We Are Focusing On Expanding In The US: Arvind Thakur

From spreading IT literacy across the country to exclusively providing IT solutions to India Inc, NIIT rapidly grew big. Its IT arm, NIIT Technologies, has been working on some ambitious projects, especially in the travel sector, this year. In an exclusive interview with BI India, Mr Arvind Thakur, CEO, NIIT Technologies talks about the company’s key strengths, the future of IT industry and the challenges faced by it. Here are some excerpts:

From computer training in 1980s to offering software services to different sectors in the country, how has the journey been till now?

As NIIT went about establishing the foundations of IT literacy in India, it drew under its umbrella both individual as well as corporate learners. Seeing its corporate customers grapple with IT deployment issues, the company initiated steps to go beyond its training mandate and help its clients understand their IT needs, pick the relevant technologies and assist in the implementation. While it is well known that NIIT pioneered the concept of computer training, a lesser known fact is that NIIT also pioneered the packaged software distribution business in India.

The 1990s represented a turning point for the company and the country. It was a period, when faced with an acute foreign exchange crisis and oil-pool deficit, India was looking at globalization. It was then we embarked on its overseas journey, towards the world’s largest market, the US, and towards Singapore, an IT-savvy nation in need of technology solutions. It grew its software business globally thereafter on the back of the e-Commerce boom.

The year 2000 experienced the dot com meltdown. Companies focussed on e-Commerce were severely impacted which called for the organization to reinvent itself. In 2004, the software arm of the company was spun off into an independent entity, which is now NIIT Technologies Ltd.

NIIT Technologies caters to several industries. Could you please tell us which are your key strength areas in terms of
revenues? (Kindly share some estimated figures if possible)

NIIT Technologies has metamorphosed into a global company with operations across all major geographies. We compete on the strength of our specialization. This has come about as a result of our sharp focus on serving select industry segments.

Travel and transportation contributes to 37% of our overall revenues and is a segment where we have a strong presence. We are among the top 3 amongst our peers in this space by virtue of the deep domain knowledge and investments in technology platforms in this space.
BFSI contributes to 34% of revenues where we have a leadership position in certain sub segments like Commercial Insurance by virtue of our investments in mission-critical platforms.

We have made inroads in the Auto industry in the manufacturing sector, which contributes to 7% of revenues. Our strong specialized solutions in Geographic Information Systems positions us uniquely in the Government sector.

We have a simple strategy; to “focus and differentiate”. The strategy for each segment remains the same i.e. build deeper specialization and compete on the strength of this specialization. Through our service vision “New Ideas, More Value” we are constantly innovating to provide exceptional value to our customers.

Airlines, auto, insurance, logistics haven’t performed well in the last three years especially in the last year. Did the slowdown in these sectors impact your company? What is your forecast for these sectors in the coming months?

Each industry is unique in its spend on technology. The Airline industry has used technology to help it navigate the challenges of the environment and in fact we have seen good growth in revenues from this segment. Insurance has a more traditional outlook and tends to cut back on technology spend during difficult times. In the Commercial Insurance space in particular we have seen some stagnation in technology spend as a result of the increased number of catastrophes witnessed in the last few years.

As the global markets recover from the economic slowdown, we’ll see these sectors improve on their performance. The latest data released by the IATA earlier this month indicates that global passenger traffic has been showing a pick-up in demand and that the global air freight market too is witnessing continued growth in air cargo volumes. Confidence levels within the insurance industry, appears to be gradually improving.

The industry research firm Celent in a recent report observed that there is renewed optimism among UK insurers which is starting to result in increased activity. Recent PMI data finds signs of a renewed upturn in emerging market economies, which account for much of global manufacturing, with business activity growing.

According to the current scenario, SMAC is being touted as the future of the IT sector. How far do you agree with the statement? Do you expect SMAC to grow big in the Indian market? Do you also expect SMAC to turn the fortunes of IT industry?

A whole new set of opportunities are being created by SMAC collectively known as Digital Services which are expected to drive 25-30% of incremental revenues for the IT sector over the next 5 years. Indeed these emerging technologies are expected to turn the fortunes of the IT industry. These are disruptive technologies, which will impact different industries in different ways globally and provides a huge opportunity for the IT Industry.

In India, there is an enormous unmet demand for basic goods and services hampered by high inefficiencies. SMAC and other emerging digital technologies like IoT (Internet of Things) can help the country address these challenges. However, lack of infrastructure which includes bandwidth and network coverage, and also low digital literacy is a hindrance. Prime Minister Modi’s “Digitial India” initiative holds the promise to change this which will create another big opportunity.

NIIT Technologies also offers cloud and mobility services. Kindly tell us which sectors are the key users of this service? Could you please give us some specific examples of the kind of solutions offered by the company?

NIIT Technologies provides Enterprise Mobility solutions, Enterprise Mobile Device Management (MDM), and Enterprise Mobile Application Management, across industry verticals: Travel and Transportation, Banking and Financial Services, Insurance, Manufacturing, Media and the Government. With its deep domain knowledge and technical mobility insight, NIIT Technologies offers a powerful approach for determining and executing a practical and useful mobility strategy to the enterprises. We provide end-to-end tailored services that deliver key Cloud benefits to the customers across our focused verticals. The company works closely with its customers to understand their business needs and deliver business agility, scalability, and flexibility, in a robust and secure environment.

According to you, what is the future trend of the Indian IT industry as well as what are the challenges in this sector?

The IT services market will be reshaped by consumerization and digital business transformation opportunities. Customers seek outcomes and experiences while companies sell products and services. Digital Services provide the opportunity to craft new experiences. It has the potential of disrupting existing business models.

Investments in technology will continue to rise dramatically, led by services. However, there is likely to be a dramatic shift in engagement from “traditional on premise” services to a “sharing and marketplace” world. The enterprise of the future will embrace Digital Services like never before creating customised digital products, disrupting channels through digital disintermediation, driving data-driven decisions using big data and analytics, and creating end-to-end digital processes.

This will pose challenges for the industry as the mind-set of the work force will need to change from being doers to become problem definers. The world will have fewer high skill workers for the new roles created by Digital Services requiring significant talent development. The enterprise of the future will require the industry to change course from traditional IT to embrace platform-based services and the cloud.

Lastly, kindly tell us about the company’s expansion plans in the current fiscal year as well as the next five years in terms of investments, recruitment among others.

With the economy showing signs of recovery the company has put renewed emphasis in expanding its business in the US. To this effect it had engaged a global adviser to put in place the right framework and practices to drive its full potential in the geography. We also see Infrastructure Management Services as a significant growth engine and have carved out this business as a separate business unit to give it the right focus.

We believe we have an opportunity to assume a leadership position in Travel and Transportation segment and we are focussed on a significant number of large deals in this sector. Offerings around digital services have been created to service the enterprise of the future.
Going forward, we will continue to build strong specialization in the industries we serve which would include inorganic initiatives to acquire appropriate assets that will strengthen our position in these sectors.