A rise in demand for customised supply chain management software has spurred US company i2 Technologies to increase the number of staff at its operation in India.
"What we are telling customers is that we have standard products, but we can mass-customise them and do a lot of implementation offsite in India," said Sanjiv Sidhu, chairman and chief executive officer of i2.
i2 already employs more than 1,000 staff in Bangalore, which is roughly about one-third of the company's staff worldwide. About 60% of i2's work in product development, customisation, implementation and tech support is done from India, and it is likely that it will go up to more than 70%, according to Sankalp Saxena, managing director of i2's operations in India.
"In the past five years, customers wanted to use packaged software exactly as delivered, and there was this concept that packaged software brings to you best-in-class processes, and you should use it as it is," said Sidhu.
"That learning holds good in some applications like financials where the process is very regulated. But this does not hold good for supply chain management. Even two grocery retailers can be very different in their requirements."
In some instances, the customisation would involve source code modifications, and some of these modifications would be included in future releases.
"Working with a large customer in a vertical sometimes enables us to offer a new feature set to that vertical," said Saxena. " Before we go in and tweak source code, we look at issues such as the industry re-applicability of the solution."
i2 is customising packaged software in India for a number of large clients including Royal Dutch/Shell Group of Companies in Europe, and Woolworths Limited in Sydney. The Indian operation is also working on the development of SCM software for the downstream oil business in tandem with Shell Global Solutions International in the Netherlands.
i2's strategy to move a larger proportion of its product development, customisation work and related services to India makes good business sense, according to Larry Lapide, vice president for SCM at AMR Research.
"i2 generally has always had a brains trust of highly educated thought leaders inside, many of them Indian nationals, leveraged by an aggressive sales force," said Lapide. "Many of the thought leaders have moved back to India to support this effort. So there is a good chance of success in this regard, at a much reduced cost structure."
In 2001, i2 moved about 200 people from its US operations to India.
i2 aims to shift implementation of its software from customer sites to its centre in India, Sidhu said.
The plan to move implementation offshore to India is feasible only for certain aspects of implementation, such as data conversions and clean up, business process coding and ensuring system modules interoperate, according to Lapide. "For business process definition, as well as for change management, you need someone on site," he added.
John Ribeiro writes for IDG news Service