Mid-tier IT company Mphasis plans to make its research arm Next Labs self-sustaining, by tying the labs under it with its delivery arm, to craft solutions as per the needs of clients.
The IT firm, which has been struggling over the past two years as revenues from its HP business have fallen, recently appointed former Cognizant executive Jai Ganesh to head the research arm. Ganesh's team is expected to work closely with the delivery arm lead by Gopinathan Padmanabhan, president-global delivery and HP channel sales.
"Next Labs will not work in isolation. This won't be research for the sake of research. They have already started working on a few problems that clients face in digital. The idea is for Labs to be self-sustaining by doing work for clients," Padmanabhan told ET.
He said that while the company will initially invest in the research arm as it builds up its headcount and facilities, the unit will pay for itself in due course, although the company has not set a time frame for this.
Indian IT companies have been looking to get better value out of their research. In March, Infosys reorganized its research division to better align it with the company's service lines and increase the synergy between the research that is done at the company's centres of excellence and the offerings taken to the clients.
Mphasis will focus its research arm on building solutions for the banking and insurance sectors besides governance and risk, business process outsourcing and infrastructure management.
"We have a small core team in place. There are mainly people with doctorates and experience. We are looking to recruit more, but Labs will never be a headcount heavy unit," said Jai Ganesh, vice-president and head of Mphasis Labs.
Ganesh added that the company is in the process of finalizing partnerships with universities in India, the US and Europe. Mid-sized IT firms such as Mphasis are betting on new digital solutions to give them an edge in the crowded IT services market, where their size, and sometimes lack of a differentiator, hurts their competitive advantage.