With the spotlight always on the big guns of the Indian software industry, the smaller players are often ignored. Rajneesh De takes a peek at what some smaller System Integrators (SIs) have been up to and finds that they’re all doing pretty well for themselves

According to Tulsiyan, Aakit’s zero-defect policy allows it to deliver the best solution at the first go

One positive fallout of India’s stupendous success in the software sector has been the emergence of a large number of system integrators (SIs). True, no one is yet to reach the dizzy heights of globally leading SIs like IBM or EDS or even an Accenture. No doubt players like TCS and Infosys do claim that they would reach such stature within the next five years, and all current indications do nothing to contradict their unbridled aspirations. What this means is that before this decade is out, there will be at least a couple of Indian players within the Global Top 10 SIs and possibly a host of others within the Top 50.

Such rosy projections, when realised, will surely earn India Software Inc a lot of kudos, and count for more than just brownie points on the global industry stage. But, unfortunately, it leaves one fundamental question unanswered, buried deep under all the hyperbole and euphoria. It’s indeed good to have large SIs with great pedigree, but how many clients in India can afford their steep billing rates? Not only the smaller clients, sometimes it would not be economically viable even for bigger companies to afford the top SIs, especially when the project involved is only a small one. It would perhaps make sense for these companies to shell out a huge amount to the large SIs for end-to-end solutions, but what happens in case they need only some quick-fix or modular implementation? It is in these cases that the smaller SIs come into play, and thankfully the Indian software industry now does have a fair share of them. We approached a cross-section of these smaller players, and were pleasantly surprised to find that most of them are doing quite well, despite all odds like the global recession, 9/11 or the current geo-political situation.

There could be no better gauge of performance of these small players than their current financial health and all the players we spoke to scored quite high on this front. InteractCRM, a Customer Relationship Management (CRM) solution provider for contact centres, grossed a revenue of around Rs 3.4 crore in 2001-02, while Enterprise Resource Planning (ERP) implementers like Aakit Technolgies and Nucsoft touched Rs 1.5 and Rs 1.6 crore respectively. Even a 2001 start-up like R2M Technologies—which in fact has developed a proprietary ERP solution—was able to bring more than Rs 10 lakh into its coffers. The future too holds a lot of promise: InteractCRM expects to touch Rs 5 crore in the next 18 months, Nucsoft Rs 2.4 crore in one year, while R2M expects to break the Rs 1 crore barrier. Even other players like Aakit and Octopus Systems, with its own ERP product, expect between 70 to 100 percent growth.

Kathuria of Octopus takes pride in 200+ ERP installations in India and abroad

ERP shows the way
ERP implementation, either as a service or as a shrink-wrapped product seems to be the flavour of the day and accounts for a substantial chunk of the revenue for most of these SIs. What that basically implies is that despite the presence of the big ERP vendors or major third-party implementers, the client base for even these smaller players can still be quite significant. Understandably, 70 percent of R2M’s and 40 percent of Octopus’ revenues are contributed by their ERP products. Reveals Neeraj Kathuria, director with Octopus Systems, “Our ERP product, Octopus-e is currently installed in more than 200 sites in both India and abroad.” Ditto with R2M, whose client list in fact explains the necessity for these smaller vendors. It includes names like Lastra Niraj in Mumbai, Cochin University and Jyoti Graphics in Navi Mumbai—clients for whom approaching the bigger SIs would have made little business sense.

It’s not only ERP, but with the advent of e-business, even SCM, CRM and Business Intelligence (BI) solutions are gaining popularity. 40 percent of Aakit’s revenues come from implementing e-business solutions, while for Nucsoft the figure ranges between 70 and 90 percent. InteractCRM, according to its president Ramesh Krishnan, not surprisingly owes more than 90 percent of its revenues to CRM solutions with the remaining 10 percent being contributed by BI solutions. It is also important to look at the pedigree of some of the clients these companies are dealing with. Aakit boasts of illustrious MNCs like Bayer, Clariant, Johnson & Johnson, Pfizer, and Procter & Gamble on its client roster; Nucsoft’s Indian client list includes names like Citibank N A, Reserve Bank of India and HDFC Bank.

