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iGATE Corporation, formerly named iGATE Capital Corporation, founded in 1996 in Fremont, California with operational headquarters in Pittsburgh, Pennsylvania is a leading and fast growing firm in the Information Technology field.
The objective of this report is to analyse iGATE's managing strategy and its competitive environment using strategic analysis techniques.
2. iGATE - IN BRIEF
The principal strategy of iGATE is to provide offshore-based Integrated Technology and Operations ("iTOPS") solutions which integrate IT outsourcing and IT enabled operations and services in an integrated offering and also to provide conventional IT and business process outsourcing services to their clients in various industries.
iGATE's service offerings are in Information Technology and Information Technology supported operation's outsourcing solutions. iGATE globally markets its services to medium-sized and large organizations.
The service offerings are
Client/server design and development
Applications maintenance outsourcing
Enterprise Resource Planning package implementation and integration
2.1. GLOBAL FOOT PRINT
iGATE with its global headquarters at Pittsburgh, located in United States, has its branches in 16 countries which are stated bellow.
United States of America
iGATE has major development centres and regional offices in the following four Indian cities with Bangalore as its Indian headquarters.
2.2. iGATE - VISION
"To enable the transformation of businesses into virtual enterprises"
iGATE's vision states that it doesn't just want to be simply a normal Information Technology firm. Instead it wants to be a dynamic firm that transform the way the world does business.
2.3. iGATE - MISSION
"1-10-100 by the year 2012"
iGATE's mission is to achieve $ 1 billion, to be one of the top 10 best Indian employer and to work with 100 of Fortune 1000 customers by the year 2012.
2.4. iGATE - VALUES
The values of iGATE are defined in one word PRIDE, i.e. Passion, Respect, Innovation, Denizen and Excellence.
The term Passion is used to denote the belief in what they are doing and enjoying what they are doing. This denotes the Passion for work, which drives individual team and organizational success.
Respect denotes the way of treating the people with dignity and courtesy. Respect also denotes the acknowledgement of changes in the workplace and welcoming it. At iGATE, they work to maintain a non-threatening work culture.
Innovation stands for finding new things in a new way. According to iGATE, Innovation means attempting risks rather than avoiding the new ways of finding new things. At iGATE, they encourage people to make continuous improvement.
Denizen is an inhabitant of a place or a citizen. iGATE shows keen interest in social responsibility. iGATE proves this in action by supporting many educational and rural development initiatives.
Excellence denotes their work excellence by providing good quality products to customers. Delivering a best product in the very first time is the style followed at iGATE.
2.5. THE iGATE MILESTONES
The iGATE Capital Corporation (former name) completed successful Initial Public Offering
Successful Secondary Stock Offering was made
Announcement of two-for-one stock split
Ranked - 2nd in the Forbes Magazine's list of "The Best Small Companies in America"
Mascot Systems Limited, India was formed as the offshore development centre of the Company
iGATE Capital Corporation changed its name to iGATE Corporation
Mascot name was changed to iGATE Global Solutions Limited (iGS)
iGS acquired Quintant Limited, a business services provider
Regroups all the entities under two Strategic Business Units - iGATE Global Services and iGATE Professional Services
Introduced iTOPS: (integrated IT and operations business model) that offers optimal approach to deliver value to the clients
Infrastructure enhanced with creation of new India Corporate Office on a 14 acre, 100,000 sq.ft. campus at Bangalore, India
Marks the 10th Anniversary as a Public Company
Among Top 3 Best Employers in the Survey in India in the 7th Annual Dataquest-IDC Survey - 2007
Phaneesh Murthy was appointed as the Chief Executive Officer of the Company
Delisting of iGATE Global Service in India
Divested its Professional Services Business
Opened operations in Mexico
Achieved Highest CMMI Rating
Ranked 1st in DQ-IDC Top 20 Best IT Employers in India Survey
No1 rank in Data mining, Data warehousing & Business Intelligence in the Annual Black Book of Outsourcing User Survey
Declared First Annual Dividend
Ranked 14th in The Black Book of Outsourcing's prestigious 2009 "50 Best Managed Global Outsourcing Vendors" list
Ranked 2nd in DQ-IDC Top 20 Best IT Employers in India Survey
iGATE claims their employees (iGATORs) as a bold new variety of professionals with enthusiasm and sparkle in their work environment. With a present strength of 6910 employees, the key elements of iGATE culture are;
Fostering team work
Recognition of innovation
Nurturing of individual talent
Beyond the regular corporate activities, iGATE has a team called iCARE with all iGATORs as its member. Apart from the regular corporate activities, iCARE focuses on public welfare projects like renovation, computer training to village students, child education.
iGATE also focuses on its responsibility towards environment and is committed to green revolution in order to conserve the environment.
