Back in 1976 three ex-IBM employees came together to form CMS Computers, a company that today spans a range of verticals, right from systems integration, to traffic management, to smart cards. Chitra Padmanabhan traces the evolution of the company, right from the time it was a fledging in the industry to the giant it is today

R D Grover believes that the market for smart cards is beginning to explode, and CMS, being an early mover in this space, has a competitive edge over its counterparts

Till a few years ago, System Integration, (SI) was an unglamorous business, and most players did not like to associate themselves with it. The blue-eyed boy then was software. But with the US slowdown, the market has swung in favour of SI. Looking at the booming and stable SI industry, a host of players have jumped onto the bandwagon; hosting service providers, data centre players, network consultants and even EDP arms of companies are all getting into the act. At a time like this it is worth noting the achievements of a company which spotted the market for SI years ago—the Rs 330 crore CMS Computers—which occupies the top notch when it comes to the networking space. The activities of the company span system integration, training, smart cards and software services.

IBM’s exit from India in the late seventies paved the entry of CMS Computers, a company born out of the vision of three ex-IBM employees: R D Grover, S Ramadorai and Varun Prasad. The trio, realised that there was a void in the market for support and maintenance of IBM mainframes. This prompted them to start CMS in 1976 and lay claim to this space for the next four to five years.

The move up the value chain began after Rajiv Gandhi became the Prime Minister, with a change in policy and opening up of the market. When further liberalisation came in the form of the new software policy, which was implemented in 1986, MNCs were encouraged to set up base here and tap the Indian market with their products. CMS was quick to pounce on this opportunity.

Says R D Grover, chairman and managing director of the company, “We were quick to identify a trend in the market which was increasingly tilting towards mid-range systems from mainframes. To tap this space, we tied up with companies like Digital and Burroughs—importing their machines and providing maintenance and support.”
The next step saw CMS selling third-party peripherals like tape-drives, disk drives and printers. The company also formed a subsidiary, Systime, as a way to tap the booming business of software services. This phase saw Systime entering into an alliance with J D Edwards. The alliance made CMS the sole entity in India responsible for J D Edwards product licensing, implementation and training. Due to Systime’s efforts, J D Edwards is counted among the top players in the ERP space today.

In addition to Systime, there are a number of other Strategic Business Units (SBUs) which have made CMS a well known player in the Indian IT scenario.

• Solution systems & Network integration: This is the bread and butter business for CMS, and contributes 45 percent of the company’s revenues. Says S Ramadorai, director, CMS, “The network management space runs into crores of rupees, and is a steady revenue earner for our company.”
  Another key driver for CMS has been its expertise in large projects. A case in point is the project CMS did for Philips. CMS engineered a total integrated system for Philips based on IBM AS/400 with an enterprise solution from JD Edwards. This included setting up an extensive network linking the company’s factories and depots through VSAT links across the country.
• Card-based solutions: CMS provides end-to-end solutions based on smart cards as well as magnetic strip cards. This unit provides sophisticated card solutions for specialised niche markets, and includes incorporating magnetic encoding, digital imaging, barcodes and signatures on smart cards.
  The smart cards market in India is on the upswing, and a lot of solution providers are eyeing this space. There has been a proliferation of plastic cards, with individuals holding a variety of credit cards, debit cards, phone cards, access cards, loyalty cards. Simply put, a massive market to address and tap. This is where the concept of a smart card (which stores all personal data in its embedded microchip) holds tremendous potential. Grover believes that this market is beginning to explode, and that CMS (being an early mover in this space) has a competitive edge.
• Printing: CMS also offers a high-speed printing facility for clients suh as banks, which require such services on an on-going basis. Currently, CMS customers include Citibank, HSBC and HDFC Bank. Utility companies like BSES, BSNL and Bharti are also on the company’s client list.
• Security: CMS’s wide range of solutions includes Timekeeper, a computerised time attendance and access control system which has been designed by its in-house R&D team. The company claims to be the leader in this segment since it has installed over 1,000 such systems in about three years.

• The network management space runs into crores of rupees and is a steady revenue earner for CMS, says S Ramadorai

  Traffic management: What started in 1989 as a division of CMS, is now a full-fledged company, CMS Traffic Systems. According to Ramadorai, the basic idea behind this initiative was the need for applications of Information Technology to assess real-time situation of traffic flows. A feather in CMS’s cap is the emergency telephone system it has installed on the Mumbai-Pune Expressway. The Traffic Management business constitutes approximately 11 percent of the company’s overall revenue. (Another pioneering effort of this unit was the driving licence project implemented for Delhi and Bangalore.)
• Services: Services are the steady revenue earner of the company, and have been growing significantly over the years. This business contributes a healthy 15 percent to the company’s turnover. Under this segment, CMS provides support for diverse hardware platforms, and maintains a support base of 60,000 machines (both local and MNC brands) spread across the country. CMS also provides facility management services to banks like ABN Amro, Centurion, Citibank, HDFC, Standard Chartered, and Bank of America. (Facility management services enable organisations to proactively manage change within their facilities since the solutions are tailored to their IT infrastructure and objectives.)
• Training: CMS Institute is the training arm of the group. In the field of networking, it has a premium brand image among institutes. It offers courses related to field engineering, networking, telecom, the Internet, intranets, software applications and programming. The institute is also known for pioneering the nation’s first telecom engineering diploma.
• Outsourcing: Under this unit, the company hopes to cash in on the current outsourcing trend. In this space, CMS currently offers services like equipment leasing, disaster recovery, and plastic card personalisation for ATM, debit, credit, and ID cards. This segment has witnessed huge growth in the last two years as corporates have started realising the benefits of outsourcing.
• Cash management: CMS Securitas, a wholly-owned subsidiary of CMS Computers, was specifically formed to focus on cash management as its core business to serve both developing and developed consumer financial markets.
  This unit develops and implements the processes for providing efficient cash replenishment and deposit services with the ability to monitor and cater to the bank’s existing and expanding network of customers. Some of its clients include Citibank, HSBC, ICICI Bank and HDFC Bank.
• Storage: CMS has tied up with StorageTek for this segment, and provides a comprehensive solution for storage needs from primary disk storage and backup solutions using tape libraries to storage area networks and related storage management solutions.
• Energy management systems: This unit was formed two years ago with the aim of implementing energy monitoring and controlling systems. It helps organisations keep track of their energy usage, and devises measures to save energy. The company has successfully deployed an energy saving system for Hyderabad airport.

Future
Constant technological innovation can change the future of an organisation and help it leap ahead of competitors. CMS too is banking on this philosophy. The company’s R&D centres are located at Mumbai, Pune and Thiruvananthapuram. Each R&D centre concentrates on a specific domain.

For instance, Pune concentrates on traffic-related R&D, Mumbai works on smart cards, access control and kiosks, while Thiruvananthapuram carries out R&D in the energy management space.

For its future growth strategy, the company wants to position itself as a one-stop solution provider for all the technological needs of any organisation. With its system integration and smart cards business showing signs of exponential growth, CMS Computers is set to become a much bigger player in the Indian IT industry.