Ready for the big leap

Pratime Harigunani

How’s the report card looking for the year gone by and what’s the score set next?

We have just closed this financial year ending 31st March 07 with revenues of around $29 million, doubling it over the last year’s performance. As we step into a new financial year, we expect to double the growth yet again and touch near $60 million in revenues by March end 2008. Headcount, that currently stands at around 850 people, also continues to grow. We are witnessing a lot of excitement in the US and our targets and ambitions look on track.

As a company that has chosen to play different with services in distinct areas like mortgage, banking, insurance and capital markets, is there anything fresh on your business and positioning strategy?

We have always positioned ourselves as domain specialists and our experience in the areas mentioned by you have served as the differentiator. This year, our strategy is to continue to function in the same domains but go a little deeper. Recently we have also added KPO services and RIM (Remote Infrastructure Management) solutions that would of course be in the same spectrum of domains.

Is your move into the consulting top-rung a new approach to business wins in the top-down dimension rather than the conventional bottom-up approach?

The move is still in its infancy but is picking up very well. We have four engagements in our kitty where we are serving some large clients. It will reflect good impact of high-end consulting on the existing stack of services by completing the entire ladder. This initiative will be more of a catalyst and we thus move up the value chain. From that perspective, it is a medium-up approach. Typically, clients tend to go with specialised companies that bring domain depth. There’s always someone at the top. With this, we can position any which way, since, we now have the entire basket to offer.

You have also forayed in the terrain of frameworks with two proprietary offerings in mortgage banking? Would you be upping the ante here?

Yes, that’s a path that will take us to building our own intellectual property and help our customers shorten the delivery times. Down the line this path may also lead us to building and marketing our own software products. Here we use all our experience gathered so far to find solutions for common problems in the form of these usable components. As of now, we will maintain and mature the two frameworks that have a tremendous amount of functionality within and are getting positive feedback too. Towards the middle of the year, we will identify new ones too.

Framework space is also a visible trend across the industry, so does its hint to a leap from the services end to the product side?

It is definitely a middle ground. That does not mean that all services companies will move to the product side but it is a good approach nevertheless as it shows a different level of maturity and knowledge of problems at the customer end.

How has the acquisition of 110 Technologies turned out? Would you look at the inorganic route often?

That’s a boutique-consulting firm from New Jersey that we acquired in February this year. It has delivered well for us and we have won four to five good contracts in the capital markets, so the results have started showing. Though we won’t be actively hunting for companies we would be open to good opportunities.

With an IPO in the offing, what changes, if any, would Synechron’s macro-strategy script undergo post the IPO?

It is in the thought-mode and is currently moving beyond the idea stage to materializing. We are in formal stages of discussions and exploring India and US listings both. A formal decision is expected next year, subject to a lot of parameters. The impact, from an operational perspective, (example – performance tracking, SOX implementation) has started manifesting, as we get ready for a new scenario if and once we get listed.

On the macro-front, investors may want us to diversify geographical risk, as we are still fairly dependent on the US. Exposure to the US hence might need to be relooked. Same diversification could also figure on the domains that we currently have in the form of addition of related verticals like telecom.

Have you started mitigating the geographical risk already?

Yes, UK has picked up momentum and we are doing business in new geographies like Australia and Hong Kong. The US still accounts for 90 per cent of our business, but has come down from 99 per cent last year. It has a dominance given the quick-return capability that other markets take some time to generate and which as a company with private resources and some limitations are a concern. But cash reserves from IPO can be put into new markets.

So Synechron’s appetite will keep growing?

Our DNA has been to double our growth every year which we have been doing. We will not stop at $60 million and would take the next big leap to $120 million and so on.

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