shares of `10 each in July 1992, of which 1,500,000 shares were reserved and allotted to Indian directors, their friends and relatives. Of the remaining, 450,000 shares were offered to Indian mutual funds (none were taken up). The remaining 4,050,000 shares were issued to the public along with the 450,000 shares not taken up by Indian mutual funds.
By 1995, the company had more than 100 projects under execution and it was classified under six technology focus groups, namely, System Software, Client Server Technology, Networking Technology, Tandem Technology, Reengineering Group and Emerging Technologies. In 1998, an international investment bank entered into an agreement with BFL Software (BFL) on 26 March for acquiring 1,504,800 shares (amounting to about 25.15 per cent of the company’s equity).
In 2000, the company changed its name to MphasiS BFL and reorganized its operations. During the same year, Richard Braddock and Jose de la Torre were appointed as Additional Directors of the company. Holdings Ltd had acquired 6,500,000 shares of BFL Software Ltd aggregating 41.02 per cent. Rahul Bhasin, Chairman, resigned on 14 July 2000, and K. Sridharan was appointed as Director.
MphasiS, a software architecture, integration and implementation company, had tied up with BEA System to build financial solutions on the BEA E-Commerce Transaction Plantform that aims at capturing a huge market in the financial sector in India and abroad. Idea2solutions (I2s), an incubator focused on healthcare-technology start-ups entered into an alliance with MphasiS. During the same year, the company appointed Ravi Ramu as Director—strategic initiatives. Ramu’s enriching experience and expertise reinforced MphasiS’ strong management team globally. Jerry Rao, Chairman—MphasiS BFL, was appointed to Nasscom’s Executive Council in 2002.
MphasiS BFL secured the top slot in credit rating amidst 400 major companies during 2002–03. The company won the SecureSynergy Security Strategist 2005 award. During 2005 itself, the company acquired Princeton Consulting and set up a BPO facility in Noida. In 2006, MphasiS BFL Ltd informed that the name of the company had been changed to MphasiS Ltd with effect from 24 November 2006, which was approved by the Registrar of Companies, Karnataka. Subsequently, a number of prominent professionals in the field were appointed as Additional Director(s) on the Board of the company
MphasiS Ltd (then, MphasiS BFL Ltd) was formed in June 2000 after the merger of the US-based IT consulting company MphasiS Corporation (founded in 1998) and the Indian IT services company BFL Software Limited (founded in 1993). The company was founded by Jerry Rao and Jeroen Tas, former Citibank employees. Starting out as a BPO and application services outsourcer in the BFSI segment, it subsequently moved into the telecom and health industries as well.
The company’s global character was evident from an Indian CEO, a Dutch president and more than a dozen subsidiaries in Europe, the United States and Asia. Its global operations got further expanded and enhanced by its acquisition-cum-alliance-based strategy, making it among the top software exporters of the country within a couple of years of its coming into existence. It was acquired by software services firm EDS in 2006, which in turn was acquired by HP in 2008.
MphasiS is a unit of Hewlett-Packard Co and is the sixth largest IT company in India with more than 38,000 employees as of 2010. The company has 29 offices in 14 countries with delivery centres in India, Sri Lanka, China, North America and Europe.
MphasiS BPO, provides high-quality, value-added voice and transaction-based Contact Centre and Business Process Outsourcing (BPO) services to Fortune 500 companies worldwide. It has expertise to customize onshore, near-shore and offshore solutions. The company offers not only a differentiated service to its clients but also value enhancement to these offerings. It is a leader in providing end-to-end Business Process Outsourcing services and provides high-quality, valueadded voice and transaction-based services to Fortune 500 companies worldwide. It has an inbuilt advantage of having entered the BPO space in the early stages of the growth of the sector, which has enabled it to develop expertise and provide solutions and services to complex business issues and achieve results.
The company’s growth strategy of acquisitions with alliances has worked well in enhancing its global character and orientation. MphasiS clients typically work with complex, highly distributed IT infrastructures that gives them an added advantage. The real challenge lies in identifying the source of problems in distributed IT infrastructures, which is an uncertain and time-consuming process because it is done without having a unified view of all the components. Through this partnership, MphasiS is forming a ‘center of excellence’ to apply Integrien Alive to solve related business problems. MphasiS’ Corporate Governance focuses on the enhancement of shareholder value, keeping in mind the interests of other stakeholders, namely, clients, employees, investors and regulatory bodies. The role and functions of the Board of Directors of the Company are well defined. The company has taken various steps, including setting up various sub-committees of the Board to oversee the functions of the management. MphasiS is committed in its philosophy to good corporate governance practices and has benchmarked its practices against best global practices.1
1. What has been the reason for the success of MphasiS?
2. What has been the strategy of the company to build a team to have global operations and character?
3. ‘Venture team development, as a company expands and grows within the country and outside the country, requires a distinct emphasis on corporate governance policies.’ Comment critically on the steps that MphasiS took in this direction?