An organizational approach called iGATE Business Efficient Eco System (iBEES) was made in 2004 which was committed to minimizing impact on the environment.
The objectives of iBEES are:
Eco-friendly atmosphere at the campuses
Makes the environment a better place to live and work in
Initiates actions based on business needs taking into consideration the environmental factors
Reduces carbon footprints
Stresses on the reduce/recover-reuse-recycle (3R)
Provides conservation of energy resources
Reduces the use of energy at various places such as facilities, data centres, etc
Provides e-waste management
2.9. iGATE - STRATEGIC MANAGEMENT
iGATE have a good business management system which is designed with focus on business needs, market and customer requirements, and employee needs. They have implemented a well defined process in all the key areas like leadership and strategic planning, customer management, workforce management, knowledge management, finance management, sales and marketing management, infrastructure management and delivery management.
iGATE Business Management System
iGATE has a well defined process for planning and deploying their strategy. Every year they have an annual goal setting and planning session. Their strategic alignment uses a balanced scorecard based approach to define their goals for various functions and for individuals. From their strategic alignment we can see that the goal, flow down to every iGATOR and alignment with project, delivery unit, business unit and organizational goals are ensured.
Though iGATE has a numerous number of competitors, the main competitors in local, national and international market are the four bellow mentioned firms.
COGNIZANT TECHNOLOGY SOLUTIONS
TATA CUNSULTANCY SERVICES
COGNIZANT TECHNOLOGY SOLUTIONS
TATA CUNSULTANCY SERVICES
2.11. iGATE - CUSTOMER SATISFACTION SCORE
Still being a small firm with lesser employees, assets and revenue, compared to the four main competitors, iGATE manages to acquire more number of clients and it shows a good customer satisfaction record.
2.12. FINANCIAL METRICS
The following table shows the financial status of iGATE from 2005 to 2009.
From the above table, we note iGATE shows a constant increase in their net income. Even though the revenue in 2009 is comparably lower than the previous year, it is due to the economic crisis in United States and iGATE still managed to maintain fair revenue in the crisis period while there was a vast decrease in the revenues of their competitor as a result of the economic down turn.
2.13. iGATE - 2009 AWARDS
The bellow mentioned awards won by iGATE in 2009, also shows iGATE's growth and ability to compete with their competitors.
1st in the Media and Entertainment, Black Book of Outsourcing - 2009
4th in the Mortgage Securitization under Mortgage BPO, Black Book of Outsourcing - 2009
6th in the Top Tier ITO in the Insurance Industry, Black Book of Outsourcing - 2009
7th in the Credit Banking Business Process Outsourcing, Black Book of Outsourcing - 2009
14th in the Top 50 Best Managed Global Outsourcing Vendor, Black Book of Outsourcing - 2009
Global Outsourcing 100, International Association of Outsourcing Professionals - 2009
Best 20 Leaders in Canada, The International Association of Outsourcing Professionals - 2009
Best 20 Leaders catering to the Insurance Industry, International Association of Outsourcing Professionals - 2009
Top 20 IT Companies serving the Discrete Manufacturing Industry, International Association of Outsourcing Professionals - 2009
Listed Global Services 100, Global Services Magazine in - 2009
Assessed at PCMM Level 3
Performance Excellence Trophy in the Service Category, IMC Ramkrishna Bajaj National Quality Award - 2009
1st in the Excellence in Practice Award in the Career Development Category 2010, American Society for Training & Development
2nd in the Dataquest-IDC's annual survey of the Top twenty Best IT Employers in India
Annual Report Awards
American Communications Professionals LLC:
Bronze Awards Overall Category - Technology - IT Services - Annual Revenue $ 100 - $ 1 Billion
Bronze Awards Best Agency (Partnership of iGATE and O&M) - Asia Pacific Region
Excellence in Annual Reports, 23rd ARC Award conducted by Mercomm, Inc.:
Honors: Interior Design: Computers: Software
Silver: On-line Annual Report: Computers: Software
3. STRATEGIC ANALYSIS
Johnson, G. & Scholes, K. (1999) states, "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations."
