"Data­mat­ics is ex­tremely bullish on the new dig­i­tal wave"

Rahul Kan­odia Vice Chair­man & CEO, Data­mat­ics Global Ser­vices Ltd.

Dalal Street Investment Journal - - COMMUNICATION FEATURE -

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.

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