SIEMENS INFORMATION SYSTEMS LTD – Growing Wows-And Woes

In 1992, this subsidiary was set up to provide software development for its parent
company, Siemens AG in Europe. Since then, Siemens Information Systems has moved ahead to
provide software products and value added solutions for specific market

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MANAGING
DIRECTOR: AR Laud * PRODUCTS AND SERVICES: Application
Software, Systems Integration, Software Development
* TECHNICAL COLLABORATION: Siemens AG, SAP AG, Siemens Nixdorf AG * START-UP YEAR: 1992 * EMPLOYEES: 764 * QUALITY CERTIFICATION: ISO 9001 * ADDRESS: 130, Pandurang Budhkar Marg,
Worli, Mumbai 400018
* TEL:
4931350/60
* FAX: 4938941

PERFORMANCE HIGHLIGHTS

  • Fall in revenue growth rate from 52.4 percent in 1996-97 to 27.3 percent in 1997-98
  • Moderate productivity increase from Rs 13.6 lakh per employee in 1996-97 to Rs 15.4 lakh
    per employee
  • Share of export revenue steady at 61.4 percent in 1997-98
  • Share of services revenue increases from 77.2 percent in 1995-96 to 84.3 percent in
    1997-98

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segments of the domestic industry. With these focused initiatives, the company’s
revenue has reached Rs 117.36 crore in 1997-98 at growth rate of 27 percent over the
previous year. While this is a healthy growth rate, it is a slowdown from the previous
year’s growth of 52 percent.

With Siemens Information Systems, targeting the large and medium corporate segments,
the slump in their performances has also affected this company. Since the company had
taken a strategic decision to move up the value chain, the share of services in the total
turnover has increased from 77 percent in 1995-96 to 84 percent in 1997-98. The company
currently focuses on the domestic market through seven business units. These include
business solutions, IT services, telecom, real time systems, transportation, graphic
products and retail industry. These business units deliver a mix of packaged software
including software developed by Siemens and software sold as an alliance partner.

Of strategic importance is the business solutions and IT services units which focuses
on the implementation of SAP R/3, supply chain solutions, EDI and other commercial
application solutions. Some of the prestigious sites where Siemens implemented SAP
solutions in 1997-98 were Unit Trust of India, Malayala Manorama, Ispat Group and Larsen
& Toubro.

Another strategic business unit is telecom. This is also one of the core competencies
of the global group. The ongoing privatization of the domestic telecom industry has been
the major driver for this unit. To meet the domestic demand at competitive prices, Siemens
offers its own customer service products, which include TeleMessage, TeleMaster,
CallConnect, GABS and DAS. However, with the slow backburn in basic service privatization,
the company is witnessing a slump from this unit.

The real time systems unit is currently focusing on integrated hospital management
systems, and embedded systems. Siemens Information Systems recently implemented an
integrated hospital system at Amrita Institute at Kochi, using products from Citation,
USA. Amongst its future strategic thrusts, Siemens is looking for a customer base for its
expertise of embedded systems in car electronics, factory automation, simulators and
warehouse management. However, customer demand may not be forthcoming, since these are
exactly the segments which have undergone demand recession.

While the company appears to have excellent business solutions to meet the requirements
of the domestic market, negative investment sentiments in telecom and other infrastructure
market segments are limiting its growth potential.

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