34 Mastek ltd – Looking For Solutions

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CMD:
Ashank Desai ‡ PRODUCTS AND SERVICES: Software Consultancy, Turnkey Projects * AGENCY OPERATIONS: Computer Associates, Comshare, LBMS  * START-UP YEAR: 1982  *
EMPLOYEES: 714   * QUALITY CERTIFICATION: ISO 9000
  * ADDRESS: SDF IV, Unit No. 106, SEEPZ, Andheri
(East), Mumbai 400096  * TEL: 8290635-37  * FAX: 8290557  * WEB SITE:
www.mastek.com

PERFORMANCE HIGHLIGHTS

  • l Growth at 35 percent, total revenue-Rs 95.05 crore
  • l The US and UK markets brought in nearly 40 percent of the revenue each.
  • l Software product revenue is Rs 8.42 crore.

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With a 35 percent growth over the year 1996-97, Mastek’s revenue has jumped to Rs
95.05 crore. Exports accounted for nearly 92 percent of it, and herein the company has
exceeded its growth targets. The US and European revenues grew by 80 percent but the Asian
economic crisis had its effect on the region’s revenues. The Asian business grew by only
53 percent. Thus the company wound up the year without meeting the domestic and Asian
market targets.

The company’s focus on products is coming down. Products business is primarily done in
the Asia-Pacific and domestic markets-last year it brought in 10 percent of the revenues,
this year the aim is to reduce it to 6 percent. However, it does not mean that existing
partnerships, with Computer Associates for example, would get any less attention. The move
essentially means that the focus on developing and marketing its own products would
decrease; and only key distributorships will be retained and served well. Even this year,
the company came quite close to its Ingres target. In other words, the company will not be
driven by the product selling paradigm.

The key initiatives taken last year are the formation of a business solutions group to
focus on specific areas like Supply Chain Management (SCM). Success has already come in
the form of projects from Videocon, Bausch & Lomb, and Prism Cements. This is a good
opportunity to integrate with any ERP and earn services revenue.

In the global business, the company prides on having created a good front-end marketing
infrastructure that is decidedly more local than others. Both the US and UK business has
grown favorably in the past two years. For instance, just two years back, UK got in only
Rs 2 crore, last year it has gone upto nearly Rs 40 crore. In Europe, the company plans to
start went local operations in Germany, Belgium, and Switzerland.

Mastek’s strong point is applications for stock exchanges. The US operations focus on
an area called Customer Asset Management which includes sales force automation and
helpdesk. Another focus area is the branding of application development and management
methodologies. This helps in bagging outsourcing contracts where Mastek competes with
local companies on service levels.

As a strategy, the company follows a ‘stepping stone’ model-starting with purely onsite
consulting work, going onto onsite application management, and then offshore application
management. Again, the company wants to relate to a few customers and then provide them
the best service.

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