Listing out achievements and the reasons behind the growth in analytics, cloud and MPS businesses, Ranjan Chopra, Managing Director, Team Computers, spoke to Amit Singh on his plans to garner maximum growth from analytics, mobile app development, and data security over the next 12-18 months
Please take us through the achievement highlights of Team Computers in the last 12-18 months?
Over the last 12 months, we have done extremely well in sectors including BFSI, PSU, automobile, and insurance. With our vertical focused approach, we have performed tremendously in BI and analytics with revenues of over Rs 80 crore, registering a 50 percent growth. Our cloud business has grown to Rs 70 crore while we doubled our business from Google.
In addition, we have seen 200 percent growth in our managed print services business with revenue of over Rs 100 crore. Further, we have registered decent growth in our systems integration business (including mobility) with revenues of Rs 600 crore. Besides, we started new business unit for developing vertical and horizontal mobile applications for our customers, which has seen a good growth.
Overall, our business has grown by 30 percent to Rs 850 crore in FY2016-17. We currently have a run-rate of Rs 80 crore per month, which will enable us to touch the Rs 1000 crore revenue in the current fiscal. In fact, we would have easily crossed Rs 1000 crore figure had there not been slow-down in business during June-August due to GST implementation.
What have been your sales, marketing, and customer acquisition strategies over the last 2 years, which enabled you to grow?
Going into the reasons for our growth, we would credit our ability to spot the trends and market opportunities early. For instance, we were early to spot opportunity with Google cloud. While the cloud market is led by Microsoft and making Microsoft customers switch to Google will take some time, there are a lot of customers struggling with Linux or Lotus notes and don’t want to opt for expensive solutions from Microsoft. We are offering them an option to switch to Google cloud, which has proved to be a large opportunity for us.
In addition, we entered the MPS business as it has limited competition and not everybody understands this business. We created a focused sales and delivery team for MPS, which enabled us to grow this business. In our BI and analytics business, we have brought in an automobile veteran with over 25 years of domain knowledge to lead our analytics business division. This strategy has enabled us to understand our customer needs quickly and grow much faster against the competition. In fact, our analytics business from automobile and insurance has grown pretty fast.
Moreover, we have robust pre- and post-delivery mechanism. Post-delivery includes change management and adoption, which is quite crucial for successful completion of the project. For instance, most of the people use only 10 percent of the features available in any given software/application. Hence, we have created a team to help people utilize at least 80-90 percent of the features. This creates a wow factor among the customers. When a customer gets an excellent experience, then our business grows faster.
Further, we have a robust strategy for customer mapping and marketing through various channels including emails, Linkedin, Facebook, WhatsApp etc. We also organize 2-4 customer events every month in cities like Delhi, Mumbai, Pune, Jaipur, Ahmedabad, Chennai and various locations across the country. This has enabled us to acquire customers in new geographies. In addition, we have been very active in PSU space which enabled us to win few large projects.
What are your top priorities for the next 12-18 months?
Over the next 12-18 months, we want to go deep into the existing markets we operate in. Our focus will be to develop the market, customers, people, and processes. Moreover, we are focused to improve our warehousing and supply chain processes in order to double our revenues over the next 4-5 years.
With the GST coming into play last year, we are simplifying our warehousing while reducing the number of warehouses from 20 earlier to about 3-4 over the next few months. In addition, we are improving our processes to make a robust supply chain where orders can be executed with minimal time lapse and no requirement for warehouses at all. This will enable us to cut costs and execute projects efficiently.
On the technology front, we look at predictive analytics as the future. Hence, we are building solutions using tools from vendors like Alteryx, Qlik Technologies, and Tableau Software to help our customers do predictive analytics.
Mobile apps development is another major focus area where we are building new applications including horizontal apps like attendance system. In fact, we have deployed our attendance app, Teamworks, in our organization, which enables employees to work remotely with features like geo-location, ticketing, automated conveyance and online approvals. We have deployed this app for 3 our customers recently.
The mobile apps development complements our mobility division where we provide mobiles and tablets to our customers like Uber and Ola. Now, we have plans to offer our software applications and hardware combined as a solution-as-a-service. This will enable us bill on per user/device on a monthly basis and have a predictive and long-term revenue visibility. The monthly charges may range from Rs 500 to Rs 1200 per user/device depending upon the software and service level agreement.
Further, data security is another major focus area. We are tying up with data security vendors and ethical hackers to strengthen our portfolio and offerings. We believe that by just having data and network security can’t guarantee 100 percent protection; hence we need to do penetration testing through smart hackers to cross-check the efficiency of the security infrastructure. This way, we are ensuring end-to-end security for our customers. Moreover, we are setting up security operations center (SOC) and network operations center (NOC) to remotely manage and secure our customers’ data centers.
While public cloud is gaining popularity among small and medium businesses, large enterprises are still adopting a private or hybrid approach. What are the trends you observe among your customers?
While public cloud is gaining large acceptance among small and large enterprises, the trend is towards hybrid cloud with a combination of public and private clouds. Customers are willing to keep the non-critical workloads including backup and DR on the public cloud; hence storage is predominantly going on the public cloud. However, they keep the critical workloads like ERP and CRM in-house.
Further, public cloud space is offering added benefits like AI and machine learning, which requires intense capital investments in case of private cloud. For instance, Google cloud offers a quite strong machine learning and AI capabilities; hence quite a few customers are now opting for public cloud to leverage on AI and machine learning capabilities.
Systems integration for many partners is a shrinking business with lowering margins. How is Team Computers addressing this concern?
Gross margins in systems integration business remain between 10-15 percent for the last many years. Our return on sales is roughly 5-7 percent; however, the return on capital is quite good. With on-time and efficient project delivery, we are able to get the return on capital of about 40-50 percent. Hence, project management is a crucial element to improve margins.
Team Computers has been able to thrive in the systems integration due to our efficient project management capabilities. The idea is to plan and execute the project in a way that we are able to collect payments within 40-45 days to leverage on the credit time period. In addition, our wide presence with over 1500 employees, 25 offices, and 250+ support locations throughout the country enable us to execute multi-city projects in a timely manner.
Please talk about your business interests beyond IT.
Beyond IT, we are focused on hospitality business, where we have Qla restaurant and Zorba for events. These businesses are contributing Rs 10 crore each annually.
In addition, we are building a resort named Tatva Hills in Uttarakhand, where customers can not only stay but also buy villas. We don’t consider it as a realty business but as a great experience that we wish to offer to our customers.