On The Digital Highway

Zensar, given its relatively small size, is at an advantage as IT firms adapt to a new wave of changes. Aiding the tech firm’s reboot is its aggressive CEO and a PE investor.

- Aveek Datta

Sitting in a white-hued sofa lounge adjoining his office on the fifth floor of RPG House in Mumbai’s upscale Worli area, RPG Enterprises Chairman Harsh Goenka offers a candid assessment of his conglomerate’s information technology (IT) arm Zensar Technologies’ performance.

“Zensar’s story was very much like the India story of the past; it didn’t do anything spectacular. It was a steady ship and a cosy house,” says Goenka, 59, who helms a $3 billion-business group.

Despite five decades of business (including in previous avatars), Zensar has not emerged from the mid-sized ranks. It closed FY16 with a turnover of $450 million (See chart on page 73). In comparison, Infosys, founded in 1981, had a turnover of $9.5 billion that year.

“[Being a mid-tier firm] we were at a big disadvantage; for the big IT deals, we weren’t even invited. So the concern was: Where will future growth come from?” explains Goenka. “We urgently felt the need for introducing some kind of disruptive growth strategy.”

Until about a year ago, the strategy contemplated was a big-ticket acquisition. But the rapid evolution of IT forced Goenka to rethink. The Indian IT industry thrived for decades by offering a labour arbitrage to overseas clients through outsourced services. Today, it is a foregone conclusion that future upsides from such a model are limited. Digital is the buzzword that has come to define the new wave of technology, comprising verticals such as automation, Artificial Intelligence, Internet of Things (IoT) and cloud computing, and every IT firm worth its code is trying to recalibrate its legacy systems.