Mindtree, the mid-size IT firm, is starting to win deals from bigger peers, according to its CEO Krishnakumar Natarajan. In an interview with Business Line , Natarajan spoke about the company’s reorganised sales structure, investment areas and the contours of future growth .

The US geography has enhanced contribution across the board for all offshore IT vendors. Is it secular and will it lead the growth for you?

I would think the US is certainly coming back, though it may not be as buoyant as one may have expected after the Lehman crisis. Of course, it is much better than what it was 12 months ago and the demand is now uniform across segments. We saw both BFSI (banking, financial services and insurance) and manufacturing segments growing at near double digits in the recent quarter. Also, some of our investments such as opening up a delivery centre at Gainesville, Florida, is starting to pay off. In the last 9-12 months, we have ramped up our front-end sales force to tap into new opportunities.

Can you elaborate on the reorganisation that you have carried out?

More than reorganisation, it is a change of approach. We have enhanced our sales force, trying to be more local and have tied up with the University of Florida, where we recruit their graduates and train them. Secondly, customers started asking us as to what is it that we were the best at. Just being the best among mid-tier IT companies wasn’t enough. So, we decided to focus on fewer segments and drop others. Even as we focused on fewer segments, we decided to choose a set of customers and see how we could be relevant to them. So, we decided to get out of our tail-end customers. Our per-account revenue has gone up by 40 per cent in the last two years as a result of all these steps. Overall, it is just a theme which we have executed in stages.

You had talked of niche areas in outsourcing such as mid-tier banks, first-time outsourcing companies and so on. Are you seeing any demand from them?

In BFSI, many first time outsourcers are coming in and we are winning our share of business. In the last two quarters, we have seen even the larger banks becoming interested in engaging us. The large outsourcers used to engage 3-4 large vendors. Now, we are also called in.

Would all mid-tier IT firms look to be more selective and focused?

Yes. Earlier customers demanded only cost efficiency from the IT vendors. Most of those low-hanging fruit are taken and opportunities are now limited there. In the next stage, customers are asking for improvements in their business outcomes. You cannot be everything to everybody. Of course, the larger IT vendors have no choice.

Your utilisation is still in the 74 per cent levels. Is it prudent to have large bench strength?

We do have excess capacity but we will honour all our campus commitments. We are not very concerned about it and are taking 1,100 people this year from premium campuses, lower than the 2,000 we took in last year. So, we hope to balance it out.

What are you doing to improve predictability in revenues, something you and many other company heads are speaking of?

This whole concept of multi-sourcing by large customers is helping us. The intention is to have a certain base level of revenues that are predictable. Then there are fixed price projects that help us maintain our margin profile. Also, slowly, we would like to drive our non-linear revenues. The cost of acquiring the right customers is pretty high. So, we are very choosy about where we spend that money . Once we acquire a customer, we try to mine them deeply.

>giriprakash.k@thehindu.co.in

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