In the late 1980s, four entrepreneurs were working for the Institute of Cultural Affairs, a nonprofit community development organisation, in the western Indian state of Maharashtra.
"We spent time at our non-profit working at the community, village level," said Cyprian D'Souza. While working in development and education programs, D'Souza and his pals Raymond Spencer of Australia, Canadian John Patterson and Dileep Nath, who, like D'Souza is from India, noticed a lot of the local people they came in contact with had a natural affinity for working in technology. "We realised the demand for IT professionals in the US was growing and said, 'why not connect the two'?" said D'Souza.
The result was the founding of a Chicago-based company called Kanbay by Spencer, Patterson and Nath in 1989. D'Souza came on board a few years later. Fast-forward to the present: last week, Capgemini, the biggest technology consultancy in Europe decided to expand its footprint in India by offering $1.25 billion for Kanbay.
Kanbay is headquartered in Chicago, where Spencer lived when the company was established. But despite the US mailing address, 5,000 of the company's 7,000 employees work in software development centres in Hyderabad, Pune and Chennai. The acquisition of Kanbay by the Paris-based Capgemini is expected to add 23,000 jobs in India by 2010, mostly new positions but some relocated from higher-cost areas.
Slideshows:
The world's largest companies
The pros and cons of outsourcing in India
Kanbay's clients include businesses in financial services, consumer and industrial products and the communications industry. The company provides management consulting, technology integration, and maintenance and outsourcing services.
Paul Hermelin, Capgemini's chief executive officer, said in a statement that the acquisition of Kanbay "supports our growth strategy and significantly enhances our global banking, financial services and insurance practice, particularly in North America and India."
Capgemini, which saw losses between 2002 and 2004 following the tech downturn and the rise of outsourcing, recovered through a restructuring that included sending jobs to India and China. The company posted a $181 million profit in 2005. Earlier this year, Capgemini said it was acquiring a 51 per cent stake in the BPO Unilever India Shared Services, a subsidiary of Hindustan Lever.
Slideshows:
Top ten hottest jobs in India
Top ten hottest jobs in the World
The French company said it would increase its employee presence in India by 89 per cent with the Kanbay acquisition. Capgemini has around 60,000 employees globally and more than 5,000 in India.
Atul Phull, marketing head of Kanbay India, estimates it costs the firm about one-fifth the amount it would in the United States to employ tech services people in India. "But you can't even find some of these people in the US, and that's one of India's greatest strengths, that we have a pool of highly skilled talent," says Phull.
Kanbay also prides itself on an operating model that doesn't treat India as a back office for US companies, and has been hiring people at equally senior positions in India as in America, says D'Souza.
As a global firm, D'Souza says one of the challenges is ensuring that people from different countries and backgrounds don't take Kanbay's culture in a host of different directions. "Creating a consistent global culture is the key to providing consistent client and associate experience. It's how we retain contracts and keep associates," he says. "Associates" is the warm and fuzzy term Kanbay uses to describe its employees. It remains to be seen if the company's culture will be rerouted by its new Gallic owners.
Slideshow: Emerging global cities