The Innovation Machine

The Multi-year Deals
Having successfully completed Bharti Airtel outsourcing project for a period of three years, IBM has also been successful in signing up with Idea for a 10-year business transformation pact to integrate, innovate, and transform Idea's business processes and IT infrastructure. The pact is designed on an innovative risk-reward revenue sharing model and covers Idea's existing operations and potential new additions. The 10-year pact, depending upon Idea's business revenues and circle expansion, would vary from $600-800 mn.

*Revenue Growth (2006)**
Country	%age growth
Brazil	19
China	16
India	38
Russia	21
Total	21
*Excludes PC

This partnership will enable Idea to meet the needs of its 14 mn current subscribers and future growth; accelerate time-to-market of new services; leverage opportunities from the convergence; add new revenue streams; improve end-to-end customer management; and provide advanced revenue assurance capabilities for top and bottom line growth. In addition, IBM, will also take care of IVR self services. And, Bharti's learning will definitely help IBM to complete the first phase of transformation in record time.

IBM is also working with Vodafone worldwide to speed up the rollout of customer services. The company is also managing Vodafone's application development and maintenace services to help improve software capability. And, there are strong rumours of Hutchison Essar IT transformation project also going to IBM once the integration formalities are completed.

"Outsourcing in India is not offshoring as the drivers are different. And in India, the drivers are scale, explosive growth, flexibility in system and time to market," says Vivek Gupta, director, communications sector, IBM India/South Asia.

On the enterprise side too, IBM started to do wonders, as the focus was on innovation and multi-year business transformation deals. The IBM is focusing on six verticals -financial services, public, industrial, distribution, communications, and small and medium business. With Indian market booming, an increasing number of organizations started outsourcing non-core functions to improve competitiveness in the market. IBM was able to leverage the opportunity and win significant multi-million deals and multi-year deals. IBM has been effectively leveraging its global know-how across different sectors, combined with innovative technologies to boost its customer's business efficiency and performance. Apart from this, IBM Global Financing helps in providing flexible and attractive financing and leasing programs to fund IT requirements of enterprise customers. Some of the unique deals signed recently are CBDT, DIAL, DLF, FINO, and Apollo Hospital Group.

Innovative Deals in 2007

Central Board of Direct Taxes (CBDT): IBM signed a $45 mn, 5-year services agreement to modernize CBDT's (a nodal taxation body for government of India) IT infrastructure. The pact is designed on a unique public-private partnership model whereby IBM will make upfront investments, and will be paid over a period of five years for services rendered to CBDT.

IBM will offer integrated infrastructure solutions to CBDT's three data centers in Delhi, Mumbai, and Chennai, and facilities management services for 745 income tax department offices in 510 cities.

Delhi International Airport (DIAL): It has selected IBM to modernize key business processes to meet burgeoning air traffic in India. IGI Airport is one of the largest airports in India with over 20 mn passengers per year, and it is planned to expand to 37 mn passengers by 2010.

IBM will implement an enterprise resource planning (ERP) system at IGI Airport, which will integrate all data and processes of the organization into a unified system over a two-year period.

DLF: IBM India signed a 10-year contract to transform and manage DLFs IT infrastructure. With its $29 mn contract, DLF will leverage on IBM's infrastructure management expertise to secure a high quality information backbone, connecting more than twenty locations in India.

IBM will undertake security and disaster recovery planning and deploy a complete organization security framework and check security readiness for ISO 27000. Some of the solutions under consideration are advanced security management solutions like digital video surveillance, utilizing technology for land acquisition process, and other management systems. Its other focus areas would include IT solutions for building management and intelligent buildings.

Financial Information Network and Operations (FINO): IBM signed a deal with Financial Information Network and Operations (FINO), a technology solutions provider focusing on the micro-finance sector, to deploy and innovative end-to-end smart card solution for an urban microfinance institution (MFI) based in Bangalore.

The technology platform designed by FINO for MFIs comprises a core banking solution coupled with a distribution component and transaction acquisition system that is scalable and flexible to suit dynamic business needs. In addition to hosting the core banking solution, IBM will also provide support services for posting transactions and managing FINO's data center. FINO has proposed to offer this solution to over 200 entities involved in serving the micro-finance sector.

Apollo Hospital Group: IBM and Apollo Hospital Group have announced a joint go-to-market initiative to build a National Health Data Network called Health Hiway to provide a diverse set of software applications for the healthcare segment. The Health Hiway initiative will facilitate the rollout of hosted applications that are global best in class point solutions, with the objective of creating a basket of offerings that will create maximum impact on the hospital's clinical and financial performance.

IBM will offer its hardware, middleware, and services infrastructure, while Apollo Hospitals Group will offer its healthcare domain expertise. The wide range of applications on Health Hiway are of tremendous value to mid-sized hospitals, physician practices, pharmacy, and third party administrators who will benefit from the array of services with minimal investment. The focus will be on revenue management, hospital ERP, learning management, health insurance claims processing, and performance management including decision support and knowledge management.