Ansoff, I. & Mc Donnell, E. (1990) states, "Strategic management is a systematic approach for managing strategic change, which consists of the following:
1. Positioning of the firm through strategy and capability planning
2. Real-time strategic response through issue management
3. Systematic management of resistance during strategic implementation"
Strategic analysis can be defined as the process of conducting study on the business environment of an organisation. The strategic analysis process uses a number of tools, out of which PEST and SWOT analysis are used here.
3.1. PEST ANALYSIS
PEST - Political, Economical, Social and Technological.
John Williams. & Tony Curtis. (2006) states, "The PEST analysis headings are a framework for reviewing a situation, and can be used to review a strategy or position, direction of a company, a marketing proposition, or an idea"
The globalisation policies in many countries paved the way for many companies to invest in foreign markets. Even though globalisation policies helped iGATE to invest in many countries, it eventually increased the number of competitors in that field.
The enacted legislation by some U.S. states which restricted government agencies from outsourcing their Information Technology solutions and back office processes to the companies outside U.S. is also a threat. This may some time extended such that the private U.S. companies, some of which are iGATE's clients may also be restricted to outsource their works related to government. If this policy was made, then iGATE may face adverse impact.
The politics in many countries are very instable which eventually affects the markets of iGATE. It is very essential that for a firm to be successful, it has to adapt to the changing policies made by the local government and should find way to overcome those issues.
iGATE's majority revenue comes from the clients in U.S. The economic activities in U.S. decreased due to the current economic downturn. This made a great impact in the major economies of the world where iGATE have their business.
The economic downturn progress may force the companies to reduce their information technology outsourcing budgets.
Since iGATE's business depends upon overall demand for IT and the economic health of their clients, the week economic conditions and reduced outsourcing budgets will affect their demand and eventually result in reduced revenue.
IT and offshore outsourcing services companies are highly competitive and they are served by many global, regional and local companies.
Many of the competitors of iGATE have greater financial, marketing and technical resources and greater name recognition than iGATE.
There is a threat from client side that they may choose those companies with greater resource and reputation.
Salaries and related benefits constitute a major portion of total cost. Most of iGATE's employees are based in India and wage costs in India have been significantly lower than wage costs in United States and Europe for skilled professionals, and this was one of iGATE's competitive advantages.
The rapid technological change, new product introduction, evolving industry standards and changing client preferences characterises the IT and offshore outsourcing services industries. In these modern technology era, for every second there is some development in every field and that too in IT field, the technological development is very rapid. To withstand in this rapid growing field, updation and adaptability to change of technology is very important.
iGATE clearly focus on this and it has a very good infrastructure and it updates the technologies used in their business. IGATE's iTOPS model is a clear evident that it concentrates on these technological impacts and is already in track of this rapid growing field.
3.2. SWOT ANALYSIS
SWOT - Strengths, Weaknesses, Opportunities and Threats.
Ron Basu. (2004) states, "A SWOT (strengths, weaknesses, opportunities and threats) is a tool for analysing an organization's competitive position in relation to its competitors"
Highly skilled and experienced management.
Quality of work and customer satisfaction.
Global R&D facility.
Well trained work force.
Retention of the man-power is best in the industry.
Impressive list of clientele.
High dependence on the U.S based clients.
Low operating margin of the other group companies.
Free floating stock is very less.
Employee salaries in IT sector are increasing high.
Many firms across the globe are adopting outsourcing at an increased pace. This increases the opportunities of getting more new clients, which are yet to adopt outsourcing.
In the branded product category.
In the consultancy area.
In the emerging technology areas like Blue Tooth, WAP etc.
Increasing cost of human capital.
Slowdown in the U.S economy.
Fierce competition from competitors with greater reputation and financial strength.
Unstable and unpredictable market price of shares.
iGATE Corporation, as I started to analyse, I was able to understand the hard work of iGATORs to make it one of the leading organization in today's competitive Information Technology field. Even though there were ups and downs in the organization's growth, they with their strategic planning and management strived hard and even managed to be in the competitive environment even in the period of global economic down turn. They still have to focus on the internal and external factors which contribute to the weakness and threats so as to overcome it and to achieve their mission.