Tech Mahindra’s “Growth Factories” A Promising Investment Strategy For The “As-a-Service Economy”

Tech Mahindra’s recent announcement of $150 Million investment in “Growth Factories” initiative headed by Jagdish Mitra is in HfS opinion an example of promising investment strategy for the As-a-Service Economy, provided it is executed as planned.

HfS recently met Jagdish Mitra at NASSCOM NILF 2015 in Mumbai and, based on our discussions with him and the details of the initiative that are now emerging, we believe Tech Mahindra’s “Growth Factories” initiative is aligned with our hypothesis of a winning investment strategy for the As-a-Service Economy. (Read Does your service provider have a winning investment strategy for the As-a-Service Economy?”).

Tech Mahindra’s key “As-a-Service” alignment priorities:

• A multi-year commitment to evolving their delivery model to “As-a-Service”.
• Evaluating technology and platform investments with “VC like funding” approach.
• An investment bank of $150 Million.
• Making big bets in digital, platform-based offerings and direct to consumer businesses.
• Collaborating with employees to develop innovative solutions through  “intrapreneur” program. One recent successful example of Tech Mahindra’s intrapreneur program reported in the media is the development of goggles for the blind.
• Setting the scope as organization wide with the intention of accelerating usage of platforms across business lines for the growth. HfS reviewed several of Tech Mahindra’s platforms such as OrderVu, OrderFix, Socio, and Tecnico as part of our recent Telecom Operations Services Blueprint.
• Seeking to acquire/work with external partners and get talent on board from other innovation hubs such as Silicon Valley and Israel.

We are keeping track of Tech Mahindra’s moves and its evolution from a niche player to one of the top India-centric service providers.  Its commitment to telecom, manufacturing and BFSI verticals; recent acquisitions for deepening vertical expertise such as Lightbridge Communication Corporation (Read HfS PoV here) in telecoms and SOFGEN Holdings in BFSI; and now organization-wide commitment to platforms and digital solutions are all promising signs.  Net-net, HfS is impressed with the recent growth performance and intention showed by Tech Mahindra.