The annual requirement of software-trained people in India is around 50,000, and the supply is also just about the same.

Under the circumstances, it will not be easy for CMC to recruit many software engineers, and train them in such a short period. Of course, it can try an innovative technique which no other player has tried so far in the software industry. It can do head-hunting in EDPs in India. EDPs have a lot of talented andwell-trained manpower, who can handle Unix platforms with comfort. As these people are well versed in handling computer jobs, including data processing, only minimal training is needed to make them fit for the assigned job.

CMC is a Rs 300-crore company. It has decided to concentrate on broadbasing its support services, setting up infrastructure to support e-commerce and strengthening the export performance of software development.

The company hopes to earn around Rs 60 crore through software exports in 1998-99. Though there is nothing wrong in the company aspiring to become a software giant, it should not shed its core competence for achieving this aim. That will be a costly mistake. In IT services, the company should primarily concentrate on VLSI, tool design and support services. The company also wishes to be a partner of major international players particularly the Fortune 500 companies on a contract basis, where 80 per cent of the work will be done in India, and the remaining abroad by theinternational company.

In the first quarter of the current year the company posted a turnover of Rs 51 crore, which was a 35 per cent jump over the corresponding period of the previous year. The net profit recorded a significant 200 per cent growth in the same period to Rs 89 lakh. But at the same time, the company's other income rose from Rs 29 lakhs to Rs 113 lakh. This has contributed to the whopping growth in its net profit. Even otherwise, the improvement in performance is on account of infotech solutions the company has provided in areas like railways, finger-printing, tracking systems, and enterprise resource planning (ERP).

There is one major difference between CMC and other infotech companies. CMC is a government company, whereas the others are in the private sector. In fact, CMC is the only government-owned domestic computer company. But this itself acts as a handicap to the company in attracting skilled software-trained people into its fold because of the low government-fixed wages, againstattractive six-digit salary figures elsewhere.

CMC has realised this handicap and has already written to its parent agency the Department of Electronics asking to bring down the government equity level in the company from the present 84 per cent to below 50 per cent so that the company can come out of government control and function more independently. Moreover, decision-making is very important in the software industry.

CMC has also suggested to the government that it offer a part of its stake to domestic financial institutions. But this is meaningless. There should be real privatisation. The government should either disinvest its stake in the open market to the highest bidder, or allow the company to go for a public issue so that its stake is diluted indirectly. The company has a paid-up capital of Rs 15.1 crore. The company is also considering stock option to its employees as a means to attract and retain qualified personnel.

CMC has sought permission from the government to invest $1.5 million in itsAmerican subsidiary Baton Rouge International, since the company is confidant of doing well in the American and Canadian markets in the current year. Baton Rouge International posted a turnover of $17 million in 1997, and $11 million in the first half of the current year. A major portion of the revenue for Baron Rouge International is from the banking division. CMC may have many ambitions, and may submit many proposals to the government for consideration. But given the nature of people manning the government departments, it is doubtful whether the centre will act quickly and allow CMC to grow. If that happens, it will be a miracle of sorts.

(The author is a financial analyst)