Aiming for predictable, sustainable and profitable growth at Zensar: CEO-MD

In a Q&A Ajay Bhutoria speaks about the new strategy he has rolled out the company, and how Zensar will address supply side issues

Mid-cap IT services firm Zensar Technologies, part of the RPG Group, announced the acquisition of US-based M3bi for $33 million as the company restrategises under the new CEO and MD Ajay Bhutoria. In an interview with Shivani Shinde he spoke about the new strategy he has rolled out, M&A and how Zensar is going to address supply side issues. Edited excerpts:

This is the second quarter since you came on board at Zensar. How is the new strategic rollout panning out and by when will the company see its impact?

As soon as I came on board, along with the employees and the board, we had come out with a strategy for the company that will cover sales engagement and talent roadmap and how we are looking at M&A. The focus of this strategy is to get Zensar towards having ‘predictable, sustainable and profitable growth’. When you start executing on such a roadmap, it will take anywhere between four to eight quarters for the strategy to take root and give results.

What is the strategy all about?

There are two parts to this; one is the core areas or verticals of focus and the horizontal structure that this focus requires.

We have identified five growth areas. Now none of these are new to us. We have had capabilities and footprint across these areas, it is about sharpening the focus. These five areas include-- experience services, advanced engineering services, data analytics & AI/ML, core application services like SaaS and digital foundation services.

For instance, we are already offering services under the Experience Service with our earlier acquisitions of Foolproof and Indigo Slate, they are well established in the firm and are giving significant traction for us. Similarly, Advanced Engineering Service, which was earlier part of our DAS is now being highlighted because of the criticality we have added to it and the demand that it addresses needs a separate focus. Data analytics, AI/ML is again where we are present but we are carving it out as a separate opportunity because of the market out there and then our core application offering with SaaS and Digital foundation already has significant traction.

Add to this there are four horizontal focus areas that tap into the new strategy roll out, that is, sales, talent, partnerships and M&As. On the sales side we have started to expand our pre-sales team and we have also made changes to how the sales team works and reports.

Skilling and reskilling has been part of the company and given the way we have sliced up our strategy there will be an additional impetus on how we get talent, but we are focusing on how to get talent across the five strategic areas. M3bi, our recent acquisition, addresses some of these requirements, from the capability aspect they are doing some really cutting edge work in Data analytics and AI/ML and also digital engineering and UI, UX engineering. They bring us significant capability.

How does the M3bi acquisition fit into the new strategy?

It fits in perfectly. This acquisition fits into two of the five strategic area we have spoken about-- advanced engineering services and Data analytics AI/ML. Additionally, they also get marquee clients on board, three of the clients we get through M3bi are Fortune 500 companies. A sizable portion of the work they do is with banking and financial services verticals. For us BFSI is a major thrust area for us, it contributes 29 per cent of the firm's revenue.

With digital and cloud becoming the core of every deal, how do mid-cap firms and players like Zensar differentiate and capture a substantial part of this deal flow?

The market will continue to expand, if you look at the demand that is coming from new areas or the traditional spaces, it is something which is here to stay for the next 24 months. How we capture this demand is critical. It is imperative for firms like us to have strong value propositions in these areas. These could be cloud native, data analytics, AI/ML, SaaS, it is imperative to meet that market demand. Each one of us is addressing this in our own style. For Zensar, it is experience-led engineering or infrastructure, coming out of what we did with Indigo Slate and Foolproof.Zen

Q4 results continued to look soft with revenue growth impacted by hi-tech clients. When do you see the issue getting resolved?

We did see a little softness in the hi-tech clients. Some of our top tier hi-tech clients that got adversely impacted due to pandemic are now stabilising. While the volume of the business with these clients shrunk, we continued working for them and I think going ahead we will see much more stabilised growth. Some of the projects got cancelled or came to an end, so that has impacted the quarter numbers.