Mobile technology, enterprise content management, business process management, software testing and applications support are emerging areas in which Virtusa is expecting future growth. These are beyond the company's "normal bread and butter" offerings of IT consulting, application maintenance, development, systems integration and managed services capabilities, according to Virtusa General Manager Madu Ratnayake, who was speaking to the Business Times. Joining Mr. Ratnayake in his comments were Head of Delivery for Colombo Pragash Krishnamoorthy and green initiative leader, Associate Director Denver de Zylva.
Virtusa's local operations, consisting of 1,700 people, is one three centres based in Chennai, Hyderabad and Sri Lanka, and it accounts for one-third of the company's global revenue. A NASDAQ listed enterprise, Virtusa's global revenue for the first quarer (Q1) 2011/2012 was US$ 61 million, a 19% increase year-on-year. Further, its second quarter (Q2) 2011/2012 revenue is forecasted as between US$ 70.2 million and US$ 72.7 million, while its full year 2011/2012 revenue prediction is slated as being between US$ 280 million and US$ 292 million. Additionally, noted Mr. Krishnamoorthy, all centres were planned to grow equally and the only constraint to this is on the talent side, since Sri Lanka was considered, in a strategic sense, as equally important as India.
Mr. Ratnayake, also a Vice Chairman of local IT-BPO body SLASSCOM, further suggested that, as IT needed to expand beyond universities, with its enrollment limitations, the out-of-the-box idea of promoting IT as a career to O/L and A/L students was initiated by the sector, which was also a reason behind SLASSCOM's and Virtusa's recent agreements with the country’s 25,000 student strong Vocational Training Authority. Additionally, he added that a lot of work had been done to promote IT as a career by SLASSCOM, ICTA and other organisations with the result being a clear uptake in people seeing IT as a great career. And also that there are a lot more entrepreneurs coming up and a lot of young people who want to start their own ventures, especially compared to five years ago when there was hardly anybody who wanted to go their own way. Further, he identified this as a growing trend; a remarkable change, which has particularly come about only in the last three or four years.
Elaborating on the types of IT careers open to school leavers, Mr. Ratnayake suggested that software testing (also known as quality assurance) was one area for entry through vocational training, while graphic designers, and other professionals from the artistic side, were also sought after in the IT sector. He also highlighted, in the IT space of other sectors, careers in marketing, media, web, with graphics and website design. Additionally, IT support was also an area of ongoing demand with more and more companies offering these services to commercial and domestic clients, especially with greater adoption of IT at local companies. Agreeing, Mr. Krishnamoorthy noted that this was not a substitute for qualifications in the IT industry but, done in parallel to earning a degree, a fast track into the IT sector, four years early.
Meanwhile, according to Mr. Ratnayake, Virtusa's clients, many of which they say are Global 2,000 companies, previously looked at India only as a location for their development teams. This had changed and they were now also seriously considering Sri Lanka as they wanted to broad base their risk profile. Further, a real interest shown had been shown by them as demonstrated by a number of inquiries received significantly increasing. However, these clients were still restricted by the need to comply with appropriate due diligence protocols. He also added that, locally, the biggest growth shown to date was in the BPO sector. And, it was his opinion that a positive profile for Sri Lanka was still in the process of being secured.
Further indicated, 65% of Virtusa's clients were in North America, 20% in Europe and, an area that has actually see some growth; Sri Lanka has 5% to 10% of clients coming from the local sector. Mr. Ratnayake also signalled that the company had taken an active role in pursuing local business opportunities and, as such, was working with the government as well as some blue chip companies, all in an effort to bring global best practices to Sri Lanka. However, he did admit that a lot of local companies were still unaware that Virtusa offered its services in Sri Lanka.
