Spotlight

Looking beyond banking

Paradyne Infotech has carved a niche for itself in the BFSI segment— particularly among its mid-sized companies—and with an IPO in the offing, it is looking to make an entry into other verticals, finds Shivani Shinde

Paradyne Infotech started developing software solutions on the Oracle and Developer 2000 platforms, and from there it moved onto system integration (SI) and networking. Today it is a Rs 70 crore company with a development centre and a 100 percent subsidiary in the US named Sundune Corporation.

As a software services company, Paradyne has set up four strategic business units (SBU)—software, managed services, SI and BPO services. It has its eyes set on product development, and offers products in the BFSI and HR space. The company’s clients include JM Morgan Stanley, SBI, IDBI, Reliance Infocomm, Idea Cellular, the Indian Navy, HUDCO and TIFR.

The right combination

An engineer by vocation, Annand Sarnaaik, the Managing Director and Chief Executive Officer of the company, along with technocrat Shantanu Rooj and COO Divvyani Sarnaaik, brought a combination of business sense and technical expertise that helped in the balanced growth of the company.

With an IPO in the works, the company has come a long way. In 1998, it formed tie-ups with reputed organisations such as the R Raheja Group, Gujarat Pipavav Port and the Ajmera Group. In 2000, Paradyne set up a software development centre at the Millennium Business Park, and in 2002 it entered the BFSI segment as an IT solutions provider.

“What matters is consistent growth. We have been growing at a CAGR of about 87 percent. With our emphasis on product development, we are confident of maintaining this rate of growth,” says Sarnaaik. The strategy has been to tie up with the biggies, provide value-added services and create a niche market for the company’s products. Paradyne has strategic alliances with Oracle, Sun, Veritas, IBM, Acer and Microsoft. The company is a platinum partner of Sun, development partner with Oracle and Cisco, a support partner of Acer, and works closely with giants such as IBM, HP, Microsoft and Veritas.

“From the beginning we were into high-end SI and chose to emulate those who have been leaders in their respective segments,” says Sarnaaik. This in turn enables them to deliver the best services to their clients, he believes.

Creating a market

In terms of its product line-up, Paradyne has focussed on the BFSI segment with its core banking solution, FinWorQs, and human resource information management system called HrWorQ.

With its core banking solution, Paradyne competes with established names such as i-flex and Infosys. But Sarnaaik is not worried since the company’s strategy has been to capture mid-cap and co-operative banks which can’t match the budgets of large banks.

“FinWorQs has been targeted at co-operative and mid-sized banks as we see consolidation happening here,” remarks Sarnaaik. He thinks that most banks either have age-old legacy or DOS-based systems. The kind of connectivity and the parameters that RBI has been pushing for mandate a move to core banking. According to him, this is an opportunity for growth.

FinWorQs is a centralised solution available on multiple platforms—Solaris, Linux, Windows—and it uses the Oracle RDBMS.

The company has successfully implemented FinWorQs and HrWorQ at Mandvi Co-operative Bank’s 21 branches in Maharashtra, and is managing the bank’s data centre. Similarly, Ratnakar Bank went live on RTGS backed by Paradyne. The system effects final settlement of inter-bank fund transfers on a continuous transaction-by-transaction basis.

“Paradyne’s focus on quality, executional capabilities and technological expertise, combined with its flexible approach, allowed us to implement various projects in record time, enabling us to get to market quicker,” affirms Narendra Mehta, Managing Director, Mandvi Bank. Further, the company has also provided managed services solutions to the bank through its data centre operations.

Though they have been targeting these segments in the banking sector, their solution caters to banks at all levels. FinWorQs has CRM and security features. Other features include tracking chequebook charges, wherein a customer can be charged if he runs out of cheques and obtains a loose cheque from the bank. Similarly, tracking of stop payment charges, cheque return charges, interest posting on loans, charges on outward return cheques, etc. are some other features.

