Computer Sciences Corp (CSC), one of the world’s largest IT outsourcing companies with annual revenues of US$16bn, plans to quadruple its staff complement in SA in the next 18 months and generate between 10% and 15% of its revenue in Europe, the Middle East and Africa from the local office within the next three to five years.
Vivek Chopra, president for global applications at CSC, says the company is on a hiring spree, and intends taking on a large number of university and technikon graduates to support a rapid expansion of its presence in the country.
Strategic acquisitions of local IT outsourcing companies may also be on the cards, though Chopra says no active discussions are taking place at the moment. “We are very open to anything that makes strategic sense, but we won’t acquire just to get revenues.”
He says CSC is “lighting a fire” in SA’s IT outsourcing market.
The decision to focus on SA — and, in turn, sub-Saharan Africa — is part of a global CSC growth plan to expand its presence on the continent and in Latin America.
CSC, which first invested in SA in the late 1990s on the back of a big contract win from Old Mutual, is targeting the financial services, mining, telecommunications and transportation sectors and says it is close to signing a number of significant new deals.
The investment comes on the back of the conclusion of an empowerment deal that has seen Amabubesi Capital backed by Peter Moyo (the chairman of Vodacom) and Sango Ntsaluba, taking a 30% equity stake in CSC’s SA subsidiary.
CSC recently lost the Old Mutual account to T-Systems and Dimension Data in two separate deals. Peter Drube, MD of CSC in SA, says the company lost the account largely because it lacked strong enough empowerment credentials. He says the Amabubesi deal has changed that.
“The deal has clearly opened the market significantly for us,” Drube says, adding that CSC will raise its profile in the local IT outsourcing market substantially in the months ahead as it seeks to win market share from both local and multinational IT outsourcers operating here. Rivals include the likes of Didata, EOH, T-Systems, IBM and Business Connexion.
CSC, which has about 350 employees in SA, wants to expand this number to between 1 200 and 1 500 to support its growth plans. It has already begun hiring, and is working with the Gauteng Economic Development Agency to help it identify and recruit IT graduates.
Drube says CSC regards the financial services sector, especially banking, as perhaps its key growth area in SA. In this sector, companies have “huge investments” in legacy systems, some of them 30 or 40 years old and being maintained by an ageing workforce. CSC believes there is a big opportunity to help banks move to more modern systems, allowing them to develop “unique products” that can be rolled out more quickly to the market.
In an indication of how seriously CSC is taking the SA market, Chopra, who is based in the US, says he intends the visit the country at least quarterly for up to 10 days at a time to meet with customers and help grow the local office. “As we start building the brand, and getting people and processes in place, suddenly we’re finding customers are becoming aware and excited that CSC is coming to this market in a big way,” he says.
As part of the plan, CSC intends to establish a delivery centre in SA and seed the local market with skills from its international operations. Acquisitions are also possible. “We have the money on the balance sheet to do that,” Chopra says. “We need to make up for lost time, for some of the foundational things we should have done in the past and didn’t.”
Chopra is reluctant to peg a figure on how much the investment will cost CSC, but says the objective is to grow the company’s market share from the low single digits to contributing as much as 15% of its total revenue in Europe, the Middle East and Africa within three to five years. — Duncan McLeod, TechCentral
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