The US-based Mphasis, an interactive architecture company, and the Bangalore-based BFL, an offshore development company in the field of infotech, have announced a merger to one entity, Mphasis-BFL. This merger, feel the two, would position the combined company as an interactive architect with quality capacity for end-to-end e-business solutions, by leveraging the strengths of Mphasis' interactive architect capabilities, and BFL's back-end capabilities. BFL is publicly listed on stock exchanges in India.

The regulatory formalities involved in the merger of BFL and Mphasis are expected to be completed in this quarter. The financial consolidation is also expected then. "However for all practical purposes, we have commenced operations as one integrated entity," said chairman designate, Jaithirth (Jerry) Rao, while announcing the merger on April 3.

"Mphasis-BFL is positioned as an end-to-end solutions provider for e-businesses. Our work commences with business planning and goes all the way through business architecture, technology architecture, systems design, systems development, deployment and maintenance. We are experts in ensuring that there is superb plumbing behind a website with access to multiple systems (both legacy and new) in sub-seconds.  Internet/CRM technologies enable us to transform our clients'   marketing and service capabilities. The same technologies create a unique opportunity for established businesses to ensure a common customer experience across multiple channels, not just the web. Call centers, agents, mobile telephony, wireless, kiosks and physical branches can all be woven into a seamless continuum. This is what Mphasis-BFL is specially equipped to help its customers with," he said.

He added that the solid reputation of Mphasis as interactive architects, combined with the solid reputation of BFL as a very high quality offshore developer, is really synergistic and unique. "We do not believe that there is any company which spans the entire spectrum of the value chain, and which at the same time has such high quality development capacity through our Indian offshore arm. We are therefore in a category by ourselves."

As part of a wide-ranging reorganisation, Rao announced the appointment of three presidents. R. Mohan, who was managing director of BFL, is now president of the development division of Mphasis- BFL. He will be based at Bangalore. Jeroen Tas, who was CEO of Mphasis, is now president, Mphasis- BFL, North America. Tas will be located in Santa Monica, California. Arthur Flew, who was president of Mphasis, has been appointed president of Mphasis-BFL International. His geographic responsibility will include Europe, Asia-Pacific and Latin America.

The company has also decided to spin off, into a separate subsidiary, a portion of BFL's products division. The subsidiary will be headquartered in Sunnyvale, California and will focus on a suite of products for net-based shopping malls. Heading this spun-off subsidiary as its president and CEO will be Sridharan Kothandaraman, who was CEO of BFL.  Talking of his new responsibility, Kothandaraman said, "Product companies need very small, cohesive, dedicated teams with a lot of passion. I believe we have the right ingredients in place."

Explaining the rationale behind the spin off, Rao highlighted the importance of separating the confusion that arises when a product company resides inside a solutions company. "This enables the product effort to stand on its own and get the attention it deserves. While we will share in the upsides of the company, it is our intention, over time, to find other investors and deconsolidate the subsidiary. This is the first time that a Silicon Valley-based product company is coupled with a Bangalore-based development unit from inception."

The verticals that Mphasis-BFL seeks to focus on are: banking, brokerage, insurance, the retail industry, media and telecom, logistics and supply chain management.

Summing up the positioning of the company, Rao said that "we want to distinguish ourselves from other interactive architects who are bound to have capacity problems as they try to scale up their business.  We also want to be sure that we can have, as part of our target market,  both dot com companies and established firms. Our customer base is more global than other interactive architects.  Our investor base is global.  Our managerial talent is global.  We like to think of ourselves as special on this count."