“Outsourcing to India is key to our turnaround”–Pearson

Its UK’s leading supplier of Information Communi-cation Technology (ICT) and services to schools. However, this 30-year old company had its worst year in 2002 when it suffered significant losses. It was in the same year in April that the 41-year old Tim Pearson took over as CEO. Today he is spear-heading the turnaround of RM Plc with clear-cut strategies–one of them being setting up of an offshore development center at Kerala’s Techno-park. 

In an interview with R Sreekumar of CNS, Pear-son outlines the company’s major projects and its plans for future.

Established in 1973, RM Plc is the leading supplier in the educational technology market in UK. How do you account for the losses made last year?



Our operational costs were very high in UK. There were complaints from our custo-mers about bad service deli-very. Many of them were unable to get the required information from the company regarding the use of our products and services.

What steps did you take to turnaround the company?



We have now implemented a rating system whereby our customers rate us every three months on a scale of 1-10 and the results are encouraging. Secondly, we have started our first offshore development center in India that could deliver high quality software solutions as well as technical support for our existing custo-mers. Analysts expect us to post a turnover of 215 million pounds and 8.5 million pound profit.

Which are the major projects that you have outsourced to India? 



We have received a seven-year contract for conducting UK’s first online examinations of Qualifications and Curri-culum Authority (QCA). RM is providing the complete end-to-end solutions from software development, conducting exams, tabulation and publica-tion of results. The project will monitor the progress achieved by the schools and students. To begin with 14 year olds in 81 schools will be assessed and about 600,000 students would be taking these exams

ann-ually. 

Already 12 people are working on this project at Technopark and the strength would be increased substantia-lly. The other major project is a 30 million pound contract to provide managed ICT learning and teaching environment for all of South Lanarkshire Cou-ncil’s learning establishments. We are bidding also for several other projects.

What advantages does India offer for RM Plc? 



Indians are very good learners. It is easier to find bright, educated people much easier in India than in England. We want to choose countries carefully for our offshore development and marketing activities. Certainly we are planning to expand in India as sensibly as possible.

What are the visible changes in use of IT in education? 



In 1973 when RM Plc started no schools in UK had a computer. Now each school has a student-PC ratio of 6:1. Earlier, all purchase decisions were centralized now each school has an IT budget. Operating out of India it makes sense for RM to explore Indian market and generate revenues from here.

Is there an outsourcing anxiety in RM Plc, UK? 



Outsourcing is inevitable. But unlike other sectors IT is not unionized in UK. But we have to be sensitive in dealing with the issue. At RM we have a labor turnover of 17 percent and we are growing. The situation is not that serious.