In Good Company

In Good Company: Software firm Ramco's 'VA' has his head in the Cloud

Software company boss Virender Aggarwal is at his most passionate when he's discussing technology

Mr Virender Aggarwal, chief executive of Ramco Systems, knows what it is like to feel the world is collapsing around you.

In January 2009, as the top man for Asia-Pacific, Middle East and Africa for Satyam Computer Services, a Big Six Indian outsourcing firm, he was summoned with other top executives to the company's Hyderabad headquarters for what he thought was a routine meeting.

Gathered at the Novotel Hotel, he remembers a senior colleague staggering into the room, face ashen and so shaken that the Blackberry phone he was holding fell out of his hands. Dr B. Ramalinga Raju, Satyam's founder and CEO, had just admitted to cooking the company books on a massive scale and gone to the police with his confession. India's biggest corporate scandal had just broken, sending tremors around the world and shaking the nation's much-admired outsourcing industry to its core.

A few hours later, Dr Raju, who is known in Hyderabad as the "man with the Mona Lisa smile", calmly addressed his top executives, advising them to look after their customers and holding out assurances that none of them would be blamed for what he had done. Satyam executives quickly anointed one of their own as an interim CEO, and within no time, the company found a buyer, eventually to re-emerge in good health as Tech Mahindra.

Still, it was a period of crushing disappointment and confusion.

There was fear that Qantas, a huge client, would have its operations disrupted or that a prime minister may not be paid his salary in time because Satyam ran his government's payroll systems. None of that came true, fortunately.


Ramco Systems chief executive Virender Aggarwal joined the firm after a chance meeting with its vice-chairman P. R. Venketrama Raja led to a friendship that often saw "VA", as Mr Aggarwal is known in the industry, offering free advice on changes Ramco needed to make. VA thought the firm, an early adopter of Cloud technology, had the right ideas, but was poorly run. After a few more meetings, Mr Raja, a chemical engineer himself, invited him to run Ramco. ST PHOTO: KUA CHEE SIONG

"Lawyers were chasing me, offering their services. People were advising me to take anticipatory bail - for what crime I do not know!" muses the 56-year-old Mr Aggarwal, under whose watch Satyam built its Asia-Pacific, Middle East and Africa operations into a half-billion-dollar business.

"On top of all that I had a US$1 million loss - my Satyam stock vested at 288 rupees and 388 rupees had crashed to seven rupees a share, and yet, on top of that, I had to pay tax as per the stock price on the vesting days!"

That burden, he said, led him to seek another job rather than go with his first instinct to promote a start-up technology firm. HCL Technologies, India's No. 4 outsourcing company at the time, came calling, with an offer that he head up their emerging markets division. Offers came from elsewhere too. By April 2009, he was out of Satyam.

"HCL people camped here in Singapore and said they would not leave until I signed their offer," he says in a matter-of-fact tone, devoid of conceit. "I joined the next day. I've never had a break in career lasting more than an evening."

NO LONG CAREER BREAKS

I've never had a break in career lasting more than an evening.''

MR VIRENDER AGGARWAL, chief executive of Ramco Systems.

Three years later, he was named CEO of Ramco Systems, the IT division of a prominent cement maker based in Chennai. While in the city on HCL work, a chance airport encounter with Mr P. R. Venketrama Raja, vice-chairman of Ramco Systems, led to a friendship that often saw "VA", as Mr Aggarwal is known in the industry, offering free advice on the changes Ramco needed to make.

VA thought the company, an early adopter of Cloud technology, had the right ideas, but was poorly run. After a few more meetings, Mr Raja, a chemical engineer himself, invited him to run Ramco.

Mr Aggarwal says his first instinct upon taking the job was to wonder whether he had made a poor career decision. "We were bleeding cash, choking on interest payments and our cash losses were about the same as our revenue. We were also overstaffed. People were not willing to align with the change agenda. Staff were coming into work two hours late and they were wrangling over which cabins had sofas."

Swinging around such a company needed knocking some heads. The mild-mannered Mr Aggarwal, who speaks in short sentences and in a low voice, seems the unlikeliest man for the job, but what followed is generally acknowledged as a turnaround story.

  • Fast facts
     

    THE CEO

    Mr Virender Aggarwal has been chief executive of Ramco Systems since May 2012. He is 56 years old, married with two children and is an India-born Singapore national.

    Almost his entire career has been spent in the outsourcing industry.

    He was previously president at HCL Systems, and prior to that, director and head of Asia-Pacific, Middle East and Africa for Satyam Computer Services.

    Mr Aggarwal has also held positions at NIIT GE Capital and the consulting company AF Ferguson after starting his career with Wipro Technologies in 1982.

    He has a degree in business management from Birla Institute of Technology & Science, a premier engineering university in India.

