Mastek arm forms JV with US firm
By siliconindia   |   Monday, 05 May 2003, 19:30 IST
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DALLAS: Majesco Software Inc., a subsidiary of Mastek Limited (NSE:MASTEK), a global outsourcing company and Carreker Corporation (Nasdaq:CANIE), a provider of technology and consulting solutions for the financial industry, Monday announced the formation of a new company, Carretek LLC. The new entity will enable financial institutions and their processors to realize the benefits of business processing outsourcing (BPO) and offshore IT: cost savings, productivity and quality. Carreker owns 51 percent of Carretek; Majesco owns 49 percent. Carretek will initially focus on payments-related business processes and IT services such as custom software development and application management. Within this area of expertise, the Carretek offering will include a flexible array of offshore outsourcing services like global sourcing strategy development services (consulting, methodology, and tools) to help banks understand their offshore outsourcing opportunity and optimal decisions, outsourcing of selected payment processes to India through a range of business models to suit different banks’ needs and aApplication development and support Carretek will draw on Carreker’s expertise in payments systems and associated business processes to help banks rationalize the business case for transitioning some of these processes to cost-efficient offshore locations and improving banks’ return on investments in payments technologies. Carreker’s image-related technologies, already in place at many large U.S. banks, will enable such transitioning and leverage the banks’ previous investment in these systems. By outsourcing selected processes to state-of-the-art facilities in Mumbai, India, Carretek expects to reduce banks’ net costs for outsourced payment processes by 35 to 40 percent, in addition to improving the productivity and quality of the processes. Subhash Mukerji, President of Carretek and Managing Director of Carreker Corporation, said, "Our offerings are not intended to compete with onshore outsourcers, but to assist those who seek the benefits of offshoring and need a partner who understands financial services operations and can help them access global offshore resources. Our research shows that U.S. banks, facing a decline in check volumes, will need to reduce related costs by $1.85 billion over the next four years just to maintain current per item costs. To achieve this level of savings, they must consider offshore processing options and invest in the enabling technology, initially for the savings but ultimately to streamline and improve these processes." He added, "We found that Mastek shares our values, particularly in their full commitment to client satisfaction, which has enabled them to compile an enviable track record in quality offshore services to financial institutions and FORTUNE 500 companies, supported by excellent IT credentials." Ketan Mehta, member of the Mastek Board in charge of strategic alliances, said, "Through Carretek, we aim to do for banks’ back offices and IT departments what Mastek has independently been doing for FORTUNE 500 companies for more than 20 years: offering them a cheaper, faster, and higher quality development, management and support option for some of their IT applications, in an entirely transparent, low-risk environment. As in the past, we expect to be successful because our reputation as an employer and the relative economics of the geographies in which we operate give us access to a large pool of highly skilled, highly motivated, highly rewarded employees who nevertheless earn a fraction of what U.S. banks currently pay for equivalent levels of skill and productivity." Atul Vohra, President of Majesco Software, Mastek’s wholly owned U.S. subsidiary said, "There’s a qualitative difference between outsourcing applications development and outsourcing business processes, such as payments. For the latter, it is critical to have deep content knowledge in the processes being transitioned so that the outsourcer can continuously transform and improve the processes in line with changing market conditions. We chose Carreker as our partner because of their expertise, and because they have a market leading position in many of the technologies that permit payment processing work to be performed offshore while reducing the cost of mitigating fraud and the incidence of fraud itself. This all adds up to significant value for our banking clients." Ashank Desai, Chairman and Managing Director, Mastek Limited, said, "The association with Carreker is in line with our strategy to focus on the banking sector, which is one of the heaviest users of IT and BPO. This venture also reinforces our belief in win-win approaches to alliances. Mastek’s best-in-class BPO offshore capability and expertise in IT offshore outsourcing along with Carreker’s domain expertise in the banking sector will provide unique leverage to Carretek’s customers." J. D. (Denny) Carreker, Chairman and CEO, Carreker Corporation, said, "Carretek is a key business in our strategy to be the premier provider of payments solutions to financial institutions. Our offering is timely. Over the next five years, the top 100 global financial institutions expect to offshore more than $356 billion of operating processes, capturing savings in the range of 39 percent, according to Deloitte Research. India is expected to get the lion’s share of this business." "As for our shareholders," Carreker added, "The offshore-centric BPO outsourcing model is in a rapid growth mode in a large market with no dominant player, where the deep expertise of our two companies will let us carve out a highly defensible position within our primary customer base. This model will also provide us with opportunities to leverage our strengths in targeted IT services areas. It provides for early revenue visibility, recurring revenues, and sustained cross-sell opportunities." Carreker also plans to leverage Carretek to expand production capacity of its critical software product development operations. John Carreker, President of Carreker’s Global Payments Technologies Division, said, "Carretek’s complimentary IT skills will enable us to quickly expand our capacity to meet growing customer demands for high-quality, personalized solutions and accelerated ROI timetables." The initial plan is to leverage Carretek’s IT skills on targeted software enhancement and custom development opportunities.

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