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Bijoy Ghosh

Shiva Ramani

K Bharat Kumar

The IT and ITES industries have been jolted a bit by a couple of obstacles in their path, namely the appreciating rupee and a possible US slowdown, which could impact IT spending. In this scenario, eWorld wanted to find out what made small companies tick and how they cope with such sudden reversals.

The Cybernet-SlashSupport (CSS) group, whose companies are into software services, technical support, remote infrastructure management and testing services, is about that size — with 5,000 people — to qualify as a mid-tier company. eWorld met with Shiva Ramani, Co-Founder and CEO, CSS to check out his view point on happenings. Excerpts:

With a headcount in excess of 5,000, how significant a player are you? What is your experience at the marketplace?

Sales cycles have fallen. CSS is now looking at $25-30 million deals as opposed to the $5 million deals earlier. This space is being vacated by the bigger players in favour of much larger deals. It’s an opportunity for us. We are currently in the midst of two-three exciting large deals. Our global sales team has grown this year — to about 10 people now from three earlier.

How are you reacting to the appreciating Rupee?

There has been a slack in the system. I believe the rupee appreciation will shake up the system a little bit.

I see rupee appreciation as an opportunity for us. It drives efficiency operationally for us. I believe we have finesse, both financially and operationally, to manage the rupee appreciation to our advantage. For a 15 appreciation of the Rupee, I believe we will be able to limit downside by achieving at least a 5 per cent improvement in productivity and a 3 per cent increase in fee. Even with the Rupee at 35 to a dollar, I would be bullish.

Most companies have looked towards Europe mostly for expansion opportunities but especially now since dollar revenues turn unattractive. How about you?

We expect Europe to contribute about 25 per cent to our revenues in two or three years. Currently, Europe contributes less than 5 per cent to our overall revenues.

We will also look out for acquisitions in Europe for expanding our customer base. We are looking out for more French and German customers.

We are also looking for ‘carve outs’ (that is, vendors take over a part of the client’s assets, both infrastructure and manpower in order to be able to provide more efficient services using those assets.)

Our revenue concentration in North America and revenues in dollar currencies are still higher than what we would like them to be. Also the fact the European market is becoming more accessible and ready for significant outsourcing is the principal driver for our expansion.

The first step in our European expansion is our strategic partnership with Bergler ICT, a Netherlands-based IT company. Netherlands is a $1.5-billion Outsourcing market and hence the potential to tap into companies there is huge.

As part of this partnership, we will be hiring about 200-300 Infrastructure Management and tech support professionals at our offshore facilities in Chennai.

We will be in Germany too for our tech support and remote infrastructure management services, over the next six to twelve months.

Overall, we want to add 15 new customers this year. Next year may be a year of build out for us and the year after could be a year of rapid ramp-up of customer revenues.

Even now, existing customers are growing well — 15-20 per cent growth every year.

Is attrition growing any lesser?

There is attrition but we are managing it well. We have got strong training systems and processes in place. We are cutting down on Sales and Marketing costs. We are creating a system of variable salary for certain sales people.

Our recruitment strategy is changing. Rupee is making us more creative and innovative.

We are working at creating a strong mid-level management. The belief is that if we listen to mid-level managers and keep them happy, they tend to keep those under them happy.

So, we are targeting the about 400 mid-level executives in our companies. Also, with regard to recruitment, we are now looking at ‘at source’ filtering.

Those who have constantly moved jobs have less chance now of being considered. Increasingly, job hoppers will find it difficult to gain entry. And that is a significant shift in our thought process.

bharatk@thehindu.co.in

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