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Neha Kapoor

Mr Sudhir Sethi

MUMBAI, Nov. 27

``WE have to be one among very few to succeed in the market as the IT industry is becoming increasingly polarised with business going either to very large companies like Infosys or small, niche players,'' according to Mr Sudhir Sethi, President and Executive Director, Infotech Enterprises Ltd.

In an interview with Business Line, Mr Sethi discusses, among other issues, Infotech's efforts to differentiate itself to grow in a stagnant market.

Excerpts:

Infotech has undertaken a reorganisation of its business to focus on verticals. Could you explain the rationale behind this move and also elaborate what the process entails?

Today, business is going to either very large companies such as Infosys and Satyam or small niche players. We cannot afford to be a generalist...we have to be one among very few. Implicit in this positioning is the need to be financially sound with a scalable business model.

Hence, we have undertaken a verticalisation process to focus on specific areas of operation to enhance our domain expertise. The first phase, initiated around six months ago, included organisation of our sales operations to reflect focus verticals that we operate in — aerospace, auto, utilities, transport and logistics, and local government — as well as for horizontals - GIS, Engineering and Software Development and Services (SDS).

The next step is to work on developing the new Benelux markets that we have recently entered. The second phase will see clustering of customers in to high-end and low-end, whereby a certain kind of work done will be replicated to strengthen our expertise.

In the third phase, we would scale up customer relations and the final phase will involve getting domain specific personnel on the delivery side.

What role will inorganic growth play in these efforts?

Acquisitions are part of an ongoing process to augment the company's growth. The most important strategy for the company, however, remains organic growth. If we do find a good candidate for acquisition we will go ahead; if at all it happens, it would primarily be for the US market with the target company operating in GIS or engineering space, having a good customer base and sales engine.

What is the contribution of various markets and horizontals that Infotech operates in and going forward, do you see the pattern changing?

As of now, GIS contributes around 40 per cent to total revenues while engineering division brings in around 30 - 32 per cent and the balance comes from SDS. Going forward, we see the contribution from all segments balancing out.

In terms of markets, the US contributes 70 per cent, Europe 20 - 25 per cent and Asia-Pacific around 5 to 6 per cent to total revenues. While the US would continue to remain a dominant market, business from APAC including the domestic market should increase by two to three per cent in another year.

Business Process Outsourcing (BPO) seems to be the buzzword in the industry today with almost all major players making a foray in to the field. Does Infotech have any such plans?

We will only undertake something to service customers better — for example we have recently added embedded systems and tools and fixtures to our service offerings which are complementary to our GIS and engineering work. Similarly, if BPO fits in to our business model -

if tomorrow a customer asks for the service - we would offer it but will not set up an isolated business.

Infotech's software division has done some work for the financial services segment too. Do you plan to grow this practice further?

We will concentrate on consolidating our position in the manufacturing business i.e. automotive, aerospace etc through GIS and engineering. However, majority of spending on software comes from the financial services sector, so it is an important sector and we have four clients in this field. Our division has done some work for financial companies — mainly GIS related work based on application life cycle management. But here again we will grow by replicating the work done to strengthen our domain knowledge.

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