Onward Dreams Upward



Harish Mehta sounds very excited these days. It is not difficult to guess
why. The proprietor of Onward Group has just divested his 50% stake in Onward
Novell-the sales & marketing arm of Novell in India for more than a
decade. At one stroke of a pen Onward Novell ceased to become the flagship
company of the group. Instead, it has been replaced, by Onward Technologies.
Though Onward Technologies has existed all through the group’s lifecycle, the
publicity beam has always been focused on Onward Novell.

“We plan to reach Rs 100 crore and take our headcount to 1,000 in as
little time as possible,” he informs. Considering Onward’s current
revenues of Rs 55 crore and headcount of 650 people, this looks like a tall
order. However, taking into account the cash accrued through the sell-out of
Onward Novell, and Mehta’s strategic roadmap for the company, it might happen
sooner than later.

Engineering Design
While Mehta is tight-lipped about financial details of the Novell deal, he
waxes eloquent on the future roadmap for Onward Technologies. “Engineering
design services would be our biggest growth driver; we are already service
partner to the worldwide manufacturing industry, with a range of engineering
services,” he claims. The company already has a large center in Pune where
nearly 400 people are involved in engineering design services outsourced by
global automotive, aerospace and engineering companies. These include
illustrious names like Chrysler, Emerson, John Deere as well as Tier 1 auto
suppliers like Magna or Lear. Onward is also the exclusive distributor and
reseller of MasterCAM in India and its neighboring countries.

Harish Mehta

Mehta recites impressive numbers to substantiate the future viability of
engineering design services. “Globally, engineering design is a $220 bn
market, out of which about $20 bn worth of projects are outsourcable. Again,
within this only around $7-12 bn can be delivered offshore and is, therefore,
accessible to Indian companies; more realistically, about $2 bn worth of work
should come to India in the next few years.” Impressive numbers, and
considering Onward’s early legacy, Mehta’s optimism does not seem misplaced.

Leveraging Novell Association
Beyond engineering design, traditional IT services is another area Onward is
betting on big time. Onward caters to about 10 clients in the US and UK
specifically on Novell platforms-its Navi Mumbai development center with 100
people currently suffices for this. In the next six months, Mehta claims, the
focus would increase on identity management related solutions as well as
services on SuSe open source platform-coinciding with the two focus areas for
Novell globally.

“Banks and retail players, who are in the forefront of offshore
outsourcing, are seriously looking at identity management which would be driving
the next wave of computing. Another focus area for us on IT services would be on
migration to Linux, particularly the Novell variety.” The Onward Competency
Center for Novell Technologies is what Mehta is clearly banking on; not only
does it provide the skill sets on Novell accrued through historical lineage, it
also provides a ready base of Netware customers.

Banking on Domestic Front
Beefed up by the acquisition of Kale’s banking business two years back,
the company has a fairly robust BFS business with about 40 clients in the
country. However, Mehta clarifies that the focus is entirely domestic and would
not change in future too.

Onward is blending modules from Kale’s products into its core banking
solution -BancBrics. However, BancBrics is specifically targeted only at
high-end co-operative and semi-urban banks, where core banking is still deployed
only at specific branches. Currently, Onward banking solutions are deployed in
nearly 4,000 branches of 40 banks-this includes Ratnakar Bank, Cosmos Bank and
Silab. In addition, it has presence also in large PSU banks like UCO Bank and
Bank of Maharashtra, albeit only in their rural and semi-urban branches. Once
the product re-architecture is complete with incorporation of Kale modules, at
least 30% of business is expected to come through ASP mode or specialized
channels.

Potential Dreambusters
Though Mehta’s enthusiasm is infectious, industry analysts still have
reservations about the planned roadmap.

For one, more and more global players looking at utilizing Indian engineering
resources are setting up captive design centers. Even Surendra Agarwal, MD of
Neilsoft, one of the more established players in engineering design services
admits to competition from these captives. “Most MNCs like to keep their
design in-house, plus you require tremendous marketing muscles to compete.”

Even global engineering services players like PTC, EDS or Plexion have large
operations in India; then you have bigger software players like TCS, Infotech
and Geometric with larger client bases already established. Plus, Mehta rules
out moving into products, especially those on the lines of PLM-this is one
area that has been particularly lucrative for Geometric or EDS. Even IT services
might not be such a smooth sailing for Onward-Novell itself as a technology
platform has seen dwindling fortunes; plus, identity management and open source
are domains where larger Indian IT service players are already cluttered.

The
Onward Chronology
Year Event
1991 Incorporated
as a private limited company under the name Onward Engineering.
1994 Renamed as Onward
Technologies and listed on the Indian stock exchanges.
1995 Recognized as the
in-house R&D unit of the Dept of Scientific & Industrial
Research, Govt of India.
1998 Released “Arthapranali”,
a multi-lingual banking software product.
1999 Entered into a global
partnership with Novell Inc, to provide e-directory-related
consulting services.
2003 Onward
Technologies is restructured. It identifies two focus
areas-engineering services and BFSI. Acquired the banking division
of Kale Consultants.
2005 Identified
engineering design services, banking and Novell Competency Center as
three growth areas to reach a target of Rs 100 crore and 1000 people

Last but not the least, though Onward might have targeted the semi-urban and
co-operative banking sectors, areas where Mehta argues Infosys, i-flex or TCS do
not operate in, there are established players like Infrasoft, NextStep or Zenith
Infotech who are already ruling the roost there. And, by the time Onward is
ready with its re-worked product it might lose considerable ground.

Onward’s
Three-Pronged Growth Strategy

Increase engineering design services by associating with bigger
clients for bigger projects; develop a company with a strong
front-end in this aspect

Increase IT services focus by leveraging on the Novell Competency
Center; target identity management and open source migration
particularly on the Novell platform (For both 1 & 2, focus on
increasing body counts)

Target rural, semi-urban and co-operative banks with small core
banking solutions for particular branches; offer customized
solutions as well as services on the ASP mode.

Overall, Onward’s biggest drawback till date has been its reticence in
publicizing its solutions or offerings. That needs to change immediately in case
the company wants to succeed with its future roadmap. With the Novell
encumbrances now gone, the issue looks likely to be addressed in the near
future. How successfully that is done would determine whether Onward’s graph
will go up as Mehta expects. That is going to be Harish Mehta’s challenge in
the days to come.

Rajneesh De

The man behind it all…

More than two decades ago when IT still meant Income Tax, Harish Mehta earned
a Masters Degree in Computer Science from Brooklyn Polytechnic Institute. Back
in India he was a vanguard who shaped the Indian computer industry, being
amongst the founder members of Nasscom. He, in fact, is credited with persuading
Dewang Mehta to come on the Nasscom board.

Mehta also brought reputed American companies to India. Amongst the first was
Digital, which entered into a joint venture with Hinditron where Mehta was the
first managing director. Later on he formed Onward Technologies and then tied-up
with Novell to market its products in India. Now in his third and latest avatar,
can he take Onward Technologies to dizzying heights?

Leave a Reply

Your email address will not be published. Required fields are marked *