Kanbay International Inc., an IT services firm focused on the financial services industry, plans to have development facilities in India that can accommodate up to 6,500 staff by the end of the first quarter next year, according to an executive of the company.
Kanbay currently employs about 3,800 staff at development centers in India, in Pune, Hyderabad, and Chennai, said Raymond Spencer, chairman and chief executive officer of Kanbay, in Rosemont, Illinois.
Spencer declined to say whether all of the 6,500 positions would be filled by early next year, but the facilities will be able to accommodate that many staff. The company will expand in India in proportion to its revenue growth, Spencer said in a telephone interview Friday.
Kanbay currently employs about 4,700 staff worldwide. It plans to retain the current mix of about 80 percent of its staff in India ” We see India as a center of excellence that is able to deliver very high value solutions at obviously very competitive prices,” Spencer said.
Although staff salaries are on the increase in India, Kanbay’s ability to offer more sophisticated services out of India, which command a more attractive price, has allowed the company to offset salary increases, Spencer said.
The bulk of the services offered from India are in the application area, while more of the high-level work, including some customer-facing functions, are getting done offshore from India.
Kanbay is also exploring the possibility of setting up new development centers outside India. The locations under consideration include China, Eastern Europe and Latin America, according to Spencer. The centers would support the global expansion of Kanbay’s business, said Spencer. “The ability to service, for example, the Latin American market would be enhanced by having a development center in Latin America,” he said.
Rather than have one large development center in any one of these locations, the company may consider having smaller ones in each, Spencer said.
At present, the company’s business is in English-speaking markets, but as business in the financial services sector grows in markets such as Latin America and China, greater competency in other languages may be needed, Spencer said.
Kanbay currently generates about 61 percent of its revenue from two of its largest investors, banking company HSBC Holdings PLC in London and investment bank Morgan Stanley & Co. Inc. in New York, according to Spencer. Together, HSBC and Morgan Stanley hold about 19 percent of Kanbay’s total equity.
In the second quarter ending June 30, Kanbay reported revenue of US$57 million, up by 27 percent from revenue for the same quarter last year, despite the sale of its products business. Revenue from third parties rose 41 percent year-over-year to $21.7 million.
“We have stated our intent to build up our third party revenue, and we are doing it both from more business from current customers, and from business from new customers,” Spencer said. The company is not greatly concerned that more than 60 percent of its revenue comes from only two customers, he said.