The company has put in place a new team to scout for opportunities in new verticals and geographies in order to double revenue in two years
The Mahindra group's information technology unit is all set to focus on its next big target. With the merger of Mahindra Satyam and the rebranding of the combined entity, Tech Mahindra, complete, the action has now shifted to the company's bottom line.
C P Gurnani, chief executive officer of Tech Mahindra, is busy putting in place a new team and a strategy that will help the company reach $5 billion in revenue by 2015, or nearly double the revenue from $2.67 as of March 31, 2013.
Forming the underpinning of this new growth strategy will be the theme of digital enterprise-"connected world, connected solutions". Seven horizontal offerings called NMACSSS, for network, mobility, analytics, cloud-based solutions, security, social and sensor, are at the core of this new theme. Along with this, expansion into new geographies such as the West East, Africa, South America and Australia, in addition to the traditional markets such as the US and Europe, will also gain prominence.
Gurnani has already picked up an ace team to help him on this new course. Among his trusted aides would be Manoj Chugh, head global sales, V Srinivasa Rao, global head (NMACSSS), Manish Vyas, global sales head (telecom), G B Kumar, head (West Asia and Africa), Rohit Gandhi, head of A-PAC, Milind Kulkarni, CFO, and Manoj Bhatt, deputy CFO.
Meet the team
Chugh, an alumni of IIT Kharagpur, who was roped in from global storage and cloud player EMC, is said to be apt for the role of global sales head as he has worked on both the product and the services sides of the business. Having set his focus on winning large deals, he has accordingly restructured the sales team. "I did make some changes like how the sales organisation is measured within the company, how they should be trained, motivated and structured," he says. In line with the theme of digital enterprise, each vertical has a digital head. Within the sales team, a sub group of digital sales team has been formed which is responsible for identifying opportunities, building practices and winning deals.
Despite the challenges facing the IT industry from the slowing economy, Chugh says the scope for Tech Mahindra to grow is immense. "The global IT services opportunity is $900 billion. Within that, enterprise software is growing at around 6.5 per cent (annually), so growth is there. We are just about $-3 billion company; the headroom to grow is tremendous," he adds.
NMACSSS head Rao (popularly called VSR), has worked with TCS, Infosys and iGate, and is responsible for creating solutions that will help customers get closer to a digital landscape. "NMACSSS is a digital technology stack, an enabler that will allow one to see the theme of 'Connected World, Connected Solutions' coming true," he says.
Rao believes the contribution of NMACSSS, which accounts for just 6 to 7 per cent of the company's revenue at present, will shoot up to 15 to 20 per cent by 2015. The company has already created 45 digital enterprise solutions based on the NMACSSS stack targeting verticals like automobile, telecom, banking and financial services, retail, healthcare and pharmaceuticals, and energy and utilities. Rao is also looking at the acquisition route to grow Tech Mahindra's offerings via NMACSSS.
Heading the company's most important vertical-telecom-is Vyas. Vyas was earlier heading the AT&T account at Tech Mahindra and his role is significant as telecom was earlier handled by Gurnani himself. The telecom vertical contributes 47-50 per cent to the revenue and is at present one of the most stressed sectors globally. For Vyas, the task will be to ensure the vertical's contribution is maintained at the current level at least. "At present, my focus and my team's focus is to see that we maintain our contribution to the company's revenue and perhaps increase it. With revenue of $1.2 to 1.3 billion, we have one of the largest business units in telecom," he says.
Other than maintaining the status quo, Vyas will also focus on how the company can replicate what it has done with clients like British Telecom and AT&T. "Historically, we have managed to scale up our relationship with large clients. We do believe we have more such opportunities. We would be focusing on the top 50 accounts and work on them so that we can create similar relationship," he adds. However, he is aware of the challenges. A growth trajectory that one saw a couple of years back is no longer possible, "but customers will be growing, they will be investing in new network evolution and we will be aiming for that business," says Vyas.
In search of market
Tech Mahindra's entry into new geographies will be the key to making this happen. The person heading the West Asia, Africa and Turkey region, Kumar, has already beefed up his sales team which now has close to 400 associates in the region. "This region belongs to the rest-of-the-world category in terms of reporting. Rest-of-the-world's contribution to the revenue is 23 per cent; we are growing almost 50 per cent on a year-on-year basis," says Kumar.
For Kumar, who has worked with Cisco for six years and managed regions like A-PAC, Japan and China, the new mandate is unlikely to be a cakewalk. "This region is unique. It may not be a huge market but you see almost all the global vendors eyeing deals here, which shows the potential of deals coming from this region. The IT opportunity for the region from 2010-12 was $9 billion," says Kumar.
The reason why Tech Mahindra is banking on these geographies to boost growth is because of the build-up in infrastructure in these countries. This means there will be enough requirement for complex enterprise resource planning (ERP) and IT roll-outs. Within the region, Saudi Arabia, which has the largest budget for IT among all the West Asian countries, will be one of the big markets for Kumar. "We are well entrenched in regions like United Arab Emirates, Qatar, Kuwait, Dubai and Bahrain. We need to work in Saudi Arabia," he says.
From the looks of it, the company is leaving no opportunity untapped. Gurnani says mergers and acquisitions (M&As) will also be crucial to meet the $5 billion target. In an earlier interview with Business Standard, Gurnani had stated that 8 to 10 per cent of the $5 billion turnover will come through acquisitions. For this, the company will appoint two senior executives - while one will be involved at the corporate level to look at M&A opportunities, the other will drive the portfolio.
The two people steering this inorganic expansion will be Kulkarni, who was appointed as CFO, and Bhatt who has been leading the corporate planning (including M&A) and investor relations portfolio, and was recently given the additional responsibility as Deputy CFO.
Clearly, the team to power the next phase of growth for Tech Mahindra is all set and, as Chugh says, "it is now about our ability to execute. How we get in front of the customer and deliver is going to be crucial."
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