Mastech’s Mascot goes global

When Mascot Systems was founded in 1993, it was a small offshoot of its parent company, the US-based Mastech Solutions. A decade later, Mascot is an established name in the competitive software services segment, and has also widened its presence in overseas markets like China and Japan. Abhinav Singh traces the company's remarkable journey

Few Indian software services companies can boast of credentials that Mascot Systems has achieved till date. Ranked 11th on the Nasscom list of top Indian software services companies, Mascot Systems boasts of an annual revenue of Rs 400 crore, with cash reserves of Rs 120 crore. From just 200 employees in 1993, it has 2,000 employees on its rolls today. It has a global presence in nine countries, including the US, UK, Belgium, Germany, the Netherlands, Sweden, Japan, China and Singapore. The company has five development centres—four offshore development centres in India, including one each in Hyderabad and Chennai and two in Bangalore—along with an offsite development centre in Toronto, Canada. It has over 80 customers, across verticals, worldwide.

The acquisition of BPO companies will help Mascot support customers in its strong verticals, says Viv Penniti

Mascot’s milestones
Mascot commenced operations in the early 1990s. The company’s first and most important break came in January 2000 when Mascot’s parent company, Mastech Solutions, got renamed to iGate Corporation. As part of the restructuring exercise, iGate decided to form 10 entities from the larger pie and it became only a holding company. Mascot Systems was renamed as Mascot Systems Private Limited and iGate’s businesses in Japan, the Netherlands and Singapore came under its fold.

Mascot started billing for customers directly at this point of time. Another important turn came when the company was listed at the BSE, the NSE and the Bangalore Stock Exchange in June 2000. (The public now holds 10 percent of its shares. The company has 2.7 million shares floating in the market.) After that there was no looking back. In November 2002 Mascot acquired two companies—US-based eJiva, an iGate Corporation subsidiary, and the Hyderabad-based Aqua Regia—which provided offshore services exclusively to eJiva. The two acquisitions were aimed at complementing Mascot’s expertise in the fields of enterprise application services, data management and integration and business intelligence practices. The acquisition also helped the company provide computer telephony integration expertise to call centres across the globe. It also brought 145 new clients and over 1,750 technical employees along with eJiva’s 50-seat development centre at Toronto, Canada, into Mascot’s fold.

The next milestone came in January 2003, when it became the first Indian company to receive the BS7799 security standards compliance certification from KPMG UK.

A 6-member team from KPMG UK audited Mascot for security compliance, covering all critical systems, applications, networks, telecommunications links, HR and information assets. During the same month the company’s development centres in Bangalore and Chennai achieved SEI-CMM Level 5 certification too.

Main practices
The company has six specialised practices: financial services, business intelligence, asset management, embedded systems, implementation support and ERP upgradation, and data management. The company has specialists who provide implementation and consulting services to its customers in the six specialised practices.

Mascot has a strong presence in the banking, financial services and insurance (BFSI), retail, distribution, telecommunications and service industry segments. About 40 percent of its total revenues accrue from the BFSI segment and 30 percent from manufacturing. Recently, the company also forayed into the healthcare vertical with hopes to gain substantial marketshare in the
segment.

Geographies
The company operates in nine countries across the globe, and has a strong presence in the US, which accounts for nearly 60 percent of its revenues. Mascot employs nearly 60 sales and marketing personnel in the US.

Europe and the Asia-Pacific region—especially China, Japan and Singapore—account for the rest. Japan contributes 12 percent of the total turnover. Mascot recently stepped up its presence in China by establishing a wholly-owned subsidiary in Wuxi, near Shanghai. The Chinese operations primarily cater to the Japanese market. The company also recently established its presence in Australia, with the opening of an office in Sydney. Germany is another country where Mascot has a strong presence, with six customer visits by some top German vendors materialising recently.

Mascot Systems has nearly 80 global customers, spread across different verticals, including 27 Fortune 100 companies. General Electric is one of Mascot’s largest customers; it provides expertise in the fields of business intelligence and data management to GE. Apart from this the company has plans to acquire customers in the healthcare and life sciences verticals as well.

Leveraging on the local workforce in China and Japan has given a thrust to Mascot’s growth in those countries, says Sundeep Gandhi

Challenges
Viv Penniti, joint-CEO of Mascot Systems says, “The greatest challenge that we face is the contingency factor, which has prompted us to look for alternative destinations, including China, Japan and the US. Secondly, there are a lot of large multinational organisations foraying into the Indian market, which are giving us tough competition.”

Penniti points out that Mascot says its concentration on providing specialised services across strong verticals helps the company face the competition with confidence.

Dwelling on the contingency factor, Penniti underlines that the setting up of a wholly-owned subsidiary in China is a step toward looking for alternative offshore destinations, without restricting Mascot’s operations only to Indian centres. The 50-seat eJiva development centre at Toronto, which came as part of eJiva’s acquisition, can also provide alternative backup services in case of any crisis in the sub-continent.

Future focus
A key focus area in future would be to acquire a few more companies that are specialised in Mascot’s strong verticals. These acquisitions could include a couple of Indian business process outsourcing (BPO) companies. “The acquisition of BPO companies will help us support our customers, especially in our strong verticals,” remarks Penniti.

Apart from this, keeping the contingency factor in mind, the company would continuously focus on looking for alternative offshore destinations. As Penniti points out, “Suppose a conflict breaks out between India and Pakistan, or if there is any terrorist attack, it may really affect our business. For this we have to have alternative offshore destinations to face any kind of emergency.”

Shedding more light on the contingency factor, Sundeep Gandhi, business analyst at Mascot Systems says, “We lost more than 300 of our billing consultants after the September 11 terrorist attack in the US. Although we have been able to make a steady recovery and now have more accounts than we had lost, we keep on looking for alternative offshore destinations to tackle any kind of eventuality.”

Dwelling on Mascot’s expansion plans in China and Japan, Gandhi adds, “We have employed a local workforce in Japan and China to be more effective in these markets. As language is a major barrier in these countries, it helps to employ locals. Leveraging on the local work force has really given a thrust to the company’s growth in the region.”

Mascot sees huge potential in the region and has plans for further expansions in the near future.