ALKHOBAR — Hari Padmanabhan, deputy managing director, 3i Infotech visited the Kingdom recently to discuss his firm’s progress in the Middle East market and to emphasize the importance of companies investing in improving back end systems in order to maximize profits.
Global IT solutions and services provider, 3i Infotech, has been ranked as the third biggest Enterprise Application Software (EAS) vendor in the MENA region by IDC. Padmanabhan stated that the company has been able to increase revenue by taking a more vertically-specific approach in the market and has been particularly successful in the financial sector, logistics, process manufacturing and the automobile sector.
Padmanabhan knows the Gulf region well, starting Insyst Technologies in Dubai in 1986 and then coming to the Saudi market in 1995. In 2001, his firm was acquired by 3i Infotech. Padmanabhan said that 3i Infotech continues to grow revenues at “80 to 100 percent per annum which can be chalked up to both acquisitive and organic growth — we’ve acquired about 30 companies so far.”
His prediction for future profits is bullish, even in the current uncertain economic times.
“3i Infotech is truly a global company and this helps keep our profit outlook strong. We realize there are points in time when different parts of the global economy are doing well or not so well. Now, looking at the Middle East and Saudi Arabia, while it’s true that the size of the economies can’t be compared to a huge economy such as in the United States, the business outlook has been and remains, attractive,” observed Padmanabhan. “Yes, there are years here that are better than others, but we don’t see the huge highs and lows of some other economies. Plus, when it comes to IT, the economies in the Middle East are still in a state of growth. There is quite a way to go in adopting new technologies and upgrading systems. There is also quite a need for the region to automate and become less people dependent in certain ways.”
Padmanabhan’s team is serving more than 60 ERP customers in the Kingdom — mostly medium companies and a few larger enterprises. One of the biggest growth areas currently, is in the insurance sector, as many new licenses have been issued and all these new insurance companies require total solutions and services. 3i Infotech continues to win projects in part due to the fact that they have a fully staffed organization in the Kingdom.
“We have brought people in who have the initial expertise and experience, but we see that to take the company forward over a long period will only happen if we have nationals onboard. There are challenges in terms of skill sets and that can mean greater training requirements but our commitment is here,” said Padmanabhan.
According to Padmanabhan, Supply Chain Management (SCM) and Customer Relationship Management (CRM) are the most popular functional markets in the region, while the financial and process manufacturing vertical markets are the biggest spenders, followed by the governmental sector, discrete manufacturing, retail and telecoms.
To serve the lucrative financial market, this week 3i Infotech, launched its “Business Execution Outsourcing” model at Bahrain’s MEFTEC 2008 — a banking & financial services technology event for the Middle East and Africa region. Padmanabhan explained that Business Execution Outsourcing aims to comprehensively address the challenges faced by the Banking, Insurance and Financial services business, many of whom are reinventing themselves as financial services “super markets.”
Under the Business Execution Outsourcing model, 3i Infotech is combining its own software products that have found wide acceptance in the field, with IT infrastructure management, including hosting, and back office processing services. This allows the company to offer a single point solution to Banking, Financial Services and Insurance (BFSI) institutions. With its focus on Universal Lending, Factoring, Payment solutions as well as core systems for asset management and insurance companies, 3i Infotech offers a range of products and services which translate to effective customer solutions that not only address their current challenges, but can be seamlessly extended to cover future areas of growth.
3i Infotech recently launched its first International Data Center in India, which has enhanced its capability to offer various Managed IT Services. The facility is spread over 25,000 sq. ft, conforms to tier-3 International Data Center standards and provides secure data center and hosting facilities for existing and potential customers globally.
“With the return to the region of a significant amount of funds, there is a desire to invest those monies in Islamically-acceptable ways. This is resulting in the creation of new brokerage facilities and other financial institutions which require significant amount of support in terms of IT infrastructure and back office processing,” said Padmanabhan. “In order for these organizations to find a service provider they require an organization that can offer a turnkey solution managing the Business Process Outsourcing and managing the infrastructure and delivering on it. That is where we come into the picture.”
There is a human resource issue across the board in the Gulf region and 3i Infotech believes that outsourcing is the most effective way to meet the challenge.
“Some Gulf countries have more expatriates than nationals. All Gulf countries want to reduce dependence on expatriates in lower level positions,” said Padmanabhan. “Automation can diminish the need for paper pushers. So from that perspective, IT has a lot of potential in the Gulf region. The possibility that IT brings to the table, is moving elsewhere any part of the work that is non-critical, that is repetitive, that is not part of the knowledge economy. Technology allows the work to be moved, rather than bringing in people to do that work — while still achieving better turn around times.”
He continued, “Our Business Execution Outsourcing model will help banks, financial services and insurance institutions focus on their core activities of product development, marketing and risk management, while leaving the repeatable operational aspects to be managed by (us). In economies such as Saudi Arabia, where there are severe human resource questions in terms of availability of the right skill sets and in the right numbers to do the tasks, our outsourcing model allows for market facing activities to be done in the region as required and for non-market facing, back office activities to happen elsewhere. This makes it possible for organizations to grow at the pace needed as per market requirements, address the market effectively and faster, plus provide a higher level of service at a lower cost point.”
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