Ram Yeleswarapu, President and CEO, Take Solutions

Ram Yeleswarapu

K. Bharat Kumar

It's not often that a company sticks to a couple of core areas. It's even less often that you find one that wants to disclaim similarities with the IT software services sector.

Take Solutions' President & CEO, Ram Yeleswarapu, met with eWorld to explain what his company did, during the last year or two of the slowdown, in its core areas of life sciences and supply chain management. Excerpts:

You have been servicing clients in life sciences and supply chain management. How did you navigate the two years of the slowdown?

Our focus continues to be (in these two areas); we have not strayed from there. Within these, the slowdown in product licence revenues for FY10 actually made us look around and ask What revenue opportunities were we leaving behind?” We have added a whole portfolio of business services, surrounding life sciences and supply chain management. The last 12-18 months have seen a tremendous increase in SG&A spends (Sales, general and administration - typically, companies in sales targeting a future increase in orders and revenues) for us. We have also added a number of clients, along with intensifying relationships with existing customers - bulk of our activity stems from these.

We have been working with most major pharmaceutical companies and global biotech companies for a long time. But we were providing them product licences in certain areas, such as in the clinical regulatory space. Now, we have augmented the service offering, we have expanded it horizontally and deepened relationships as well. For example, we used to offer services in the clinical area, we have now expanded into the regulatory and safety area. It's all related — all of these are in the clinical research category. It's fundamental and core to our business, so we have expanded horizontally into adjacent areas of clinical regulatory safety. And likewise deepened relation with customer as well, taking on more studies, more trials, more products, and more therapeutic areas.

To some measure, NAFTA preferential treatment for manufactured products is calculated based on the parts used during manufacture. The source of the parts, the program under which they entered Mexico and the duty schedules in effect throughout the manufacturing process determine NAFTA eligibility. Implementing NAFTA compliance software to maintain this data is a cost-effective solution.

Could you elaborate on how you have extended horizontally?

We have added specific service offerings such as DMC — Data monitor committee. It's basically expert advice, where we act as a liaison between the Sponsor Company and FDA. You play the role of an unbiased third party adjudicator, sitting between the sponsor and FDA. We developed the platform, so we offer that as a service. Our CRO outfit chief works closely with the FDA in defining their norms for some of the DMCs in the country. Another example would be our work in the area of Clinical Data Management, where we work on C-Disc conversion — this entire move was towards taking legacy data and dispersed forms of data through the human trial process and giving it a standard nomenclature and form, so that the regulator at the other end, receiving the data, can then get it in a consistent way. Analysis, parsing feedback and queries all become fairly consistent.

Today, SEI, one of our subsidiaries, is one of the only 16 global solution providers of C-Disc solutions.

One major pharmaceutical company that awarded a contract to a competitor eventually came back saying it (the competing vendor) doesn't have the subject matter expertise. That is a big plus for us. The differentiator is clearly the focus on SMEs and domain experience. In this particular example, we were brought back to actually manage, supervise, quality-manage Project and coordinate in all aspects. Even if we came in second in the initial round in the Request for Proposal stage, going by the initial order, we were brought to front fairly quickly. Actually the firm that won the order didn't have people to engage, they were looking for sub-contractors. So, that is how things are!

We also work closely with NDA or new drug applications. It's like getting listed on the stock exchanges in India. Someone would file a prospectus with the regulator in India for getting listed. NDA is that kind of complex dossier. It has several thousands of documents in it, it's a culmination of the drug development process or device development process. Ours is a publishing service. As we started augmenting our portfolio, we have added procurement services, sourcing, engineering and business services. All of these services, both within life sciences and supply chain management, have actually propelled our performance and visibility to new orders. We have had a strong quarter ended June 2010, this quarter looks great, as does the rest of the fiscal.

How do you plan for business in your industry which isn't really comparable to true software services? Do you acquire skills and then hope for business to come about?

(This happened)…once we started noticing the trend that capital expenditure, for clients, was becoming operational expenditure. Instead of buying product licences they would actually say can you take this engagement and help me out'? That was the overall philosophy that we experienced as a company in the last 12-18 months. So, if I want to sell the licence for an R&D product I have, the client would rather have me deliver the work output. For, in these times, he would rather not have capital expenditure but would want to optimise operationally.

As we were witnessing the drop in licence revenue, which is what impacted us in FY10, we did not shy away from SG&A increase though. Our focus was - we have a basket of customers we had already built, the cost of acquiring new customers will obviously be higher than going to my existing customers and saying we have added these services to our business services, etc.Our new services were not a brand new thing (for us); it's not like we have to learn something new all over or hire new people. It's the same research process and the same data. We had the people and the awareness, just that we were not selling those before.

Why not?

We were focussed purely on the product. But in hindsight, all was well for us including the slowdown, because as we look ahead, this is where we will get critical mass and a huge credit in terms of top line services. Another way of describing the same thing would be - our earlier revenues split 50:50 between services and products. Now, we have $2.70 from services for every dollar in product licence revenues.

I think we can double it from here safely to get to the vicinity of $5 in service revenues for every dollar of product licence. It's not IT services, these are hardcore SCM business services.

We will increase our headcount, it's not a linear story for us. We will probably go up to maybe 1,200 by end of this FY '11, from about 900 now. Every service or product we create, we end up moving the essence of all those processes, the IP into the platform. This is what helps in scaling our offering. So, as we start drawing on functional engagements, increasing our top-line growth, the proportional increase in headcount need not follow.



Registered Office

No. 27, Tank Bund Road,
Chennai - 600034, India

Email : contact@takesolutions.com

Phone : +91 44 6611 0700/701

©2022 TAKE Solutions Limited