Exclusive Interaction - Arun Nathani, CEO & MD, Cybage Software

Cybage Software completed its 25 years on 1st of July 2020. On this occasion, Arun Nathani, CEO & MD, Cybage Software,  talked to us about his organisation's journey

How do you feel about this achievement?

Many companies are very successful and complete many years of successful operation. But what I feel good about is that the main thing about Cybage is that we have kept our soul intact. Sometimes in our race to succeed we lose perspective of human relationships. The people who make it happen, the customers, the employees, the society at large, our vendors, are important for us. Otherwise, it would be just a number and a celebration of deep pockets.

Are you planning some activity or event on this occasion?

This has been going on for a few weeks and shall continue for another few weeks. There have been massive employees activities on the engagement front and also on the customer engagement front. There’s a lot of it on the Social Media such as Facebook, Twitter, Linkedin etc. Cybage is a private organisations, so we haven't planned a media event for the wider public.

Can you talk a little bit about your journey of last 25 years and if there are any new developments?

The first year was a very ambitious journey of trying to develop a product, not services, to launch in the Internet market. In every industry there are short periods of excitement followed by long periods of boredom. But I had the conviction that I was launching a great idea. It took us one year to realise that it would be very difficult to sell a product. After one year we used our product as a branding tool and moved into services. In 1996 we moved into offshore services. With the maturity of Internet, this offshores services were gaining more momentum. From 1996 to 2002 the peak of dotcom growth, we grew very rapidly. We had a small base then. We were in an era when you could charge the customer anything you want. We felt that instead of charging the customer a high rate, we should charge the cost and build forward and give a value proportional to the customer. Second, it was a privately owned, middle-class family company, so we couldn’t spend the money we didn’t have. This meant that we couldn’t spend on marketing and hence, we could only survive on our core excellence. The customers who were happy would come back. The combination of these two was the mantra for our success.

Even when we started doing very well, we didn’t change our style of business because we realised that it was working. Instead of spending on Marketing we decided to focus on increasing our internal efficiency. By 2002 we had about a hundred people. Then the Dotcom bust happened and we actually did very well at that time. When we grew in size, we were competing with the large enterprises. We realised that we could cease to exist in some time, because we didn’t have economics of scale in our favour. The large enterprises already had whatever we were trying to build. Not only they had, they could give it cheaper than us. But we were doing exceptionally well. The economics of scale was not giving the large enterprises any advantage. We realised the reason behind this. There was such a massive boom in the IT industry then that the organisations had ceased to focus on the internal efficiency. There was enough business and how they delivered was not important to them. Then we decided to digitise Cybage, so many years ago. The whole company integrated in decision making.

Digital transformation uses the power of data to make better decisions. It helps to choose the most optimised solution. We’re a scientifically driven company. Last year we grew 18%, the year before also we grew close to 18%. Even in the Corona environment, we have not though about salary cuts, lay offs etc.

How have you met the challenges of lockdown?

Like most other companies, our majority of workforce is working from home. But we also have 15-20% people coming to office. The reason for this is that certain departments are not efficient working from home. For example, HR, Recruitment, Administration etc. then there are leadership teams, the management staff, who can get a better control of the company by coming to the office. The productivity is not an issue. Right now there is no temptation to go out. So people sitting at home just work. Professionals are also generally a little insecure about their jobs. That brings more commitment. We keep reaching out to the employees to ensure that they’re motivated. Right now the industry as a whole is working fine from the perspectives of security and productivity.

I feel that in the long run of this WFH, at some stage the collaboration spirit will be diluted. Many times, people need break also to go out of the home. It’s difficult to measure people without meeting them in person. So, I am not that strong proponent of 70% or 80% WFH system. Besides, some companies are doing WFH not only because of Corona, but also because it cuts down their expenditure on office operation. Cybage is a no-frills company. We don’t give free lunch, transport etc. so our employees are spending from their salaries. But many companies are now saving their money because of closed offices. Corona is a primary reason, no doubt, but it’s not hurting them.

The IT industry as a whole has not been hit badly. Instead of physical shops people can buy online. The power of technology has gone up. When everyone is digitally transformed, the demands for technology keep on increasing. We work with technology companies. Our customers are Salesforce, Microsoft, Google etc. Many companies work with direct end customers outside IT sectors. They are getting more affected than us. We work with IT companies that in turn are giving digital transformation solutions. Our business rationally is more stable and is more in line with the future demands. We have 100% digital revenue.

How has your business growth been in this quarter? Has the demand fallen, has it risen or how is it?

Some verticals are more hit than others, in general. For example, one of our verticals is travel & hospitality. They have obviously lost their business globally. But we have media, healthcare, online retail, tech verticals which are doing fairly well. Decline is of three types. One will be downsizing. The customer goes bankrupt and the project gets downsized. The second is discount. They ask for discount because they don’t have much money. Third is deferred payment. They want to pay later as right now they don’t have money. So a Q-o-Q picture combines some losses which are temporary and some long-term. I am suspecting that our revenue decline will be between 5 and 10% Q-o-Q. On a positive side, the US Dollar is stronger, which is helping us.