Virender Aggarwal is effecting a painful change at Ramco. Will he succeed?
Among Indian tech firms, Ramco Systems has a reputation that its peers only aspire for. Engineers tend to say nice things about its products. Even its rivals speak of how Bill Gates, when he was still the CEO of Microsoft and Microsoft still dominated the information technology scene, launched one of its products. For long, it had the handholding of CK Prahalad, a much-sought-after management guru, because he believed that India could build a global IT product, and Ramco just might be that company.
All well, except for one small detail: Ramco never really made any money. By end of March 2013, it had accumulated losses of Rs 62.9 crore, which may look small, but sits uncomfortably in a company that started product development 20 years ago. The joke among journalists who cover Ramco is that its turnaround story is a never-ending one.
To be fair, Ramco adopted new technologies—solution accelerators, cloud, etc—ahead of its peers. “The most important advice Prahalad gave us was about the clarity and persistence of vision. He told us you can’t compete with the big guys—the market is dominated by five large players—by being marginally better than them. You have to be dramatically different, and give much higher value than the rest,” says PR Venketrama Raja, vice chairman and managing director of Ramco Systems.
Raja believes the payoff time is closer than ever before. “After a long time, Ramco might have got it right,” says Sunil Padmanabh, research director at Gartner, who has been tracking the company and the IT products space for years.
Enter Aggarwal
One of the reasons for the new perspective is a raft of changes at Ramco in the last several months. On top of these changes sits its new CEO Virender Aggarwal, who moved to Ramco in 2012 from HCL Technologies. In many ways, he is the opposite of his former boss Vineet Nayar, who was by many accounts a marketing type—gregarious, hard talking and boldly confident. Aggarwal, on the other hand, is a techie type: He talks in short clear sentences. But he had also displayed enormous business savvy at HCL, growing its emerging markets portfolio to half a billion dollars.
The reason why its products scored low on usability had to do with Ramco’s culture. It had always been an organisation dominated by engineers—not least because its promoter Venketrama Raja, a chemical engineer from Madras University, had a passion for products and engineering, and has been closely involved in its operations. (Raja, along with Ramco Industries and Madras Cements, own 68 percent in the company.) And engineers aren’t always the best people to think of products with lay users in mind. So, one of the first things Aggarwal did was to stress on usability. He hired over 20 usability experts (Ramco employs around 1,200 people) and made it known that nothing would go to customers unless the usability team gives the go-ahead.
(This story appears in the 04 October, 2013 issue of Forbes India. To visit our Archives, click here.)