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Kanbay & Partners
Pradeep Shankar
Tuesday, July 1, 2003
IN 1989, WHEN RAYMOND SPENCER, DILEEP NATH AND John Patterson mulled over what could distinguish their nascent company from being “just another IT consulting company,” the concept of relationships emerged as a strong contender. The future of Kanbay would, first and foremost, hinge on the relationships that it could forge with clients. Eventually—the trio figured—when costs and deliverables battened down to basics, relationships would help them compete.

As it turned out, Kanbay did develop strong relationships with many Fortune 500 companies. One such partnership is with a Fortune 500 financial services corporation. Eleven years ago, they assigned Kanbay a project for staff augmentation to service its consumer lending business. Today, Kanbay has dedicated a team of more than 500 associates who work with all of their business units across credit cards, insurance and consumer lending.

“We provided good quality people and showed tremendous commitment,” says Cyprian D’Souza, CEO, Kanbay India. Within a couple of years, Kanbay was able to convince the client to outsource some of its work to India. It wasn’t easy. The client were concerned with security issues, on-time delivery and quality of project work. Also, Kanbay did not have an offshore facility in India, although it partnered with an Indian company.

“They had great confidence in us and ultimately agreed to our strategy to leverage the vast expertise pool, time difference and cost advantage that India offers,” D’Souza recalls. Their experiment laid the foundation for Kanbay to open an offshore facility in Pune, India in 1995. Throughout the course of the 11-year partnership, this client substantially increased the number of projects awarded to Kanbay. Globally Kanbay has 1700 associates (employees) of which 1300 are located at the Pune facility, serving many Fortune 500 companies. The financial services corporation eventually became a strategic investor in Kanbay. “When someone like Household, Morgan Stanley or Safeguard Scientifics invests with us, it gives us powerful and credible brand identity in the market place,” says D’Souza.

Not Just a Peripheral Vendor
Kanbay’s strategy with other customers is similar—it believes in long-term relationship with its clients. “We invest money, time and people in building partnerships by working with the leadership of each client organization. We make every attempt to understand our clients’ business so that we can provide solutions that go beyond just application development, but that directly address their core business needs,” D’Souza explains.

Aside from client service aimed at generating measurable business value, Kanbay’s -portfolio of insurance, credit card, retail banking, and securities solutions are what essentially differentiate it from other services companies. “Our strategy is to be the proven resources for the financial services industry. We work closely with our clients to apply high-value solutions that continuously deliver results to increase their business performance,” D’Souza adds.

Kanbay believes in offering its clients value per deliverable—rather than per hour—cost. “The project cost quoted by our competitor might be cheaper, but in the end, what really matters is the value of the deliverable,” D’Souza claims. “The quality of our people and the processes we’ve established actually reduce the defects, rework, and enhancements otherwise required after the solution is implemented. Our clients actually end up spending less money in the long run,” he says. D’Souza attests that Kanbay’s value-per-deliverable model has helped the company beat the most formidable competition. “Recently, Kanbay and one other competitor were executing projects for the same client. Barely two weeks later, the client decided to award us the other contract as well, because we provided better quality of people and greater value per deliverable,” he recalls.

Apart from pricing, Kanbay’s three-tier delivery model keeps the company focused on each client’s business needs. Its delivery model is a hybrid of the top five service providers and the top five Indian service providers, ensuring that Kanbay provides value to its clients at the local, regional and offshore levels. “Three to four years ago, clients were hesitant to send non-mainframe work offshore. They believed ‘open system projects’ couldn’t be executed in an offshore environment,” notes D’Souza. Today, the company does a substantial amount of work on open systems at its Pune facility.

A Step in a New Direction
Growth at Kanbay has never lost steam. Recently, introduced a new Managed Solutions practice for providing application management outsourcing (AMO) and business process outsourcing (BPO) solutions designed to increase performance for companies in the financial services industry. The company also plans to expand its India operations. With additional offices in Australia, the U.K, Hong Kong, Japan, and Singapore, Kanbay has all the necessary ingredients for customer success: deep vertical financial services expertise plus a strong focus on client’s return on investment, performance management and risk management. With $83 million in revenues last year, 85 percent of which came from U.S clients, the founders’ relationship-based business strategy seems to be paying off.

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