"Datamatics is extremely bullish on the new digital wave"
Rahul Kanodia Vice Chairman & CEO, Datamatics Global Services Ltd.
Datamatics has recorded impressive numbers in FY17. Which of your strategies do you think worked out best for your company?
Datamatics has witnessed balanced growth in FY2016-17 across focused verticals, geographies and business lines as the company sought new opportunities for digital transformation. We attribute this success to our fundamental belief in aligning our business goals and objectives with those of our customers.
We believe that it is our unique client partnership model and our focus on understanding the client’s business challenges to provide smart solutions that has enabled us to not only get new clients on board but also expand our existing partnerships.
Datamatics’ emphasis on account mining has also shown a positive movement and we have seen a lot of interest and significant traction in the areas of Robotics, Artificial Intelligence (AI) and Machine Learning, which is proving to be an important differentiator.
Another step that we took this year to support the growing business of our clients was to invest in new domestic and international facilities, including an office in Kansas City, a subsidiary in
Philippines and ramping up operations in Puducherry. The key thrust area for us in FY2018 as a business is around cognitive systems, robotics and automation for which we have made new technology investments, and with the sector growing and creating new opportunities, we are wellpositioned for the years ahead.
What will be the effect of changing H-1B policy in the US on the Indian IT sector in general and your company in particular?
The Indian IT sector is well-recognized as a global outsourcing hub and our IT services have high brand equity worldwide. While there would be a marginal short-term impact on the industry, we believe that it would cause companies to think beyond onsite services, consequently giving an impetus to more offshore activity.
Currently, companies are taking steps towards building a local talent pool organically and then explore global talent to supplement it. We believe that the company’s operating models should be collaborative and visa neutral.
The change in the H-1B policy will have no impact on Datamatics as our H1 population is under 0.5% of our employee strength and our US staff members are local Americans. We have adopted this model for over a decade and have found it to be very effective in servicing our US customers.
‘Smart automation’ is being termed as the next big thing in your industry. How is Datamatics placed to make strides in automation space?
Datamatics has been a pioneer of Robotic Process Automation in India and is the only Indian company to have its own product and IP in this space. Datamatics’ awardwinning proprietary product Trubot has helped organizations build a positive ROI by automating their labour intensive, repetitive and rule-based processes. Through its smart solutions, Datamatics has been closely working with banks and insurance companies to automate and transform their back-end processes, which has led to significant increase in productivity and accuracy. Additionally, the company is working towards integrating artificial intelligence into our product Trubot which gives it the ability to process natural languages, leading to reduced manual intervention and increased efficiency. The emphasis will remain on some key thrust areas revolving around automation, mobility, text analytics and cognitive technologies such as AI, Natural Language Processing and Machine Learning.
Datamatics’ core operation focuses on “Data to Intelligence”; i.e. leveraging data to extract intelligence and patterns, thereby facilitating smarter and quicker decision-making. We have a fourpronged agenda of providing fully integrated offerings through Smart Processes, Smart Systems, Smart Devices and Smart Data; and this has been a significant differentiator for us.
Datamatics has made considerable strides in the AI and automation space, supporting organisations in making their critical business functions more efficient. Datamatics also foresees greater demand and growth in device centric businesses including IOT, mobility, and self-service kiosks, among others.
What are the key growth challenges for Datamatics in the next 3-5 years?
Datamatics believes that every challenge brings with it new opportunities and with that comes new risks; but it is for us to seize these opportunities.
With the growing demand for new digital technologies and the dominance of the IT sector, Datamatics is extremely bullish about this new digital wave and has already started witnessing keen
interest from customers across sectors. The major concern that we see is that companies are a bit apprehensive about adopting these new technologies and making large investments in digital which may require some additional skill sets. However, we do see that changing gradually especially in banking, financial services, and insurance, transport and logistics as well as retail sectors.
Datamatics recently acquired major equity stake in Techjini Solutions Private Limited. How is this going to help the EPS of your company?
As you are aware, enterprise mobility has gained significant momentum with companies adopting ‘mobile first’ as a core strategy for their business and cloud platforms. Techjini is a domestic software services company with a presence in key geographies and has a specialized focus on enterprise mobile application development. With 250+ employees,
Techjini caters to companies across business verticals such as media, engineering, manufacturing and start-ups.
Datamatics’ partnership with Techjini will further enhance our mobility offerings, improve our revenue and create a niche that will help us gain a competitive advantage. The objective is also to jointly tap more opportunities in newer market segments and offer a wide array of integrated services to our clients who can reap the benefits of this alliance. For the past three years, Techjini’s revenues have been growing at a CAGR of over 50%, and in FY17, the company posted a revenue of INR 350 million. The acquisition is EPS accretive for Datamatics.
Most of your revenue comes from foreign clients. Do you think that the digital push given by the current government will help improve your domestic revenues?
Datamatics has been extremely positive about the recent innovations in the IT industry. We are witnessing increasing interest from our customers in Robotics, Advanced Analytics, Cognitive Technologies such as AI, Machine Learning and Pattern Detection, as well as Mobility, IOT, and Cloud. We see a distinct increase in interest from our domestic customers and a willingness to invest in new, emerging technologies. Although we see good growth from domestic customers, we will not de-focus our energy from our international customers, as that segment continues to be our core base and is seeing good growth as well. Going forward, we will continue to refine our innovation strategy and bring in more data-centric business models. Our focus will be to further harness the emerging technologies such as AI, robotics and analytics to further enhance user experience and generate greater value for all our stakeholders.