"We need to expand our operations while strengthening our conventional activities."

-SS Ghosh, Chairman and

MD, CMC Ltd.

width="100" height="135" align="right">CMC Ltd, which announced a turnover of Rs69.88

crore in the third quarter of this fiscal, is targeting Rs750 crore by the year 2002. It

plans to achieve this by strengthening its infrastructure and expanding operations. It has

submitted a proposal to the Government of India to enhance its equity, with a detailed

report of the projects for which it would require the additional funding. SS Ghosh,

Chairman and MD (CMC), who took over last year, spoke to S Meera, Assistant Editor,

Dataquest, about the type of projects, the company is looking at and how it plans to face

competition.

What was your agenda after taking over as the head of CMC Ltd?


CMC virtually covers most areas of IT and we are the number 1 customer support company. We
were at #1 in software as well, but we lost the position. We would like to regain that

position. We can, because of the range of software products we have, which will enable us

to increase our market share provided we market these products properly. Our hardware

growth is also commensurate with the industry rate. And, we would be looking at the

emerging markets of Internet/intranet, e-commerce and e-governance. We would also look at

new packages for these areas and make them suitable for international markets. For this,

we need domain knowledge, which will be gained through tie-ups. We have plans to open new

offices, having tie-ups and partnerships for marketing our products abroad.

By when do you hope to form

these tie-ups?



We already have tie-ups with companies such as Compaq, Frontech, etc. and could work on
forming new tie-ups at two levels. Either we gain by working on projects and getting

trained on-the-job, or through tie-ups with companies having the expertise. However, it is

rather difficult to fix a time-frame for this.

You said that you were No. 1

software company sometime back, but lost ground. What makes you confident that you will

regain the position?



We fell from the #1 position because we did not go for globalization. As the domestic and
global markets are complementary, if the market share increases in the international

market, it has a positive impact on the domestic front too.

But can that alone help you

regain the #1 position?



To establish ourselves globally, we will be adopting one of the four routes available to
us. It could be through professional services, through onsite projects, offshore projects

or products that are customizable. And in



the domestic market, we will strengthen our customer service and would like to set up the
infrastructure for that.

The Government is considering

your proposal for equity enhancement. Would this mean that you will be putting your plans

of strengthening infrastructure on hold till the Government gives it green signal?



No. We would examine the possibility of internally generated funds for investment, but big
investments will have to wait. However, work is going on. For instance, we have plans for

new offices in different locations abroad. What might happen is that our European office

will come up before 1999-2000, but others may be delayed due to delay in getting funds. We

will just have to prioritize our options. We will probably look at Middle East or Fareast

countries for setting up offices, and then Japan.

IT companies typically have a

flat structure as their major requirement is of quick decision making. Don't you think you

lose out to competition on this front?



CMC's decision making will be quick. It is a business imperative now, to take quick
decisions.






But, it's only now in the last two years that the company's growth rate has been
stabilized. What is the guarantee that you won't slip back again?




We did not perform well before, since we did not take quick decisions. We know the

dangers of not being agile, so we will not make that mistake again.

Your growth, to a major extent

comes from the PSUs. Do you think that's enough to sustain in the market?



We have a number of clients in the private sector as well, the stock exchanges and

insurance are examples for these. Of the 14 stock exchanges, 11 have been computerized by

us and even in the case of PSUs, we compete with others through open tender.

As competition looms larger,

what would you say is your major strength?



Our major USP is providing total solutions. We go for an open and multi-vendor system, and
are cost-effective too. No company works with systems and solutions from one vendor alone,

these companies have IBM systems, HP systems and a variety of platforms. And we have the

capability to support all these systems-a mixed system.






In case of software products, we have the track record of doing unique and big projects
like for the railways, for freight tracking etc. Our fingerprint software has been

deployed by NCRB, New Delhi, in Andhra Pradesh, Tamil Nadu and Mauritius. All these are

our strengths in the market.

What is the position of your

five Strategic Business Units in the market?



We have proved ourselves in customer support & services segment and systems

integration. In fact, our networking activities, which started earnestly only two years

back, completed projects worth of Rs35 crore. Our international operation, complements the

software projects for domestic market and a tremendous amount of opportunities exists

since enough capital



has been generated. Now, we are trying to realize the benefits of these investments
through marketing activities and expect the profitability to increase tremendously.

Education and Training is another major growth area for us, with 70% growth in last two

years.






Indonet is the baby of the lot. We plan to offer solutions for EDI, e-commerce, Internet
and intranet. This area also offers big opportunities. But, I wouldn't like to comment on

profitability at this stage of investment. Also, the market is fluid with rates still

being worked out and so we are delaying our decision to enter the market.

How do you see yourself with

competitors like IBM Global Services or EDS?



Services is focus area for us. We need to expand our operations even while strengthening
our conventional activities. We need to position ourself differently, become all

pervasive, and we have an advantage also. We can set up a Microsoft competence center,

whereas IBM will not, and we can develop our competency in different segments without

problems. For all these, the key will be tie-ups.






We have our strengths, we need to market them properly to be successful. Implementing
quality processes and doing the job properly would be our focus.

Manpower retention is also a

problem for you...



At the lower middle management level, and this is one area where not being autonomous
makes finding a solution difficult. We do not have the right answer, but we have been

trying to minimize it through performance-related incentives.