Krishnan feels that InteractCRM’s project management skills and tight global delivery model have ensured quality service

Small is better
Cost benefit with low overheads is definitely the biggest advantage these smaller SIs bring to the table over their larger counterparts. Nucsoft’s CEO Arun Shekhar feels that for smaller integrators, the USP is the quality of services they render, at a fraction of the cost when compared to a larger SI. In addition, their processes and tools help them crash schedules and enhance throughput to deliver solutions within tight timelines and budgets. He gives a specific example to prove his point. “We won a project in the UK owing to our robust offshore model, which helped us to estimate a 16-hour work day.

This gave us increased throughput as compared to our competitors. Being an offshore development operation with low overheads, we were able to quote a keener price than our other India-based competition. We were also able to offer comprehensive services including hosting a 24-hour level-3 help desk in India for clients in UK. And lastly, the component model helped us to reduce the costs by re-using components developed earlier. Only a portion of the component cost was passed on to the client.”

Adds CV Rajan, CEO, R2M Technologies, “On the product front we have a clear advantage in case of SME segment, as we are able to provide most of the functionality required by the clients within their budget.”

According to Shekhar, quality of service at a lower cost has benefited the smaller system integrators

However, it would be unfair to categorise the smaller SIs as offering only a cost advantage. Ravindra Tulsiyan, CEO, Aakit Technologies, feels that the value proposition that these players bring to the table is their completeness of vision and the ability to execute. “The basic difference between our approach versus our competitors is that we become a part of our client organisation to provide a solution which not only meets their requirements but exceeds their expectations in terms of value addition and adoption of world-class practices specifically suited to their industry.” In addition, focus on a chosen technology platform is another big plus for these SIs. Adds Krishnan, “Due to our deep R&D and training capability, strong engagement skills and extensive management experience, we are in a better position to understand and execute on our clients’ CRM vision.”

Ensuring quality
However, all this talk about advantages should not divert from the vital issue of quality. Here again, most of these companies look to have stringent quality assurance processes in place. Nucsoft is an ISO 9001:2000 certified software developer. According to Shekhar, Nucsoft’s process orientation flows from a simple fact—world over clients prefer service providers who can deliver as committed, with deliverables that are fit for use in their business. “To help us meet this client need, we have designed, and implemented a flexible yet mature Quality Management System which covers all aspects of our service.”

R2M’s Rajan believes that most of the smaller SIs can deliver within the limited budgets of the SMEs

According to Tulsiyan, the basic philosophy adopted by Aakit is the zero-defect policy. It focuses on eliminating errors and quality problems at the source and always delivering the best-fit solution at first go. Says Tulsiyan: “We are in the process of implementing ISO 9000 and adhering to SEI CMM Level 3 standards. As a result we have been able to deliver more than 80 percent of our projects with zero defects. We ensure that all our projects strictly follow the Software Development Life Cycle (SDLC) process and that users are involved at every stage of the cycle.”

Adds Krishnan, “At InteractCRM, we have strong project management skills and a tight global delivery model with built-in quality checks at every stage. Clear project and work definition, experienced and talented resources, in-house training systems, stringent delivery control and extensive user testing help us ensure quality service.” Even the fledgling R2M plans for ISO 9000 certification in the coming 12 months.

In the ultimate analysis, this is the right time to laud the achievements of these smaller players. Not only have they reduced the implementation cycle compared to the bigger players, but have also devised a comprehensive methodology, which ensures fast trouble-free implementation. This has helped most of them to understand the customer requirements and translate them into cohesive solutions and services. The bigger SIs would dominate, no doubt, but the future looks bright for these fringe players as well.