The $400-million Polaris Financial Technology is planning a major restructuring, a move that will demerge its product and services businesses into separate units, as it looks to differentiate itself in an uncertain IT services market.
The Chennai-based financial services firm, which appointed a four-member task force in January to ‘detail the actions required to unleash the company’s full potential’, will also divide its product business further into three separate entities, it is learnt.
The task force, which came back with its recommendation last week, pointed out that products and services were distinct businesses that needed their own strategies, investments and ecosystems.
Chairman and CEO of Polaris Arun Jain had told The Hindu in January that the company’s board was worried over the underestimation of Polaris by the investing community.
The move to appoint the task force and to go ahead with the consequent restructuring, therefore, comes after outside consultant BCG conducted a study on Polaris and felt that the company ‘had huge undiscovered value’.
The task force also felt that the services division should have the ability to partner any third-party solution provider, while the products business needed focused research and development investments in each product line.
While the services business will be restructured to create a customer-centric organisation, the products entity will be further split into three units that will focus on global transaction banking, core banking and insurance products, respectively.
According to sources, Govind Singhal, a Polaris veteran, will work closely with Mr. Jain to facilitate the change. The company has given itself till June 1 to work out the details, and roll out the new structures, it is learnt.