With over twenty-five years of Engineering and Management experience Mr. B V R Mohan Reddy is the Founder, Chairman and CEO of Infotech Enterprises Ltd.
B V R Mohan Reddy
Founder, Chairman and CEO
InfoTech Enterprises Ltd.
With over twenty-five years of Engineering and Management experience Mr. B V R Mohan Reddy is the Founder, Chairman and CEO of Infotech Enterprises Ltd.- a Global Software Solutions Company incorporated in 1992. With over 3200 employees, Infotech’s areas of core competence are GeoSpatial Information Systems and Engineering Design. In the year 1996, Mr. Reddy was awarded the “Entrepreneur of the Year” by Hyderabad Management Association. Ernst & Young Private Limited nominated him for the “Outstanding Entrepreneur Award” for the year 1999-2000. He was also recipient of the “Outstanding Industrial Achievement Award 2004” presented by All India Manufacturers Organisation (AIMO). He discusses his thoughts and vision with GIS Development in an exclusive interview.
In the present era, how do you see the growth prospects of Indian IT firms? What is the future of mainstream Indian IT firms in the GIS domain?
In this country, there is an immense need for bringing in innovations. And that is not an impossible task. Innovations have been always there here and it is time that the best brains put their focus on it. I am talking of innovations that are apart from simple product development. Improvement and advance in the operational efficiency process is also a form of innovation. The improvements in the ways the things are done is also a form of innovation. Even verticalisation in a company is an innovation by itself. Indian companies need to concentrate upon how each and every the process can be further improved other than product design and development part.
Rather than what next, it should be what best. There are enough opportunities for innovations and Indian companies should work on constantly bringing in innovations in their processes. At Infotech, we are process-minded, for each of our processes we have people with specialized skills and we have done away with quality control department. In case of a failure or unsatisfaction, the sequence of suspicion comes in the order – firstly, the process, then training adequacy and finally the capability of the person.
In March this year, Infotech acquired Tele Atlas India, a wholly owned subsidiary of Tele Atlas BV, Netherlands. How has been the takeover and what was the mission?
I strongly believe that third parties can always be much more efficient than any captive units, when it comes to takeovers. That we proved before taking over Teleatlas. It was not that Teleatlas was facing problems; it was our and my personal initiative that resulted in this good arrangement. I believe that there is a value that any Indian entrepreneur brings to a transaction. We have tried to bring cost effectiveness, productivity, efficiency to our operations – savings are being done in various ways. At present, with combined forces, I have a good team and almost every thing is in right place for us to deliver the best for the industry.
How do you see the development of Infotech with respect to global trends of the markets?
I would like to understand the global trends in two verticals. Infotech also focuses in these two verticals. They are UTG – Utilities, Transportation and Government in which GIS is the core area of competence and EMI –Engineering, Manufacturing and Industrial products with core areas as CAD/CAM/CAE. To briefly analyze the UTG segment, I may say that creating detailed geospatial data is always a costly affair and hence the generation of spatial data should be only to the extent that the user demands. In the GIS sector, the data capture part is generally one time, but time-to-time updating is common. Hence, repetition of projects is low. The CAD CAM sector has a high repetition rate in comparison and has faster RoI. The next wave in this the UTG and GIS based segment is in integrating of systems, like integration of GIS with non-GIS sectors and data. I would like to say that growth opportunities are high in UTG. We plan to grow by 30-35% with a budget of $ 40 million in this vertical. We have also enlarged our geographical presence; recent additions are Australian and Dubai offices. All these efforts are targeted to ensure a sustained growth.
How much is Infotech’s presence in the domestic market?
I believe in having a good domestic presence. Not many, including Infotech, have been able to do so due to challenges in India. The new map policy has a potential to enable GIS industry to move further. Till now, we have been able to garner only 3.5% of revenue from the domestic market. But if we can do well, surely we will address that too.
How much is the share of these two different verticals?
As far as the share of two verticals is concerned, it is 60% for EMI, 40% UTG. In EMI opportunities are high since the repeatability of business in EMI is very high and that is not the case with UTG. We do want to change the UTG nature that is defined by service offerings. In engineering we are definitely in an enviable position.
Today any large digitization project cannot go without our notice. We have won large deals in the past and are also upbeat about fresh bids. In software development we have done extremely well, we have received CMM level 5 of certification. We are going in right direction, consultancy to NDPL is a part of this, but yes, conversion still gives us the large amount of revenue.
How do you strategise your business especially in the current scenario of competitiveness?
If a company like ours keep on doing the same thing again and again, anybody can overtake us. We constantly innovate and try to move up the value chain. The disadvantage of not moving on this lines means that other players can come in and the opportunity, which we captured, is commoditised. This reduces the profit margins. We started with digitization but the today’s situation is that we do not bid only for large digitization products. We have moved up the value chain – we have become software development firm, we undertake consultancy, customization of software, etc.
We have an international consultant working with us to revisit the goals of the whole company, particularly in the vertical of Utility, Transportation and Government. It would analyze what skills are available in the company, what services offerings the company makes and what are the opportunities in the related areas. Even in the core IT sector programming is no more the focus area. The companies have matured to a level of providing solutions worth the value for money of the customers.
Infotech has been active in overseas markets too?
Infotech has made few localised initiatives on its three areas of functionality – conversion, software development, and consulting. We have also changed to working on global delivering model. As part of this a local development center in Frostburg, MA, US has come up. A small town has been selected keeping in mind the cost-effectiveness. We have reached to those people who do not want to share their data with India, in wake of 9/11 or other security concerns. Also in London office we have mix of outsourcing and offshore-ing; we call it ‘right sourcing’. For outsourcing we have the motto set as three possible solutions – ‘onshore low cost’, ‘near shore’ and ‘off-shore’ outsourcing.
How has the vision of Infotech evolved over the years?
We keep doing vision exercise and setting goals for future. Today we visualize becoming a $ 100 million company by this financial year. And also to be a Rs 1000 crore company by 2009. Secondly, our vision is to remain a profitable company, we want to be at a post tax profit of 10-12%. I should mention that we are high tax paying company. Thirdly, we envision excelling in every area we choose to be in, presently both the UTG and EMI. By 2009, we want to be among the top 10 companies in the world and top 5 in India. So, our vision a combination of above all. We do some mid-course correction in our vision.
Looking back, how do you see your past achievements?
One thing I feel good about is that I created 3000 plus jobs. This is really very gratifying for me as a human being. We have been successful in institutionalizing the company, there are 40 – 42 sales managers, and three presidents govern the company. It makes me feel proud that an opportunity has been created for many that will last long. And none of this is dependent on my existence. My success story is governed by PPT (which is also file extension of Power Point file) – People, Processes and the T has three T’s in it – technology, tools and training. I walk my talk. I have a strong conviction about companies should shed 5% in terms of their inefficiency. While a performer should get rewarded and the non-performer be sacked. I also believe that the industry in which we are in, has no benchmark. While improving the efficiency and quality level of each engineer, the productivity moves up.