Our little sister
Aviva Rosen-Ganot
11.10.2000 15:35
Comverse’s little sister Infosys is going to be issued shortly. Some say that the company value will be no less than $1 billion and that the company is certainly ready to be issued and is merely waiting for the right stock exchange timing.
Infosys founders were sure that it also has the ability to reach its parent company’s standing (which has already crossed the $10 billion mark). The first among them was Carmel Vernia, former Efrat general manager in Israel.
After the change in Efrat’s organizational structure when it ultimately and officially became Comverse, a division was spun-off into an independent company. General manager Vernia decided to take the helm of the little company, due to the enormous potential he saw in it and perhaps also due to the challenge of turning a (relatively) small company into a giant, like Comverse.
All the other members of the founding team, headed by current general manager Dan Bodner, finance manager Igal Nissim and human resources manager Yael Covo, stayed with the company and claim that 95% of the managers coming from the big sister also stayed.
How did they know that Infosys should be spun-off and become a separate company? Human resources manager Yael Covo says that the companies’ different cultures became more pronounced until it was clear that the two companies were significantly different and a spin-off was only a matter of time.
Nonetheless, it was not so simple. Bodner says that the process is behind them, but claims that bold steps were taken, involving considerable risks. In effect, not only was there a spin-off, but a merger with another Comverse company with synergetic activity. Following soon after were other mergers with companies with complementary technologies.
On making the decision to spin-off, Comverse drew up a separate business plan for Infosys, with its own focus, and started planning the complete separation of activities.
The business plan included thorough investigation of new directions the world was taking and it was quickly decided that although the company had sprung up from military intelligence, this would not be where its glorious future lay, since this market was rapidly sinking. Another fast-growing market was identified, the corporate market.
This appears to be how the company mainly differs from Comverse. The big sister focuses on large telephony companies (PTTs), while Infosys focuses mainly on coporations, although it is not completely abandoning the PTTs market. One of the key fields Infosys has entered is CRM, which has a different business environment and competitors to those of Comverse.
The strategic plan involved acquisitions and mergers. One acquisition was German company SYBORG Informationssysteme, in order to penetrate the European market, where it felt inferior to its competitors. Infosys also acquired Colorado company Loronix Information Systems to position itself as a company capable of providing comprehensive corporate solutions, not only in audio but in video recording and multimedia as well.
The company says it has more acquisitions in the pipeline. The company is examining companies to complement it in voice and video mining to meet urgent needs of customers wishing to widen pressure identification at centers, so that strategic customers can be immediately passed on to executives.
At the same time, Infosys wishes to acquire additional capabilities in internal identification for customers interested, for example, in tracking thieves among customers and employees.
“We have strong development in these areas too, but we’re actively looking for suitable acquisitions in order to be first to market,” Bodner says.
What about competition with NICE, which claims to be the first worldwide in various areas, such as CEM (voice recordings for CRM)?
”We took a strategic decision not to enter one field in which NICE is very strong – logging, archive recording. Overall, in the voice recording field including this, NICE is the first. However, I think we lead in CEM.
“They wanted to acquire Loronix, but they did not buy another company. Here, we got the advantage, but it’s temporary and we need to work hard to maintain it. We certainly take them seriously as competitors. In fact, we see them in all the tenders and we have to exert ourselves to win.”
Nonetheless, it doesn’t do any harm to be Comverse’s little sister, even though you’re trying to create a clear distinction between the two companies.
”We use the advantage of size in several areas, such as car leasing and for the good of employees, such as insurance policies. Obviously we also exploit it with suppliers we share with Comverse.”
At the same time, Nissim stresses that the companies work completely separately and that Infosys has a totally different sense of unit pride.
”In human resources, we compete ferociously with one another for candidates and try to explain our different culture, a small, less formal organization, and we work hard at maintaining the intimate atmosphere,” Covo says. “On the other hand, if an employee feels he has reached his full potential in one company, we prefer him to transfer within the group rather than leave it entirely.”
Focused on organizations
Comverse Infosys currently has a staff of 780, after starting out eighteen months ago with 300. 380 employees work in Israel, 280 in the US and 120 in Europe. These figures include employees the recently acquired companies Loronix and SYBORG.
Bodner says that in this period Infosys doubled its revenues from $70 million to $140 million. Infosys currently provides 15% of Comverse’s revenues and does not yet constitute a competitor to Comverse Networks Systems, the older sister from which it was spun-off.
The differences to mighty Comverse Networks, which is focused on added value services to international telephone companies, including mail boxes, fax boxes, etc. are growing as the small company increasingly develops in the direction of corporations and organizations interested in call center recordings and CRM.
Infosys announced the acquisition of Loronix for $224 million in shares in March 2000 and the acquisition was completed in July. Simultaneously, Infosys acquired SYBORG for $19 million in shares.
Published by Israel's Business Arena on 11 October, 2000 |
