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Home > THE DQCI SILVER CLUB 2004
 

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RAMCO SYSTEMS: Moving Up The Value Chain
 
Ramco Systems as a whole revived its business fortunes in the last fiscal. The company got on to the growth curve, after registering a negative growth in FY 2002-03.
 

 
Monday, September 20, 2004

 

PR Venkatrama Raja,
DIRECTOR

SERVICES: Turnkey services in networking, information security and contact center solutions
EMPLOYEES: 1500 (SCN Division 160)
BRANCHES: 18
ADDRESS: Third Floor, Prince Kushal Towers, 
96, Anna Salai, Chennai 600002
TEL: 044-2860 3900

STRENGTHS
l Focused on value business which improved bottomline
l Started security consulting practice, which paid-off well
WEAKNESS
l It faces cannibalization from its homegrown software for some deployments
l Missed opportunities in the SMB, which contributed only 10% revenues

Ramco Systems posted an overall revenue of Rs 171 crore in 2003-04, a 10% growth over the previous year's turnover of Rs 156 crore. Its Secure Converged Networking (SCN) division, a key business unit focusing on turnkey services in networking, information security and contact center solutions, posted a near industry average growth of 23% within the division. This division contributed 34% to the total Ramco System's turnover. The SCN division registered a revenue of Rs 58 crore (includes service revenues of Rs 7 crore) in 2003-04, while in FY 2002-03 it made Rs 47 crore.

Some of the major projects executed by the SCN division last fiscal included a data recovery site for Bombay Stock Exchange, security infrastructure for Tata Teleservices and MindTree, WAN solution for Indian Bank, LAN solution for Reliance Infocomm and Sasken Communication, and voice infrastructure for Keane.

Nortel Networks was the major revenue earner over other brands, which contributed nearly 70% of revenue in networking and security space. The rest was shared between Checkpoint, Internet Security Systems (ISS), Trend Micro, RSA Security, AMP (Tyco), HP Open View and Cygnus.

The SCN division started security consulting practices last year, which paid-off well. This included setting the information security policy, auditing the policy and benchmarking with industry best practices, and deploying the best available products and technologies.

In some cases, it goes up to the certification level based on the customers' requirements, especially with BPO companies. ITES/BPO segment presently contributes 12 percent of revenue for the division, while telecommunication and BFSI are the two major segments sharing close to 50%.

The company is evenly focused on its three businesses-networking, security and contact center solutions. However, if it finds more scope for value addition in the ITES segment, it pushes its HR software there.

Last year, the company added new products through e-talk, Fotigate, Utimaco and Precise Biometrics.

The company earns 90% of revenue from the enterprise segment, while small and medium businesses contribute only 10%.

Ramco's SCN division gave up product distribution business a couple of years back to focus on direct selling, which slipped them in the turnover figures over the least year. This took transition time for the company and last year, it focused more on training the workforce and realigning its business strategies to the new focus area.

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