The all-seeing i

Indian software firm 3i Infotech has made great strides in the business applications space. And as managing director Hari Padmanabhan reveals, it plans to move into other sectors

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By  Diana Milne Published  March 19, 2006

|~|Hari3ibody.jpg|~|There are more acquisitions in the pipeline, reveals Hari Padmanabhan, managing director and president of 3i Infotech.|~|While the likes of Oracle and SAP compete for attention in the business applications arena, there are a number of other large firms in this space, which offer users a range of solutions. One such company is Indian software firm 3i Infotech, formerly known as ICICI Infotech, which has a presence in five continents and serves customers in 45 countries around the world. IT Weekly speaks to Hari Padmanabhan, managing director and president at 3i Infotech, about the company’s plans for the Middle East. Firstly, can we ask in which regions and in what sectors has 3i Infotech experienced the most growth? The Middle East has been an important growth area for us. In the last three years we have doubled our revenue in the region. We are among the top three players [for business application] in the Middle East and North Africa (MENA) region according to [research company] IDC’s figures. This gives an indication that we are a regional player who really started here and has come to a certain critical mass and can now be compared to the larger global names. That gives us a good point of entry to the new markets that we are going into, for instance we are strengthening our operations in Saudi Arabia at the moment. In Africa we have entered a number of new markets, Nigeria for example is a significant area for us there. Central Asia is also important to us. There we have seen major wins are on the banking side. In the last year, the banking sector has also been strong in this region. Having established yourself as a provider of enterprise resource planning (ERP) software and solutions for the insurance sector you are now branching out into anti-money laundering solutions and stock broking software. Can you tell us more about this? Our product iBOSS is a comprehensive solutions suite for stockbrokers and traders, giving them absolute control over the entire trading process from order to settlement. It efficiently streamlines and integrates all your operations spanning front-office, risk management and back-office. We have 40-odd companies who have registered their interest in this product. Our first customer for this product is the Al Rostamani Group. Our anti-money laundering solution is a product we are bringing into the market place again, to enable banks to comply with requirements to ensure they have sufficient checks in place to monitor and prevent money-laundering activities. This is a strong area for growth and because the central banks in the Middle East have asked banks here to put measures in place, they need to adopt solutions. It makes sense for them to adopt a solution that is ready and available now. What are the other stock broking products on the market in the Middle East? I would say, there aren’t any of any significant nature that we compete with on a strong basis. What makes our product stand out is the sophistication with which it is built to cater to the expansion that can happen in the product base that is supported by the exchange. If the broker only goes for a system that only caters to today’s requirements then when the market grows and goes to the next step he will have to change and shift to something else which is both time and cost expensive. Who will be your biggest customers in the Middle East then? What sectors are you focusing on? We think that if you look at the ERP segment the mid-market is where the most potential is. The mid-market space wants solutions with the same capabilities as those used by the larger organisations but it wants to pay less money and get the job done in a quicker time. It doesn’t want to really pay huge amounts for consultants to come and tell them what needs to be done. It wants something where the business processes and best practices are built- in. So what we are really doing is to address specific verticals where we have strengths. At the moment we are focused on specific verticals like IT distribution, food manufacturing distribution, chemicals, paints and pharmaceuticals. These are areas we are currently addressing. What direction do you see the market heading in? We think the market will get more confident in certain areas of business with the market opening up more, with more of the global players coming in to countries like Saudi Arabia. We expect that there will be a lot more competition at a higher level. Your main competitors in the region are probably SAP and Oracle. How much of a threat do you believe these companies to be? In the insurance space, they are not really a threat to us. Businesses now are looking to invest with partners they know will be with them in the long term. We have customers here who have been with us for 15-20 years, which is a major bonus. They started with the first version of our product and now they have the current version. We have given them a growth path — a path where they can stay with us for a long period of time. And this is fundamentally important today. So in terms of our size, the critical mass of customer base we have, the fact that more than 55% of the premium written in this region is written using Premia —these are all great comforts to our prospective customers. So we believe that we are significantly ahead of the competition in terms of being able to compete on quality, on a service level, on what we offer in the product, on real value to the customer not just on price, with everything else you talk about. How can we expect your products to develop in the future? I think we will basically be responding to the shifts and changes that are happening. I think at this point I would say that, from a perspective of the technology, our products are on a level curve. In the last two or three years we have worked in a variety of markets, we have listened to customers in those markets, we have worked with business analysts and IT analysts, in the case of insurance with actuaries and learned about the complexities around how businesses operate. We have brought that back into our product design and I believe we are now in a position to really provide a whole business process. I think eventually the market will mature to ask IT solutions providers to be experts in their specific verticals. At the moment there’s a trend for software companies to consolidate. Do you think you are a company that perhaps could be acquired or do you think you will be acquiring other firms? We have acquired three companies in the last six months and I can share with you that there are more in the pipeline. Our growth strategy is very very clearly defined as both organic and non-organic so acquisitions are part of our growth strategy. ‘I don’t know if you are aware but I am sitting here because [my company] was acquired by 3i Infotech. That will continue to happen and we are very clearly focused on acquiring companies that will enable us to deepen and enlarge our strategy. When I say deepen, that means going into a specific business area, adding a product that is complementary to what we are doing — like we did with the capital markets strategy and iBoss. What kind of products do you hope to add to your portfolio through acquisitions in the next year or so? I don’t know exactly, but I do know we need to complement what we have. I can tell you that, most immediately, we would look at organisations that have strengths in areas that are in the financial market space and we would also look at companies in Europe that can give us a quick entry into the insurance and the financial markets in Europe. How close are you at the moment to completing any acquisitions? I can tell you that it’s a continuous process and as and when we are ready to announce this we will do so. But you can expect most definitely some announcements in the coming quarter. ||**||

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