ICICI Infotech dares to be different

While most Indian software companies have settled for the software services space, ICICI Infotech has been looking at products—and predominantly through the acquisitions route. CHITRA PADMANABHAN explains how the company is treading a road less travelled

According to MANOJ KUNKALIENKAR, ICICI Infotech‘s core philosophy is to rapidly fill niche areas where it does not have products, and to establish a presence in geographies where it does not have a presence

DURING the boom phase of the nineties, most software companies were happy milking the then lucrative and high-margin software services field. But it was a different game for product companies, who had to do a lot of groundwork in terms of assessing market needs and cultivating a niche for their products. In order to survive in the product space, companies had to develop strong domain knowledge and a good understanding of the processes involved in the sector.

Against this backdrop, ICICI Infotech’s affiliation with ICICI Bank enabled the company to specialise in products from the banking and finance domain. Though it had all the requirements in terms of infrastructure, people and domain knowledge to develop products on its own, ICICI Infotech decided to use this expertise to add value to third-party products rather than develop new products.

“In the mid-nineties conditions in the IT industry were conducive to rapid growth. We did not think it sensible to slow down our growth process by engaging in building products from scratch. Instead, we decided to acquire existing products that fitted into the banking and finance domain and add features to them,” says Manoj Kunkalienkar, executive director and president, ICICI Infotech.

Dual strategy

ICICI Infotech’s earliest acquisitions included Ajax Software Solutions and Insyst Technologies, and were purely meant for gaining intellectual property in the banking products and insurance solutions domain. In countries like the US and UK, India is looked upon as a services specialist, so selling products there is not an easy proposition in terms of mindset and profitability. To achieve quick acceptance for its products, the company had to look for markets in countries having a limited services base.

ICICI Infotech accordingly aligned its acquisition philosophy with its plan to expand into different geographies. Explains Kunkalienkar, “Using our banking experience and through selective acquisitions, ICICI Infotech has been able to move ahead rapidly, both in terms of adding new clients to our portfolio and also by moving into new geographies such as the US, Europe and the Far East. Our philosophy is simple—rapidly fill niche areas where we do not have products, or establish a presence in geographies where we do not have a presence.”

The inorganic route ensured immediate scale in operations. In addition to acquiring IPR (intellectual property rights), the company also absorbed all technical people working on those products. Today, the company boasts of 700 clients in segments like manufacturing, retail, distribution, contracting, banking, finance and insurance. This list includes reputed names like Deutsche Bank, Seylan Bank, Bank of Ceylon and Dow Jones.

Product teams

The company’s product portfolio includes Kastle, a treasury solution; Pinnacle, an asset and liability management solution; RiskFree, a risk management system; Newton, a core banking solution; and Triton, a Web-based loan origination solution. It has not only successfully built an impressive product portfolio, but has also tackled various formalities and internal adjustments that go into acquiring any company. For instance, the responsibility transitioning new staff who came with the acquired company. “We ensured that work on the products continued by absorbing the entire product development team, and gave a sense of continuity by enhancing the features of various products,” explains Kunkalienkar.

Industry circles opine that when a company builds its own IPR, it is better equipped to provide support facilities. In short, the technical staff have greater skill and knowledge to carry out customisation of the product. ICICI Infotech was keen on building a healthy confidence level among its customers by recruiting people who had been involved in the process of building its various products. Thus, the company benefited from inorganic growth, and at the same time created the infrastructure necessary to position itself as a products company.

In early 2002, ICICI Infotech acquired the IPR for a product called Triton from Apnaloan, which is in the business of sourcing loans. Triton is a tool that enables banks and other financial institutions to trace potential customers. For instance, if a person is looking for an insurance policy that suits his needs, he logs on to the website of the company, checks out various policies, and gets an idea of the premium to be paid by him. The system compiles these details and directs them to the sales department so that the sales team is able to establish contact with the potential customer. ICICI Infotech has struck a major deal with Standard Chartered Bank in India and Malaysia for this product. Triton will support the bank’s mortgage and auto loans business of secured lending, as well as personal loans under unsecured lending.

Future

ICICI Infotech is continuously looking at enhancing its product offerings to clients, and has built an extensive portfolio of products to meet business requirements. “We expect around 50 percent of our topline in the next two to three years to come from product offerings that we have in the ERP, banking and insurance space. For the financial year 2003-04, around 25 percent of the company’s revenue will come from products, so we are on schedule to meet our targets,” says Kunkalienkar. Apart from its current product and service offerings in the BFSI space, the company is looking at tapping the telecom vertical in future.

chitra@expresscomputeronline.com