HrWorQ is a centralised solution that considers all the HR needs of a bank—from payroll to recruitment and candidate databank management to workflow management. Explains Sarnaaik, “There are a few small players at the domestic level with products dealing with payroll processing, but our product offers a complete suite of HR information management.” HrWorQ is also available on multiple platforms such as Solaris, Windows and Linux.

Revenue inflow

Paradyne will definitely be in the application and software space, and we also plan to grow in terms of headcount and presence in the years to come Annand Sarnaaik Managing Director & CEO Paradyne Infotech

In spite of competition, the company has grown considerably in the last three years. The largest chunk of its revenues comes from SI services; as far as profits go, the greatest contribution is made by managed and software services.

“In terms of the SBUs that we have, most of the revenue comes from our software, managed services and SI,” adds Sarnaaik. According to him, as SI involves working closely with alliance partners and has value addition for the project undertaken, it results in high margins.

For instance, for the period April to September 2004, the income from SI was Rs 26.23 crore, whereas managed services and software services generated Rs 1.81 crore and Rs 5.61 crore respectively.

Sundune also plays an important part in the growth plans of the company, especially because almost 12 to 13 percent of its revenues are through export activities.

Bouquet of services

With a focus on promoting two of its products, Paradyne is certainly looking at the BFSI segment aggressively, along with e-governance, manufacturing, energy, education and telecom. “Paradyne will definitely be in the application and software space. We plan to grow in terms of headcount and presence in the years to come, and increase the business we get from our overseas operations,” states Sarnaaik. The other area will be Human Resource Information Management System (HRIMS), as there are few solutions of this kind from Indian companies, and the only real competition is from PeopleSoft.

The company has already been shortlisted by the Government of Maharashtra as one of its IT solution providers. It shares the list with others such as TCS, IBM Global Services India, Rolta, HCL, GTL, Ramco and Wipro. Paradyne has been selected for turnkey solutions, network solutions and state-level facility management.

According to Sarnaaik, the funds generated through the company’s IPO will be used for upgrading the development centre in terms of infrastructure as well as headcount; part of it will be invested in Sundune. Investments will also be made to upgrade its products and data centre, development centre and technical support system. Sarnaaik comments, “The state-of-the-art support centre will address the requirements of our domestic clients in the banking and financial services segment. The investments in the data centre and support centre will enable us to cater to existing and new clients in the application infrastructure segment.”

Since a considerable portion of Paradyne’s revenues is derived from exports, it will strengthen its US subsidiary by starting more offices there. The company also plans to increase its headcount from 131 at present to about 300 across its Indian operations and the American subsidiary.

The data centre enables them to provide better service and support to clients in the BFSI segment. In addition, they plan to scale up their software development centre to support technology development and develop internal quality certification systems.

Spreading its wings

A major initiative from IDBI, where Paradyne has been a partner, is the Corporate Debt Restructuring (CDR) cell. CDR is a body of national banks—including IDBI Bank, ICICI Bank, Bank of Baroda, Bank of India, State Bank of India, and Punjab National Bank—which handles cases of financial restructuring. Paradyne has been providing a comprehensive online, real-time application system that integrates all varied activities of individual working terminals, and facilitates daily routine and online data flow of the CDR cell. At present, the membership of CDR is 130.

Paradyne has also been able to make its presence in sectors such as retail, government and manufacturing. Globus stores have installed the company’s warehouse management system for automating their inventory-handling. This system can expand to include manufacturing, transportation management, order management and complete accounting systems as operations scale up.

In the manufacturing vertical, Paradyne has implemented a supply-chain management solution for Rochem Separation System, a water separation equipment manufacturer in India.

Paradyne has been actively focussing on the government and PSU sectors such as MIDC, Western Railways and the Indian Navy. “The business centre of Deccan Odyssey of the Central Railways is looked after by Paradyne,” adds Sarnaaik. In the education sector, the company has recently tied up with the College of Engineering, Pune, and Sri Guru Govind Singh College, Nanded, for their hardware and software requirements. In the years to come, Sarnaaik is confident that Paradyne will become a name to reckon with.

shivani@expresscomputeronline.com