Indian outsourcing company Tech Mahindra has made its first big move into SA through a partnership with empowered company Falcorp Technologies, and aims to spend as much as R10 million on training in its first year.
Tech Mahindra SA will target the telecoms and media sectors. Girish Bhat, VP of sales and operations for Middle East and Africa, says although the two companies have had a working partnership for the past two to three years, this is its first big step into SA and has led to the creation of Tech Mahindra SA.
Falcorp MD Rikash Hurdeen will head up the partnership. Bhat says Tech Mahindra SA aims to initially hire about 25 people, including 10 graduates who will be trained, with the goal of having 350 staff within the next three years.
Falcorp is an empowered technology services company that currently has 70 staff.
Bhat explains that the 50/50 partnership will see Tech Mahindra's telecoms systems integrated skills brought to SA, while Falcorp adds local expertise and understanding. The company will be a level three empowered company, with a minimum 30% black ownership, in line with the ICT sector codes.
Skills development
Within three years, the partnership should be turning over about $30 million a year, says Bhat. He adds that growth areas include security, cloud, analytics and enterprise mobility.
Tech Mahindra SA will offer graduates about four months' of hands-on training in India. Based on previous experience, this is expected to cost about $225 000 per person, says Bhat. He adds that the company envisages spending between R8 million and R10 million on training in its first year.
Tech Mahindra, which is present in 15 countries on the continent, is majority owned by Indian conglomerate Mahindra & Mahindra. It serves telecoms service providers, equipment manufacturers, software vendors and systems integrators.
Milestone
Bhat says SA could become a regional hub for the Indian company, and the partnership could be the first step towards a bigger presence in the country.
"Establishing a local entity is a significant milestone for us in southern Africa. As the whole region moves towards recovering from the impact left by the recent economic downturn, local telecoms providers have demonstrated a key shift in their IT spending practices."
A top-level merger between Tech Mahindra and Mahindra Satyam is also in the works, and should be wrapped up within the next six to eight months before filtering down to country level, says Bhat. He says this will provide more collaboration opportunities.
Mahindra Satyam has operations in 20 African countries, from which it serves 52 countries and has announced plans to double its local business organically.
It was rocked by a scandal several years ago, after founder and chairman Ramalinga Raju resigned and revealed, in his resignation letter, that the company had been inflating figures by up to $1 billion for years. In mid-2009, Satyam became part of the $15.9 billion Mahindra Group.
Tech Mahindra and Mahindra Satyam together employ close to 300 associates in SA.
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