    THE COMPANY

    Ramco Systems is one of the first to offer a full-featured Cloud Enterprise Resource Planning (ERP) product catering to enterprise customers with the latest mobile technology and cool interface using bots.

    Ramco focuses on aviation software, human resources & payroll, and ERP solutions based on Cloud.

    Its customers include consumer goods companies such as Panasonic, Schneider Electric, Emirates and Malaysia Airlines. Headquartered in Chennai, southern India, it employs 2,000 people.

Taking advice from Harvard don Boris Groysberg, who conducted a three-day workshop for Ramco, the company trimmed its product lines and focused on two that were targeted at big customers.

From 1,780 staff, Ramco cut its workforce to 1,500 and employees were forced to accept a 15 per cent pay cut, with the promise that they would be compensated if productivity improved.

"I told all my sales staff to send me an e-mail detailing their sales pipelines," he says. "Those that did not respond in three days, I fired them all. If they can't respond promptly to their CEO, what chance (is there) they will respond to their clients?"

VA says he asked for the smallest desk in the office for himself. A Singapore Air PPS Solitaire member, a privilege he retains, he insisted on flying budget everywhere except for long, intercontinental travel for which he travelled business class.

Staff who called him knew they would get US$100 (S$140) every time their boss did not pick up the phone within two rings.

The changes had their effect. Revenue per employee, which had dipped to US$1,100, climbed to US$3,300. When he took charge, Ramco got almost all its business from India. Today, three-quarters of the money comes from overseas, with Asia a significant growth driver. And he reckons the "VIP" countries - Vietnam, Indonesia and the Philippines - are the most promising Asean markets.

Quarterly revenues have doubled to about US$17 million since he started, although they have flattened lately. VA says this will be the case for a while yet as the move to Cloud gathers momentum.

But the strong pipeline of new business won, and the increasing size of contracts, is encouraging. That list of clients includes names such as Panasonic, which migrated all its 20,000 employees in Malaysia to a Ramco HR management platform, DB Schenker and Malaysia Air.

"In the traditional, on-premise mode of outsourcing, if you book a US$25 million contract, you can count US$10 million as revenue," he says. "In the Cloud model, that comes down to US$3.5 million, as the revenue is more spread out.

"In Cloud, you only pay for what you use. IT cost is a variable and favours the buyer. I have a customer in Australia from whom I am making less, because his customer base is shrinking."

Mr Aggarwal firmly believes this is the model of the future, and the days of arbitraging labour - on which the major Indian outsourcers rode to global success - is severely threatened. Having written more than half a million lines of code and with a deep interest in science, VA is at his most passionate discussing technology. What's the new, new thing in the software field? Artificial intelligence and robotics, he says unhesitatingly. Indeed, with speech recognition improving to almost full accuracy, people may well forget how to write. "We coined a phrase for it at Ramco - ZeroUI," he says, referring to Zero User Interface.

Conversation with machines is the new UI. In the pipeline is Ramco Genie, an intelligent program that reacts to transactions on its own, using deep learning, common sense and cognitive computing.

While a tech enthusiast, he also worries about the future of work as anything repeatable gets taken over by machines. Not only the threat of social unrest, but there is risk to society as well from the tearaway march in innovation, he fears, wondering if a rogue robot may one day deny a human entry into his own house or bank locker.

"My view is that since I cannot control any of that, I would rather be in the forefront of that change."

Singapore, his adopted nation, needs to seriously think about where it wants to position itself in this environment, he believes, adding that bold steps need to be taken.

Commending the work done by its Economic Development Board, he nevertheless feels that if not in driverless cars, Singapore should have taken the lead in electric cars at least. The people too could use some conditioning. Just as men here do national service, Singaporean youth must be sent out of the country for a period to get a better sense of coping with the world outside.

At Ramco's Singapore offices, which are both regional HQ and Mr Aggarwal's own operating base, the atmosphere is funky. Staff have free access to a bar. All organic food consumed is on the house. VA himself often acts as a barista, serving coffee to staff.

That said, he acknowledges that it is not easy to maintain a start-up culture for too long.

"I wish I could do a tenth of the things I did in my first year in the job. At that time, company survival was at stake and provided enough justification," he sighs.

As I wound up my meeting, I could not help but wonder if this entrepreneurial manager had his head in the Cloud, in more ways than one.

A question on the car he drives drove away my misgivings. "Oh, a Volvo," he responded. "I would not buy a Maserati even if I could afford one. I bought my first (Hugo) Boss suit five years ago and only because my daughter complained about my poor dress sense."

A version of this article appeared in the print edition of The Sunday Times on May 14, 2017, with the headline 'Ramco's 'VA' has his head in the Cloud'. Print Edition | Subscribe