Meanwhile, Mr. Krishnamoorthy suggested that, while outsourcing and BPO were well driven through India, the pace and growth of Sri Lanka's operation has kept up with India and clients visiting locally have not really seen a difference vis-a-vis the talent they saw at the local premises and the talent they saw at the India centres. He also added that Virtusa’s ‘mantra’ was to have 85% of leaders to rise through their ranks. Additionally noted, the calibre of clients, new technologies, etc. were all stunning. Adding to this, Mr. Ratnayake also indicated that working at Virtusa was like working for multiple companies. While Mr. De Zylva noted that, in house, there was even a process whereby employees could innovate.
While affirming that there was "immense" competition and price pressure, the latter of which is a top trend witnessed across the global IT industry, Mr. Krishnamoorthy also noted that Virtusa's clients valued the innovation and client experience they received from the company, with most of the clients, and especially the top 10 accounts, having worked with the company for six years. He also revealed that, uniquely for Virtusa, its clients as well as many of its top competitor's such as Infosys and Satyam were pushing for a little bit of diversity, or what is becoming known as the 'India plus one strategy.' And Virtusa benefited from being, out of all the providers in this area, the closest to India so travel, co- location, etc. was not a big hassle.
At the same time, Mr. Ratnayake also opined that, over the next three to four years, small and medium enterprises would be getting into outsourcing more, as this business model was now becoming viable for outsourcing as smaller countries like Sri Lanka would even take on small businesses of 100 employees while larger countries did not take them seriously.
Mr. Ratnayake also revealed Virtusa's most recent acquisition of ALaS Consulting, costing the company US$ 375,000 in transaction costs, gave the company an all-important capital markets capability, an important growth segment, as well as giving Virtusa apresence in the USA's West Coast. The latter also provided Virtusa with access to a lot of financial services companies while also complementing Virtusa's Banking Financial Services and Insurance (BFSI) offerings.
Adding to this, Mr. Krishnamoorthy suggested that acquisitions would only occur in areas where Virtusa chose not to build its own competency, with core areas such as Business Process Management being seeded internally. He also identified previous acquisitions InSource as being a consultancy for business re-engineering and ConVista as being a company specialising in SAP Enterprise-wide Resource Planning (ERP) implementations, while also noting that the most recent acquisition of ALaS signalled a deeper focus by Virtusa in the BFSI area. He also added that some of Virtusa's Insurance clients were already taking advantage of the services offered by InSource to re-engineer their processes, etc. as they were comfortable with the existing relationship and did not want to involve other vendors.
Mr. Ratnayake also outlined Virtusa's goals of "driving towards a social business" and its promotion via internal social devices, such as Virtusa's Facebook type Yammer social network, which is used for both work and play, drawing on the experiences of 5,000 Virtusans, to integrate the benefits of wikis and crowdsourcing and other global collaboration methodologies internally. Additionally, he noted that the company was in the process of determining how these Web 2.0 capabilities could help productivity as well as transparency within the company.
Further, he also highlighted the company's personal excellence programme whereby continual improvement was driven at a single individual level with each employee having a personal dashboard showing their specific performance, productivity, quality, number of defects, etc. as well as overall company performance.
IT to be included in next year's national environmental awards
Thanks to Virtusa's efforts with Sri Lanka's environmental authorities, there will be a section for IT companies in next year's government organised, national environmental awards, says Virtusa Associate Director Denver de Zylva.
Mr. De Zylva, who also noted that, by championing various green initiatives under its "Code Green" internal programme, Virtusa had saved 30% over three years. Also emerging, for the same period, there was a 31% cut in electricity related carbon dioxide emissions, 57% cut in air travel related carbon dioxide emissions and 19% cut in land travel related carbon dioxide emissions.
Further, a study by conducted jointly by Megaskills Research UK and Sri Lanka's Industrial Technology Institute had noted that Virtusa's total Sri Lanka carbon footprint for Financial Year 2011 was 2,624 tonnes of carbon dioxide equivalency per year, whie, per seat, this figure was 1.64 tonnes of carbon dioxide equivalency per year, per seat. In addition, Mr. De Zylva alluded to plans by Virtusa to, ultimately, record the personal carbon dioxide emissions per seat. |
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