KPIT CUMMINS INFOSYSTEMS LIMITED Company Background KPIT Cummins Infosystems Limited (KPCIL) was established in 1990. It is one of the leading Indian consulting and IT solutions and service providers in the US.The company offers integrated solutions to clients in manufacturing and diversified financial services domains. It has developed different linesof-business (LOBs) to cater to the requirement of its clients in an efficient manner. Following are the company s different LOBs: Automotive Electronics: This LOB is a key focus area for the company. KPIT provides advance technology solutions and high-end specialised services for the automobile industry. It has strong domain expertise across almost all automobile subsystems.this LOB caters to the requirements of the top OEMs,Tier-I and Tier-II vendors in the automobile industry. Semiconductor: This LOB provides services to the top semiconductor companies across the globe. It provides chip design, verification and testing services to its clients.the company has expertise in chips for the automobile industry. The company is among the leading Indian third-party solutions and services provider to automotive and semiconductor clients in the US. Business Intelligence: This is a new LOB for the company and was established after the acquisition of SolvCentral.com (USA).The company provides services in the data management segment. It also provides customised data analysis services, data modeling, data mart creation and deployment. Global Business Solutions: This is the BPO arm of KPIT. It provides transaction processing, financial services processing, accounting, HR processing and 69
provides technology-enabled services to its clients across the globe through its branches and global subsidiaries in the USA, the UK, France, Germany, the UAE and Japan. It also provides its services and solutions through extensive joint ventures and partnerships with various companies in Switzerland, Sweden, Australia, Qatar and Kuwait. 70 technology-based services (technical help desk solutions and knowledge-based solutions). Manufacturing: This LOB is a key focus vertical for the company. It contributes a major portion to the company's overall revenues. In addition to application development and maintenance services, this LBO provides a wide range of services such as IT strategy consulting, product life cycle management services, supply chain solutions and ERP implementation. Diversified Financial Services: This LOB is also a key focus area for the company. It provides application development and support solutions, migration solutions, credit cards, money transfer systems and other services to various clients in the finance domain. The company has a strategic partnership with Cummins (in the manufacturing/automotive domain) and Lehman Brothers (for financial services). Global Footprint of KPIT Cummins Infosystems Ltd. KPIT Cummins has a presence spread across the globe.the company is headquartered in Pune (India) and has development centers in Bangalore (India) and Wroc_aw (Poland).The company The company has strong relations with its clients across different geographies. It provides latest international technology quality solutions to its clients across the globe. It has quality certifications such as CMMI Level 5, ISO 9001:2000 and BS7799 which enable it to provide standardised services to all its clients.the certifications have assisted the company to improve its process and deliver quality services and solutions. The company generated consolidated revenues of US$ 72.93 million in FY 2005-06. It has recorded a CAGR of 66 per cent over the past three years.the company has generated US$ 26 million in revenues in the quarter ending December 31, 2006. It had 3,119 employees as on December 31, 2006, employed across various geographic locations.the US region contributes approximately 62 per cent and Europe approximately 29 per cent to its global revenues. KPIT Cummins Infosystems Ltd. in the United States of America Mode of Operation KPIT Cummins operates in the USA through its subsidiaries, Panex KPIT, SolvCentral.com Inc. and CG Smith Software. Overview KPIT Cummins operates in the USA through its various acquired subsidiaries in the US market. KPIT Cummins established KPIT Infosystems Inc. in 1998 in New Jersey (USA) as a holding company for the American market.
