Daksh and Ibm: Business Process Transformation in India. Part 2 – the Post Buyout Years

Strategic Management

CASE ANALYSIS

DAKSH and IBM: Business Process Transformation in India.

Part 2 – The Post Buyout Years

Group A

Background

In 2004 the face of the global software industry was changing and IBM hoped to be at the forefront of this evolution. The market was being defined by customers who were looking for service providers who could help them change their operations, add value, and take up responsibility for managing many of their business processes. IBM's strategic initiative was to offer costumers an innovative service which combines process, people and technology into a network on demand ebusiness.

Through intergrading a full service outsourcing solution consisting of: consulting, Information Technology, and technological capabilities to its services, IBM would begin and lead the trend of Business Transformation Outsourcing (BTO). These solutions included human resources, finance and accounting, supply chain, risk management, logistics, and new product development.

Key Issues

IBM was on the crusade to acquire businesses that would help achieve its vision. IBM wanted to become a Business Transformation Outsourcing service provider (BTO), offering customers to manage their businesses from end to end. In order to achieve low cost BTO services, IBM acquired Daksh in 2004. At the time of the acquisition, Daksh specialized in Business Process Outsourcing services (BPO) in customer relationship management (CRM) and finance and administration (F&A). The company was doing very well financially and was growing.

Daksh provided low cost skilled work, but the array of services Daksh had to offer was too limited to meet IBM’s strategic goals. Daksh’s capabilities were not aligned with IBM’s strategy of BTO services. The purpose of a BPO service, what Daksh provided, was merely to save costs. A customer would leave a business function to be managed by Daksh, as long as they could...