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Virtusa engineers efficiencies through innovation
Virtusa Corporation, an US-based outsourced software
engineering services provider, has chalked out an ambitious roadmap
for expansion of its technology centres at Hyderabad and Colombo.
Venkat Pulapaka reports
Global outsourcing has become a mainstream
business strategy for most enterprises. However, the harsh economic
climate and demanding customers have forced the South Asian IT services
industry to focus only on commoditised unit cost reduction. As a
result, the industry is replete with service providers who offer
the same cloned services such as low-end staff augmentation or legacy
code maintenance and whose only value proposition is to charge a
cheaper rate than their next-door competitor. However, this is not
the case with Virtusa Corporation, an US-based provider of outsourced
software engineering services, focused on engineering efficiencies
through innovation, productisation and globalisation.
Origin
"Since our inception in
1996, we at Virtusa have been clear about our goal: to fundamentally
change the way software is built," says Kris Canekeratne, chairman
and chief executive officer of Virtusa Corporation.
"We understand what it
takes to engineer cutting-edge software products that are ahead
of their time. Our understanding is a result of our seven-year track
record of building over 500 complex, industry-leading software products
and product-class solutions for leading software product companies
and Global 2000 clients," says Canekeratne.
Headquartered in Westbo rough,
MA in the US, Virtusa has advanced technology centres in Columbus
(US), Colombo (Sri Lanka) and Hyderabad (India). In addition to
these locations, Vistusa has offices in Boston, New York, San Francisco,
Atlanta, and Chicago.
The company has been co-founded
by Canekeratne in association with Tushara Canekeratne, the company’s
executive vice-president for technical operations, and John Gillis,
who manages key accounts and customer satisfaction. The belief of
the three that the software development industry pales in comparison
to design and development techniques used by mature industries like
automotive and manufacturing is at the epicentre of Virtusa’s core
value proposition: software productisation best practices that sharply
increase software engineering efficiencies.
At the time of starting the
organisation, the co-founders had raised $40 million through venture
capital funding and part of that was used to help the company grow
steadily.
Clients
With the help of Caneker-atne’s
stewardship, focused execution and a talented cadre of software
engineering professionals, Virtusa grew by over 50 percent in 2002
with a roster of outstanding long-term relationships with Blue Chip
clients. The company’s clients can be slotted into five broad verticals:
financial, software, manufacturing/transportation, retail and telecommunications.
Some of its clients are Bank One, Fannie Mae, CSFB, PNC Bank, Greenpoint
Mortgage, Pacific Exchange, Politzer & Haney, EMC, GE Power
Systems, Siemens, Lightbridge, Convergys, Kewill and Ann Taylor.
Virtusa offers full lifecycle
services—from product engineering to product-class enterprise systems.
This means the focus is more on product and application development,
application rationalisation, porting services, sustenance engineering,
integration services, and quality engineering.
Record growth
"The fiscal year ending
March 31, 2003 was an outstanding year for Virtusa and our results
validate the relevance and need for our unique service model,"
says Canekeratne. New client acquisition was a strong growth driver
during 2002-03, with over 20 new clients entering into multi-year
revenue relationships with Virtusa. "Owing to superior customer
satisfaction, over 80 percent of the company’s revenues in the recently
concluded fiscal year came from pre-existing clients," he adds.
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With its
rapidly growing client base, Bank One Corporation—headquartered
in Chicago, USA, and the nation’s sixth-largest bank
holding company—had a problem with its six separate account-opening
systems. It wanted a simpler account opening system that would
go beyond the simple process, as building a scaleable solution
was critical.
The solution
The Virtusa team was able to meet crucial time frames in the
midst of changing requirements, a narrow window of opportunity,
and the pressure of delivering a mission-critical project
to Bank One. The team created a platform that unified all
the six account-opening systems and simplified the whole process.
As a result of Virtusa’s established process, the joint
Bank One project exceeded all project objectives.
