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Xansa builds India unit as outsourcing hub

British computer services firm Xansa on Wednesday announced construction of a Rs 270 million software development centre in southern India as a hub for its growing outsourcing business.

The Hertfordshire-based information technology consultancy, which serves clients such as banking group Barclays Plc, telecoms group BT Group Plc and supermarket chain Tesco Plc, said in January that its outsourcing orders were strengthening.

In an economic slowdown, many companies look to outsourcing their computer and technology functions as a way to cut costs. India is benefiting from this trend because it offers a supply of skilled computer technicians at lower salaries.

"India is going to be most critical in Xansa's delivery strategy worldwide and this new facility in Chennai will be a major hub and central to our plans," Saurabh Srivastava, the executive chairman at Xansa's Indian unit, said at a news conference.

Construction of the centre in Chennai began last month, and it is expected to be ready for occupation by 560 software consultants by March 2003.

Srivastava said the current investment in Madras was part of Xansa's strategic decision in 2001 to invest up to Rs 1.6 billion over three years to add infrastructure in the three Indian cities Pune, Chennai and Noida (near New Delhi).

"This combined investment, as part of our first phase, represents the single biggest investment overseas for Xansa to date and clearly shows the importance the company attaches to India in its growth plans," he said.

Xansa chief executive Hilary Cropper said in January that the order pipeline for outsourcing deals was the strongest the company had ever seen. She added she was "extremely bullish" for the future beyond 2002.

Srivastava said the Indian workforce, at about 1,200 engineers and consultants, was currently 20 per cent of Xansa's roughly 6,000 global employees.

He said the company expected staff at the Indian unit to increase to over 10,000 in the next five years.

"The company's order book at the end of the first six months at Rs 33 billion is very healthy, and given our outlook and our plans, we are designing this facility to have a capacity to house as many as 6,000 employees as we expand it.

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