BearingPoint starts center in India with Covansys help

BearingPoint, a McLean, Va.-based business consulting and systems integration firm, is setting up a global development center (GDC) in Chennai, India, in partnership with Covansys, a consulting and technology services company with headquarters in Michigan, BearingPoint said Wednesday.

BearingPoint is the latest in a long string of U.S. technology services companies that have set up development centers in India. While other companies have set up wholly-owned development subsidiaries, BearingPoint has adopted the unusual route of using the offshore facility of another services provider to set up its own offshore development operations.

“Instead of starting from scratch, we evaluated different partners and selected Covansys to give us a jump-start in the market, so that we have an immediate CMM (Capability Maturity Model) Level 5 capability with a partner that has been in this business in India for a long time,” said Craig Franklin, executive vice president at BearingPoint and the head of its Global Technology Services unit.

Part of Covansys’ Chennai facility will be dedicated to BearingPoint under the partnership. “If you think about it from a sliding scale, there will be heavy involvement from our BearingPoint management team in conjunction with the Covansys team for managing the ongoing effort, specific projects and quality programs,” Franklin said. “As you move down the scale to front-line software developers or the lower-end delivery, that will be done more by Covansys than by BearingPoint.”

The tie-up with BearingPoint could lead to similar arrangements with other services companies, said Martin Clague, Covansys president and CEO. “I think we will be on the radar screen, and people might approach us to do it, but you have to pick your partners carefully, as you can’t be selling bullets and guns to both sides,” Clague said.

Covansys was one of the first U.S.-based IT services companies to establish offshore facilities in India, and has close to 3,000 staff in the country. “We look forward to working with BearingPoint to help their clients reap the same competitive advantages of offshore outsourcing that Covansys’ clients have been enjoying for more than a decade — rapid deployment, world-class quality and reduced costs,” Clague said.

Staff of both BearingPoint and Covansys will be deployed at the BearingPoint GDC at Chennai. Part of the agreement between the two companies is that they will not poach each other’s clients, Franklin said, adding that in general Covansys and BearingPoint do not compete with each other in the market very often.

The GDC is already fully operational and is targeted to grow to 2,000 dedicated BearingPoint employees over the next two years, with access to as many as 3,000 offshore developers as demand warrants, according to a statement issued by BearingPoint. From the Chennai center, BearingPoint will offer its clients software development, enterprise resource planning implementation, application management, application integration, and business process outsourcing.

BearingPoint plans to have its own wholly owned development center in Bangalore as well. When that center is started depends on demand, though at this point the company anticipates it will be up and running in about six to eight months, Franklin said. BearingPoint already has an offshore development center in Shanghai, that was set up about a year ago.