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"Small and medium enterprises looking for IT solutions are not confident that big technology vendors would give them the attention they want. Also the deal sizes are smaller and the big vendors may not be interested in them."

Chennai , Aug. 29

SRA Systems Ltd, the city-based software vendor, is shaking off the effects of the downturn in the IT industry and eyeing the business process outsourcing space keenly, according to Mr S. Srinivasan, its Chairman and Managing Director.

Speaking to the media, Mr Srinivasan said, "We added 16 new clients between October 2002 and August 2003." The company had no client additions between April 2001 and September 2002.

The company estimates revenues of Rs 45 crore in the current fiscal compared to Rs 33 crore in the year ended March 2003 and Rs 44 crore in the year ended March 2002. It also estimates profits to grow to about Rs 4 crore from Rs 30 lakh in 2002-03 and Rs 2.47 crore in 2001-02.

Mr Srinivasan said, "The reason for the confidence in this estimate is that our current order book position is $7 million and we have also worked on software tools to make software implementation quicker and easier for customers."

The company also underwent a restructuring exercise in the time between the slump and the recovery. It relocated its CEO, Mr V. Kanna to the US, in order to be "closer to the customer." He added that SRA Systems now worked with clients directly.

SRA has developed software tools in the area of knowledge management, e- learning, workflow automation and the like.

According to Mr Srinivasan, "We see a natural BPO opportunity in the healthcare and financial services space for transaction-based services. We already have tools selling in the market in these two areas. We should see some activity in the next two months." He declined comment on the investments planned, details of strategic investors that the company was seeking and the like.

Mr Srinivasan said manpower strength would grow to 350 at the end of the current fiscal from 300 now. SRA Systems had "retrenched about 75 employees in the difficult period."

The company earlier had a tie-up with Carnegie Mellon University through the Sterling Group for conducting courses in India, for which SRA would deliver technology. "Since the education market was down, that initiative did not take off," he said.

Mr Srinivasan added that visits from prospective customers were also increasing. Asked to comment on the profile of customers added recently, he said, "Many customers are new to offshore outsourcing."

Asked why they chose to come to visit small software vendors, Mr Srinivasan said, "Small and medium enterprises - in the Fortune 1500 list - looking for IT solutions are not confident that big technology vendors would give them the attention they want.

Also the deal sizes are smaller and the big vendors may not be interested in these deals ranging between $ 1 million and $ 2 million." He added that currently, competition for small orders from big Indian vendors was not intense.

According to him, "Earlier, when the downturn became evident, big vendors ate into the share of smaller vendors by bidding for deals as small as $ 200,000."

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