Role Model
Give back to society more than what you take
R S Shanbhag, CMD of ValuePoint, does not believe in blowing his own trumpet. He values hard work and dedication and believes in earning and sharing
By K R Nambiar
 R S Shanbhag, the Chairman-cum-Managing Director of the Bangalore-based ValuePoint Group, is often described by his peers as an epitome of simplicity, meticulousness and agility. Despite heading a Rs 192 crore group, Shanbhag, like his companies, keeps a very low profile, and prefers to stay away from the media flashbulbs. Nevertheless, he has big ambitions for ValuePoint.
Modest beginnings
Shanbhag founded ValuePoint Systems in 1991 with a capital of around Rs 10,000. Like many other early Indian IT entrepreneurial ventures, the company focused on systems building and annual maintenance contracts in the first two years. Then around 1994, the company signed on with Intel India as one of the first Genuine Intel Dealers.
At about the same time Shanbhag got Sampath Kumar, his hometown pal, school-, college- and hostel-mate, to join the board of the company. “Sampath came in with a number of fresh ideas in sales and marketing, and completely restructured our business,” Shanbhag recalls.
The big break came when ValuePoint signed on with European PC maker Tulip. ValuePoint also bagged a prestigious order to automate the electronic trading system at the Bangalore Stock Exchange. “Frankly, the solution came from TCS, but we tagged along and sold the hardware. It was a big breakthrough for us, and earned us the reputation of being a serious systems integrator,” says Shanbhag.
With Tulip running into rough weather and exiting the Indian market in 1996, ValuePoint signed on with IBM. While Shanbhag insists that the IBM relationship was great, ValuePoint tied up with HP in the late nineties when HP moved out of the HCL partnership and entered the Indian market directly. “We became one of the first partners of HP, and since then we have been loyal to them. We presently deal in the entire portfolio of HP products from supplies to superdomes,” informs Shanbhag.
The HP partnership started the next phase of growth for ValuePoint. By this time, the company had completely abandoned selling assembled computers. Shanbhag says that it was clear to him in the mid-nineties itself that if the company had to grow it had to piggyback on vendors who had the brand pull to gain acceptance among the corporate and enterprise segments.
By 2000, ValuePoint had established itself as a premium corporate VAR in Bangalore for HP. However, Shanbhag was not satisfied with being just a box-seller. “We realized that if we wanted to grow through the value chain it was imperative that we move to the solutions business.”
Something substantial
ValuePoint therefore changed its go-to-market strategy. “We knew that the margins in box-pushing were likely to come down further, and that at the end of the day box-pushing did nothing substantial to build relations with our customers. By contrast, a solutions provider has more options to work closely with customers, and thus build partnerships that perhaps last for ever,” he reasons.
To become a solutions provider the company set up partnerships with ISVs across domains. “Today, we are confident that we can address almost all opportunities across 20-plus verticals as a result of our partnerships and our experience in providing solutions in these verticals,” Shanbhag asserts.
In 2004 the company entered the field of IT services, which further strengthened its position. At present, services account for 10 percent of its revenues, and Shanbhag sees that share rising in the next decade.
Also in 2004 ValuePoint launched a venture called Sourcehub, which focuses on legal knowledge process outsourcing (KPO). Sourcehub is presently one of the largest in the space in the country. “Last year Sourcehub started its onshore operations in the Bay Area of the United States, addressing litigation support services opportunities in the American corporate market,” says Shanbhag.
Another venture which ValuePoint started was a language translation and localization services company called ValuePoint Knowledgeworks. “We are into the language translation and localization services business in India, and have more than 150 clients across the globe. We are the largest organized language translation services company in the country, and cater to even Fortune 1000 clients,” Shanbhag states.
IT software services is another area the group has ventured into. Apart from its own home-grown software solutions, the company has taken the inorganic route and acquired two companies. “We have not announced the details to the market because of strategic reasons. One of the companies we have acquired is a software products company, while the other is into services. We have big plans in software services in the coming days,” Shanbhag states.
In the last two years the company has spread its wings and set up branches in Chennai, Hyderabad, Kochi, Thiruvananthapuram, Visakhapatnam, Mumbai, Pune, Mangalore, Manipal and Kolkata. Within the next quarter there are plans to start operations in Delhi-NCR.
ValuePoint is now also a major partner for Microsoft, Cisco, Tyco, APC, Emerson and Sun Microsystems.
Processes and strategies
Shanbhag attributes the success of his ventures to the processes, strategies and investments the company has made over the years.
“We do spend time on the drawing board to develop clear strategies for every opportunity we address. This is yet another reason we have come so far,” Shanbhag explains.
ValuePoint has a meticulous lead-generation and conversion process. The company has a separate team that hunts for new business, and a pre-sales team that addresses the opportunity and closes the sale.
There is also a lot of stress on understanding the customer better. “We work so closely with our customers that we know the IT requirements of many of them for the next five years. Thus, we can prepare ourselves to address the opportunity,” Shanbhag reveals.
The company has invested in a CRM and sales force automation system, salesforce.com, and also deployed a home-grown Web-based customer support system. In addition, ValuePoint has deployed Ramco’s ERP solution to cater to purchase, inventory management and HRMS. It has a separate tele-calling team to address opportunities in the SMB segment, and is one of the few systems integrators in the country that have a dedicated in-house graphic designer for all electronic and Web presentations.
The group currently employs nearly 750 professionals. Around 360 of these are employed by the KPO services team, while the rest are employed by ValuePoint Systems.
Giving credit where it’s due
Shanbhag stresses that ValuePoint’s success story cannot be told without giving credit to the senior management team which he roped in over the years. “I would say that one of our biggest turning points was when A Gururaj joined us as a Senior Vice President. He gave another lease of life to the company with his new ideas, and he has certainly taken the company to world-class standards. We also have S Radhakrishna, popularly known as RK, who has transformed our enterprise solutions and software business. ”
Shanbhag believes that delegation is the single-most important factor behind the team’s success. “After you spot good talent it is important to nurture that talent, and the best way to do so is through trusting and delegating and thus providing space for the person to grow. In our organization, everyone has clearly demarcated roles and objectives. This leaves us with both time and space to address the larger issues that face the organization.”
The man values qualities such as hard work and dedication. To keep team spirits high, the company has adopted a culture which Shanbhag describes as ‘Earn & Share.’ He also ensures that the office has an open atmosphere.
Goals ahead
Though Shanbhag thinks that the next six months are likely to be tough, he is still hopeful of clocking around Rs 250 crore of revenue during 2009-10. “This year we want to position ourselves as a premium IT services organization with a global footing. We have plans to grow inorganically in the next three years, and we would like to launch an IPO. My ultimate goal is to share the wealth with all colleagues and associates.”
Other goals include a direct presence in at least 10 countries and across all major geographies in the next five years. Being a bottom-line focused businessman, Shanbhag has also set the goal of achieving an operating margin of Rs 100 crore within five years.
Personal front
Shanbhag confesses that in the past two decades he has had little time for himself or his family. “All this time it was business first, while family and my personal health came second. The priorities have reversed since I turned 40. Now my health comes first.”
He says that though he was always clear that he wanted to be in the technology business, he now feels he is open to doing business outside IT.
Shanbhag is also keen to support some charity, and wants to associate himself with an NGO in future. I would like to be remembered as someone who gave back to society more than what he took. I want to be remembered as a good human being, as a person who conscientiously strove to live up to his convictions.” |