The Hindu Business Line : 2001 blues behind it, IBS looks to future

`I believe, therefore I am' (with due apologies to Des Cartes), seems very much the credo at IBS Software Services based in Technopark here. IBS specialises in the travel, transportation and logistics (TTL) space and has operations in the US, Europe, West Asia and Asia Pacific. An SEI CMM Level-5 assessed and ISO 9001 certified company, IBS employs 400 professionals worldwide.

IBS began operations in 1997 as a joint venture between the International Business Services Group and Atraxis AG, the IT arm of the erstwhile Swissair Group. Business Line caught up with the Managing Director, Mr V. K. Mathews, in the midst of a business trip abroad.

Two major incidents - - 9 /11 and folding up of Atraxis AG - - must have impacted the way IBS has been transacting business in the recent past. Do you think you have succeeded in getting these adverse developments behind you, and if yes, how?

Yes, I would say IBS had to cope with and overcome the impact of at least three catastrophic setbacks of 2001, viz. (i) the IT bubble burst (ii) 9/11 that paralysed the air transportation industry and (iii) the collapse of Swissair Group. I am glad that these are all over now and that we are moving ahead.

Some of the strategies that we were already pursuing as part of our original expansion plans had helped us sail through this turbulent period. These strategies are: (a) to be a domain-centric, focussed offshore company (b) to spread our business operation geographically to all four major markets - Americas, Europe, West Asia and Asia Pacific (c) to become a product company for the TTL sector.

We had embarked on a number of strategic product development initiatives, which helped us move up the value chain more as a solutions company than just a services company. The takeover of `TopAir', a software product for supporting and automating flight operations from EDS, was in line with this strategy. TopAir is currently used by over 11 airlines including Swiss, South African, JMC, Air2000, etc.

The National Association of Software and Services Companies (Nasscom) has observed that Indian software vendors have been able to tap only two per cent of the global IT services market. Logistics, along with wngineering/R&D and sales, is being seen as the domain with the best scope for Indian companies, offering an estimated projected services market worth $308 billion by year 2006. Are you game for the big opportunity?

Our objective is to become leading supplier of services to the global TTL sector by 2008. In the logistics sector, we are already into major initiatives such as the following.

new cargo terminal operations system that we are developing for the mega terminal in Dubai, a very large project for the Emirates Group.

developing the logistics & transportation management solution for GulfShare (Shell/ BP/ Conoco/ Chevron etc) in the Gulf of Mexico

Developing the port management solution for ports in West Asia.

Coming to business process outsourcing, why have you confined yourself to airline revenue accounting? Do you see any possibility of extending the scope of the BPO services in the immediate future?

BPO is different from the typical data entry or ITES business as the client is literally outsourcing a business function. For this, the supplier needs to understand the business processes of the client. IBS has the differentiating strength in airline processes and therefore we would like to stick to this area of our core competence.

To what extent do consulting (both IT and business) and methodology services contribute to your bottomline? Is there going to be a review of the `product mix'?

At the moment we have about 10 per cent of our revenues coming from consulting. We would see this increasing because this year we are adding about 10 European business consultants to the company. And business consultants are always scarce to find and they are expensive too.

Do you think the domestic market has matured enough for IBS to think of a major initiative within India? What is the extent of the organisational tinkering that would be needed to if this were to happen?

We have already started promoting few of our products in India. We have a full time sales manager for promoting Proficient, our enterprise-wide project management tool in India. We are also talking to the civil aviation industry regarding the need for changing and modernising, and this is done as a free consulting to start with. Of course, to do business in India, we need to have a different strategy, considering the lower price and the longer sales cycle and decision-making time. The software services still form major part of our income and I will estimate this at over 70 per cent of total revenues this year.

Do you think the time has come for revisiting your IPO plans?

I believe that we will be a Rs 100-crore company during the year 2004-05, and I feel that it is the kind of size appropriate for an IPO. IBS should plan for IPO during mid-2005.

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