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Technology efficiencies
Virtusa claims its global clients
gain significant benefits of revenue acceleration, immediate cost
efficiencies and overall reduction in total cost of ownership through
better delivered software.
The company has honed its unique
engineering processes to leverage a globally distributed, world-class
engineering force to design, develop and deploy mission-critical
products. "We collaborate with our enterprise and ISV clients
through the entire product lifecycle to bring sound engineering
principles of customisable, future-proof software architecture and
asset reuse. We strive to build software that can evolve and change
as the underlying problem domains or user needs change," claims
Canekeratne.
One of Virtusa’s core engineering
competencies lies in ferreting out recurring functionalities and
patterns so that it can implement a proactive and pervasive asset
reuse strategy. Over time, Virtusa helps clients build a nucleus
of core platforms that can serve as a foundation across multiple
business environments and vertical markets. This process sharply
reduces complexities and increases engineering efficiencies.
Additionally, Virtusa’s advanced
technology centres located in three countries and its globally optimised
engineering teams allow the company to provide quantum leaps in
productivity, time-to-market and cost savings to its clients.
Hyderabad operations
The Hyderabad operations of
the company started in 2001 with just 60 employees. By fiscal year
ending 2003 the employee strength shot up to 463, up from 164 in
2002. "About 45 percent of our revenues come from Hyderabad
and in the next few years we hope this percentage will go up to
70 percent," says Canekeratne. Virtusa is today set to invest
another $11 million to expand its Hyderabad operations. These funds
will be spent on improving infrastructure and other areas. Further,
by March 2004 the company plans to go in for lateral hiring and
reach a headcount of 1,000 in Hyderabad, occupying a new facility
of over 1,00,000 sq ft.
Further, to sustain growth
the company is evaluating a second location in India, preferably
in South India.
Future plans
"As a trusted technology
partner, Virtusa has always focused on systematically increasing
software engineering productivity, mitigating technology risks and
building future-proof technology platforms for our clients. Our
growth is directly attributable to our unique business model, our
outstanding service quality and the dedication and devotion of our
employees. We are optimistic about the future based on the growing
list of satisfied, long-term Blue Chip clients and strong revenue
momentum. We will continue to invest in our ability to deliver increasing
value to our stakeholders, including our clients, investors and
our rapidly growing team of Virtusans worldwide," says Canekeratne.
As part of this initiative, the company is planning to invest an
additional $7 to 8 million to expand its Sri Lankan operations.
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Thought leadership
Virtusa has worked on the leading edge of technology innovation
and thought leadership. From its inception, Virtusa has built
skills, processes and a global collaboration methodology that
stimulates creativity and thought leadership. This is a core
part of its DNA and the company differentiates itself by the
way it thinks as much as by the services it provides leading
to engineering excellence. “Our thought leadership philosophy
is further exemplified by our people, who consistently apply
new perspectives and innovative thinking to the task at hand,”
says Canekeratne.
Insights
“At Virtusa we believe that in order to meet our customers’
needs, we need to thoroughly understand their business issues.
Our business and technical specialists actively explore industry
and functional practices while codifying the results into
knowledge assets. In doing so, they study the ever-changing
areas of enterprise application management, emerging technologies,
knowledge management, vertical industry trends and the evolution
of business strategies to create stable solutions, resulting
in products and solutions that become category leaders.
“This enables us to understand
our customers’ existing and future needs and be proactive
in originating initiatives. We share these assets with our
customers and prospects via a variety of media. Our core strength
is based on our ability to collaborate effectively with our
customers, identify their needs, apply our experience and
insights and build products and solutions better, faster,
and more cost effectively. We encourage feedback and exchange,”
says Canekeratne.
Research
Virtusa’s commitment to thought leadership is further
embodied by its dedicated R&D group. The Virtusa R&D
group is constantly looking for innovative ways to empower
delivery teams and work in unison to provide its customers
with significant value.
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