Spotlight

Managing the product lifecycle

R Systems offers integrated Product Lifecycle Management (iPLM) services that can help both emerging and established product companies choose specific services from a suite of the same. By Faiz Askari

India is among the world’s top destinations for services. While talking about the Indian success story, one must acknowledge the efforts of enterprising organisations like R Systems. Over the last 12 years, R Systems has grown from a 35-employee consulting firm to a full-fledged Corporation. The company has also registered itself among the 500 fastest growing company with over 2,000 employees.

The organisation’s calculated focus and commitment in developing expertise in key verticals was rewarded with strategic investments from Intel Capital and GE Capital in 2001 and 2002 respectively.

Elaborating on the nature of R Systems’ business, Rekhi Singh, chairman & CEO says, “Over the years, we have earned the faith of our customers. This has been achieved by being the software product development and BPO services partner for over thirty software product and service companies. We offer Integrated Product Lifecycle Management (iPLM) services that can help both emerging and established product companies.” They are able to choose specific services from a suite of the same. The company’s spectrum ranges from product development to product support. These services along with its proprietary pSuite execution framework helps companies bring products and services to market faster.”

R Systems develops products and provides services that are being used for the following services: 

• Help manage over $200 billion in loan portfolios
• Help leading media and telco companies deliver futuristic triple IP services
• Help leading Japanese consumer electronic companies automate over $100 billion in purchases
• Help 55,000 employees of a top Fortune 500 company scattered across 39 countries to collaborate

Talking about the company’s manpower, Singh says “As at March 31, 2007 we had 1,675 technical associates out of this 1,439 were in India, 209 were in USA and 27 were in Singapore, Malaysia etc.”

R Systems’ business can be broadly categorized into the following streams:

• Outsourced Product Development: Outsourced Product development for ISVs is internally categorised as the iPLM business. These services have been designed to cater to the needs of software companies and service providers across the product lifecycle from inception to maturity and beyond including product definition, development, and sustenance and support services.
  This business contributes around 60 to 63 percent of the company’s present business. It’s OPD has traditionally grown by 30 to 35 percent per annum.
• Own Product: At present R Systems has its own products in Lending Business Solution and Supply Chain management.
• Lending Business Solution: The company offers lending business solutions under the Indus brand. The lending solution from Indus (a division of R Systems) enables customers to automate the customer acquisition life cycle for multiple retail products through several business channels. The product supports multi-location deployment, and is capable of handling many products for its clients; for instance, the product could be used for auto loans, credit cards, and personal loans. It contains three modules – ‘Indus Loan Origination’, ‘Indus Loan Serving’ and ‘Indus Collections’. It provides solutions to the banking industry, with a focus on retail lending. In this vertical, it has a significant advantage from its strategic investor “GE” which account for a significant percentage of its banking and finance business that contributes approx 20 to 22 percent of its business.
• Supply Chain management: This vertical has been gained by R Systems through its acquisition of ECnet Ltd in Singapore. Manufacturing and logistics solution offered by ECnet enables clients to reduce their supply chain costs through improved integration, collaboration, and optimisation of the interaction between clients and trading partners. The supply chain solutions are offered through a hosted service on a subscription basis. ECnet’s clients include several Japanese and South East Asian multinationals in the logistics and electronics space; these clients are located in multiple geographies. This business contributes about 7 to 8 percent of the company’s revenues.
• Govt. business: Under this stream, the company serves various US government departments. This business has a pure onsite component and contributes 7 to 9 percent of its revenues.

Product development @ R Systems

The product development business is gaining prominence in India; R Systems is eyeing this segment in a comprehensive and detailed manner. Highlighting the achievements of his company, Singh says, “In the product business, we have been growing between 20 to 25 percent per annum. In lending, we are exploring new business verticals such as Telecommunication and BPO to maintain consistency in growth. In supply chain management we have been facing a few challenges in the past and have taken strategic initiatives such as better price realisation from the existing  clientele, cost cutting etc. to accelerate the growth process.”

Services business at a glance

Services are one such area where R Systems is completely poised to grow and has gained full command of the customer’s mindshare. “The iPLM business accounted for Rs.127.64 crores revenues i.e. approx 62.5 percent of our revenue during the financial year 2006. Our top three clients were Fortune 1000 companies with combined revenues equal to about 25 percent of our total revenues.” The chairman of the company also says, “During 2006, we acquired WebConverse, Inc., a tech support company in USA, which further strengthened our technical support and customer care capabilities. Under iPLM business, we have eight clients with billing above $ 1 mn of which two are in the range of $ 4 mn per annum on a run rate basis. In the iPLM business, we have started exploring the mature Japanese and Western European markets.”

Core competencies

• Proprietary pSuite Framework

  The pSuite Framework is the execution framework and it consists of best practices, tools and methodologies for creating collaborative product development teams. Through this process, the company has established a hybrid product development team working simultaneously in two geographies at the customers’ premises as well as the dedicated offshore centre. R System’s proprietary pSuite framework helps IPLM clients reduce time required to market newer products, new functionalities, and features; work collaboratively with clients across the entire product development lifecycle; lower post production defects, and retain and re-use the knowledge acquired.

• Client retention

  Clients in the IPLM and product development space tend to be stickier than those in the application development and maintenance space (ADM). Singh says, “During product development or implementation, the outsourced vendor is able to develop a high level of competency in the customer’s product helping the client in reducing the time to market of the next version. This is clearly evident from our existing business which is close to 90 percent.”

• Pool of qualified technical associates

  Rekhi Singh says, “We have   more than 1,600 qualified technical associates adequately spread between offshore and onsite which helps us maintain a global delivery model. We have commenced the People CMM initiative to enhance our HR practices and  continue to invest in the development and growth of our people.”

Well Equipped Infrastructure

At present R Systems has six development centres  of which three are located in India, two in the US and one in Singapore. All are equipped with the latest technology required for maintaining global delivery capabilities. Singh adds, “Our Noida IT and BPO centre was awarded ISO 27001 certification in November 2006 commonly known as BS 7799. The Noida development centre is CMMI level - 5 certified and Pune & Chennai development centres are ISO 9001:2000 & SEI CMM level 5 certified. This shows our commitment in investing in processes, people, training, information systems, quality standards, frameworks, tools and methodologies to mitigate the risks associated with execution of projects.”

Expansion on the cards

At present the company has a seating capacity of 1,975 at its three development centres in India. The chairman adds, “In 2006 we have added approx 890 new seats at our offshore development centres in Noida and Pune and will continue our investment in processes, people, training, information systems, quality standards, frameworks, tools and methodologies to mitigate the risks associated with the execution of projects along with enhancing our seating capacity to achieve the target growth.”

The roadmap

Going forward R Systems’ strategy and initiatives will be as follows:

• Exploring new markets and verticals for its iPLM and own product business.
• Mitigate the impact of rupee appreciation and wage hike through better utilisation and price realisation.
• Achieving breakeven in ECnet Limited.
• Looking for another acquisition in tech support and customer care to further scale up the business.