Currently, the company provides high-quality, reliable and cost-effective solutions and services to its clients.the group has been actively involved in developing strong relations with its clients.the company caters to the requirements of seven of the top-10 automotive OEMs in the automotive electronics domain. It also provided services to six of the top-20 global semiconductor companies.the company has premium membership of AUTOSAR and has obtained SPICE level-3 certification. The company's emphasis on leveraging its client relationship model has, and continues to assist it in delivering technology-enabled solutions. The company provides cost-effective, technologyenabled solutions by blending process efficiency of both offshore development centers and onsite locations. It employs close to 250 professionals and 40 contractors in the American market.the company caters to many clients in the USA such as Cummins, Daimler Chrysler Group, HP, Freescale, E*Trade, Business Objects, etc.the company generated US$ 33 million in revenues from the US region in the year ending December 31, 2005. Revenues of KPIT Cummins from the United States of America US$ million 70 62 60 50 48 40 33 30 21 20 13 10 0 2003 2004 2005 2006 2007 (E) Year Source: Company Annual Report and Primary Research PANEX KPIT Panex Consulting is a wholly-owned subsidiary of KPIT Cummins. It provides services across the world in a broad spectrum of domains from strategic management consulting to value-based solutions.the company has provided KPIT Cummins with SAP consulting capabilities. PANEX provides business planning and simulation module implementation of SAP, data warehousing, data analytics, supply chain management, ERP implementation, web-enabled services and product 71
automotive, aerospace, locomotive, medical/ scientific instruments and semiconductor segments. CG Smith has expertise in electronics for the automotive domain such as cluster and safety systems, body electronics, etc., which complement the present expertise of KPIT Cummins. CG Smith provides four business engagement models such as onsite consultancy, offshore project model, offshore development center and joint product development for its clients to develop quality solutions. Success Factors 72 lifecycle management services. It provides technology-enabled solutions to various industries such as manufacturing, oil and gas, pharmaceuticals, utilities, and consumer packed goods. SolvCentral.com Inc. KPIT Cummins has ventured into the business intelligence domain with the acquisition of the US-based SolvCentral.com Inc.The company has been acquired for a consideration of US$ 2 million. KPIT Cummins has an approximately 90 per cent stake in the company. SolvCentral is among the leading providers of business intelligence solutions. This LOB extends its expertise in data warehousing, enterprise analytical reporting and application server market.the company provides technology-enabled solutions in business objects such as dashboards, business intelligence monitoring and report distribution. It also assists its clients with version migration applications, which enables an error free transition. CG Smith Software CG Smith was established in 1994 and is among the leading providers of real-time and embedded software services and products in the world. KPIT Cummins has acquired CG Smith Software for a consideration of approximately US$ 8 million.this acquisition has facilitated the company in providing novel technology-enabled solutions in the Domain-Specific Expertise and Services KPIT Cummins has a high focus on the automotive and semiconductor domains. It provides domainspecific services to various clients in the manufacturing segment.the company has created a vast talent pool to develop technology-enabled solutions for its clients.the company continues to focus on building its domain knowledge and utilising it to deliver technology-enabled products and services.the use of technology has assisted the company in gaining business from its customers and creating a brand for itself. Strategic Acquisitions The company has gained presence in the American market through acquisitions. It has acquired three companies in the US and these have assisted it in gaining market entry in the US.The company has acquired SolvCentral.com Inc. to diversify its product offering in the business intelligence domain.the company has taken the inorganic route to venture into the US market as it has reduced the level of risk and helped it to earn a better return on investments. On-site-Off-shore Model The company provides a blend of off-shore, nearshore and onsite project execution.this strategy facilitates the company in providing technologyenabled solutions with proper back-end support
for its clients.this blended model assists the company in providing novel, reliable and costeffective solutions to its clients. It has also increased the process effectiveness of the company and with its large-scale operations (across the globe) the company is able to provide latest and innovative solutions to its clients. Cost Advantage KPIT Cummins provides cutting-edge technology solutions to its clients. It provides high-quality, reliable and cost-effective solutions to its global clients.the company is able to provide technologyenabled products and services in a cost-effective manner because of its well-established infrastructure, sales and marketing network, and business processes. It has also gained from adhering to international quality standards, which have improved process execution and removed bottlenecks, leading to an increase in business for the company. The company has undertaken an expansion strategy for its IT and BPO operations. It plans to grow its IT services through managed services and IT-enabled services. KPIT Cummins has identified finance and accounting, stock administration, mortgages/legal process outsourcing and risk management and compliance as target service areas.this will enable it to improve its business options and increase shareholder value. Further, it also plans to improve its operational optimisation so as to gain a competitive edge. Future Plans KPIT Cummins plans to increase its penetration in the business intelligence domain. Its acquisitions along with domain expertise will enable the company to gain a competitive advantage and more business.the company plans to market aggressively its solutions in the business intelligence domain. KPIT Cummins also plans to expand its range of products and service offerings in the automotive and semiconductor domains by developing innovative and cutting-edge technology products and services. It plans to leverage on its expertise in the manufacturing domain to generate business from the market.the company has plans to generate US$ 250 million in revenues by FY 2010 and aims at generating approximately US$ 150 million in revenues by FY 2010 from the American market. 73