Virender Jeet, Senior VP (Sales & Marketing / Products), Newgen Software picture, talks to us about his organisation and its functioning in this interaction
What are your operations like?
Newgen is a software products company. Our 2018-2019 global revenue was Rs 600 crores spread around 60 countries selling across business process management, enterprise content management customer communication management. Broadly, they deal with all forms of business processes within the organisations. That is becoming very critical – how you reinvent your business and how you digitise your business. We work through horizontal products i.e., across all industries, segments and countries. We’re roughly around 20 Bn Dollars industry globally. Predominantly our customers are in 4-5 core verticals, banking being the most significant, since it’s a large consumer of IT. We also have service manufacturers and then government naturally, in every country is a consumer. We also have a lot of companies in healthcare sector. I look at sales, marketing products.
What are your major products?
Newgen’s brand names are the Omni series such as Omni docs, Omni OMS in customer communication. We have got around 50-60 products. In banks, our products are deployed for onboarding customers, for streamline lending systems in banks, in insurance it’s about claims. Similarly, in shares services it’s about accounts payability. So we’re broadly automating business processes by connecting systems with people and placing them on a platform of continuous change. So every sector we have products designed for this purpose.
What is your channel for selling these products?
We directly sell to the enterprises either through partners or via direct links. We have many partners. All global system integrators are our partners. Then we have local Sis and we also have Value-Added Resellers in different countries. We have around 270 partners globally. When customers buy our products, they end up using them for 10, 15, 20 years. The enterprise sales cycles are very large. In some cases we sell on our own, in some cases we sell through partners and in some cases the partners sell on their own and we provide them with software and other support. The partners are able to provide services over those products. They customise them for their end clients, configure the products and implement them at multiple places.
What shifts in the customer preferences have you seen in the last 4-5 years and what shifts do you foresee in the next 2 years?
The need always remains in some form. The important point is how that need gets served. If our products keep on updating themselves in terms of servicing, then they will remain relevant. What Newgen is making today is always meant for future. If we stop doing that, then we shall become obsolete in 5- years. Before 4-5 years people were not investing in cloud, mobility, social platforms. Now they are demanding to know how they can engage with customers on social platforms. Similarly, today analytics, RPA, customer experience, conversation interfaces are becoming very important. If products and technologies don’t keep up with the pace, they will find it difficult. So now there is a shift towards cloud. Broadly, businesses have needs and products service those needs. As long you’re able to serve their requirements your products will keep on surviving. The banks have to give loans. Earlier you had to go to them to ask for a loan. Now you can get a loan on the software. But the loan need is still there.
We invest on our own in R&D. We are among the few companies that have done deep investments in the R&D for the last 25 years. R&D and sales and marketing are the two core investments in any products company. What you sell has high gross margin. We sell roughly 20-22% on sales and marketing and around 9-10% on R&D. Many of our R&D centres are in India in Delhi and Chennai. We have around 350 people in R&D centres. Most of them are in Delhi and some are in Chennai. We have 2800 people globally.
How do you view the Indian market?
Indian market is always difficult and we’re no exceptions. It’s a very good market for every product company. There is a lot of innovation. It’s an innovation frontier. We’re at par with the globe. Indian customers are very ahead in the world. The market environments are slightly difficult because of uncertainties, cycles of payment etc. These have always been challenging in India. But for technology space, utilisation, application of products, Indian customers are always willing to try. The government is always less reliable. They are too big to ignore, but you never know how fast it will move. Current environment you can see; there are lots of issues in the market. Financial services have not shown lot of growth. On the other side there i very good growth in shared service management. So we’re still growing well in India. But as compared to our growth in APAC and US, India and Europe-West Asia-Africa have been slightly slow.
If some local SIs want to partner with you, what’s the process?
They have to understand our products and have to get trained on them. We have multiple models of training, such as sales training, enablement training, implementation training. We have programmes for Sis. We educate them about products, marketing strategies etc. It’s a structured programme. They can contact us through our website or come to our office.
What is your marketing strategy?
We’ve got a very interesting value proposition for our customers. We have built these platforms typically to provide value quickly. Markets have very little patience to invest in something and wait for it to give returns after a few years. So, fundamentally when we started we thought that we should build certain things so that values come to the customers in quick cycle. We have been very good in making our customer stories successful. That success itself helps us to sell to more places; Newgen’s channels have been strong in other places. 70% of the banks are with us.
In the areas where Newgen is partnering with them, we are their exclusive partners. Similarly, in West Asia, most of the major banks are with us. So I think we’ve been able to build on our success stories as well as we have great value proposition in terms of offering solutions.