'Digital IT services will be our top revenue contributor in next 3 yrs'

Covid pandemic has brought in many changes among enterprises. As organisations go digital in the changed environment, demand for IT and BPM (business process management) services is on a rise. Conneqt Business Solutions, which is a leading IT and BPM services provider, is looking at cashing in emerging opportunities in the digital IT space. In a conversation with the Bizz Buzz, Arjun Ramaraju, CEO of Conneqt Business Solutions, said that the company has been building right talent base and partnering with many global technology firms to provide digital IT services to clients. The firm is eyeing majority of its revenues coming from digital IT segment in the next three years. The Quess Corp Group company also said that its focus will be in India, Middle East and the US with significant focus on India as most legacy IT firms don't have much focus on this geography.

How is the overall demand environment in the IT-BPM industry? How do you view all the talks of recession impacting demand?

If I look at it over the last six quarters and especially in the last 3-4 quarters, across the board, demand for technology and demand for business process transformation continue to be strong. This is because of two reasons. Broadly, every enterprise in the world wants to be a digital enterprise. Hence, there is demand for technology. Secondly, if you look at the business process management (BPM), the Covid pandemic has accelerated the demand for BPM services. Businesses have to transform themselves in terms of many aspects like how is their customer outreach.

In the retail, ecommerce space or BFSI space, when enterprises are looking to acquire new customers; cross-sell, & up-sell, they're looking at those business processes on the revenue side and also on the cost side. All of them are looking to optimise their cost, optimize their supply chain, and optimize their inefficiencies across the board. And all of them need more business process management work. So, the need for both traditional IT and digital IT services as well as BPM continues to be strong. As far as slowdown fears are concerned, I think, there is going to be some impact. But I think directionally, the demand is going to be there.

Conneqt Business Solutions is slowly transforming itself into a digital IT services company apart from being a leading BPM service provider. How has been the journey so far?

Conneqt has Tata legacy and by virtue of that, it has very strong foundation when it comes to values and people. Also, what Quess Corp has achieved in the last 15 years. The company has become the largest business service provider in the country. The mandate is how do we digitize Conneqt and thereby, become more relevant in the business process management space both in India as well as for international customers. More importantly, we have a strong focus on digital IT services. That is the primary mandate.

The journey has been very good so far. We have a team of almost 500 digital IT services staffers. Today, we have set-up a completely digital native IT services company, Conneqt Digital. Essentially, we are making a big foray into the digital IT services space. We have brought on board a number of senior talent from several companies. We have also set-up competency centres in six key digital areas. All of those are powered by very strong alliances from all the leading OEMs. We have about 15 key leading OEMs with whom we have set-up alliances to fuel our competencies. And I think, we have made a conscious effort in bringing good digital talent on board. So, the journey has started. We are already seeing a number of updates for our digital IT services across customers both in India and Middle East. We are slowly starting our endeavour to enter the US market. Over the next three years, our focus is to really strengthen this, both when in terms of people and solutions.

Which are the vertical that you will focus on for strong growth going ahead?

We have set-up six key competency centers which are powered by all our tech alliances. Now in terms of verticals, we have a very strong experience in the BFSI segment. If you look at Conneqt, almost 45 per cent of our business is from the BFSI segment. So, BFSI is a very key industry focus for us. The retail e-commerce is another key vertical for us. Auto manufacturing is another key industry focus for us. And finally, utilities are a big area. We are bringing utilities under the overall digital IT umbrella and we do a lot of work on the utility space today.

As far as contribution to revenue is concerned, our digital IT services is going to form a big component of our overall revenues over the next three years. We are looking at in excess of 70 per cent from digital IT services side. Currently, a significant part of our top line is coming from the legacy business means BPM services. But the shift has already started. The good thing for us is we continue to do very well on the BPM space as well. The business continues to grow very strong. In many ways, we are India's largest BPM services provider with a presence in about 20 cities.

IT-BPM industry is facing a huge employee attrition problem now. How are you managing employee churn issue in this high demand scenario?

Attrition is an industry problem, but that is something that all of us have dealt for decades now. So the problem of attrition in high demand scenario is going to remain and we all understand how to work along with it. The good thing is Conneqt has made it to the top-50 great places to work this year. So, it's a good position. We are in the top 50 in India. So, that means, we're doing a number of things right to be able to attract the right talent and give them a lot of opportunities within the company. We are consciously looking to enhance the employee value proposition and we will continue to strengthen it.

What is your view on operating margin as the company moves towards digital IT services?

I think, it is an endeavour to improve margins, but more importantly, it is also an opportunity for us to make an impact on digital IT services. The margin will improve, but at the same time, we can make a better impact in India. We are also conscious that in India, many of the traditional large IT service providers' focus on Indian enterprises are a little limited. So, there's an opportunity there for us. At the same time, we will look at taking digital IT services global. We are already doing it in the Middle East. We are starting to do that in the US. So, it definitely helps the margin. But I would say, in addition to margin, it is the impact we can make to customers. As every customer is becoming a digital enterprise, we are in a unique position to build along with the ecosystem of our partners. I think, it's a great value proposition.