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.
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.
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(This story appears in the 04 October, 2013 issue of Forbes India. To visit our Archives, click here.)
Think the verdict is out there! Ramco has been on path to profitability and announced its break-even with a small profit last quarter. With large clients like Malaysia Airlineson May 29, 2014
I strongly feel that RAMCO has got an excellent product for the HCM space. Strong Leadership, Vison and Focus on marketing was lacking and Virendra Agarwal is the right person for taking the journey further and fasteron Nov 15, 2013
It has been over a year and half that VA has been in charge, fiscal results for six quarters have flown under the bridge, the erstwhile best of the company have been packed home and replaced by \"six senior executives to spearhead its global growth plans\". If one were to now make a reasonable guess at the answer to the question asked in the header, what is the most likely possibility. It is not just that neither VA, or his champions have never fended for an indigenous product and known to have won. Frankly, he is as bereft of ideas now as he was when he walked in. It is one thing to talk about \'being a Google\' or \'humbling a Workday\' (the famously \"inspirational\" bluster which VA and his team put up) and another to dig in with the facts and realities to have a semblance of a strategy.on Nov 3, 2013
Article is OK but it is Sad that ramco has lost some outstanding people in the last few years. I was a Ramco customer for a long time untili I made a switch to another company providing true HR on the cloud. Pity is that Ramco had some great people who have battled very adverse conditions against stiff competitions and they have left. the new team is far from impressive.on Oct 24, 2013
When the processes are good enough customers will comeback otherwise products will come back!!! Ramco's HR and recruitment system is pathetic, giving basic computer aptitude questions of primary school level to freshers' as well as middle level executives...the rooms are not ventilated well with stinking sweat smell and of Course you are badly greeted by the security who wont allow you to park your car inside the office space, so you need to park at main road for the traffic police to book it and tolled away..the people who come to take interview look like labors from field with no professional sense..the tamil accented English and culture everywhere.. so to conclude Ramco is not the first choice for any IT professional, also they offer salaries which are a pity!on Oct 1, 2013
There is business rule in first 3 years business or company turnaround is must if not mean they are surviving or going to shut the doors , in lucky cases very very few survive , best example see the world wide new establishmentson Oct 1, 2013
Good to know some one is focusing on the marketing aspect of the company and the product. As an alumni of Ramco Systems and probably one of those who sold their first ERP Marshal, I wish them to do well like their peer IT companies founded during the same time. I still remember the days when Mr. Raja had nurtured this company and the product to counter MNC ERP\'s when ERP was a concept and not a commodity like today.on Sep 28, 2013
Any product should speak for itself and marketing could only be icing on the cake. Use any of the Ramco products and you would get to know the sorry state in which they are. It would be good if the CEO could muster all his strengths to improve the products first and then do vehement marketing. Until then marketing the products in the uncharted lands would only be a deceiving exercise and could easily backfire.on Sep 27, 2013
If memory serves right, Ramco has clocked success stories with an extremely complex software like ERP at some marquee customers in US, Europe, ASEAN and MEA (even leaving aside India) since late 90\'s. No mean feat this, esp. doing things, as they say, \"away from the markets\". Amazing too is a company this size, sustaining in so many markets for nearly two decades, still capable of notching up successful case studies. One hopes the end diagnosis is not too simplistic or proxy for a goal quite Herculean.on Sep 26, 2013
I agree that Ramco should be close to the market, else it will be difficult to deliver a great product. For instance we tried to test Ramco HR suite for our company which is in the staffing space. But at the end of day we all felt that it was not really adaptable to the special needs of the staffing industry. Yet I was pleasantly surprised to see Ramco promoting itself in staffing forumson Sep 26, 2013
The jury is still out on what VA\'s actions have brought to Ramco, apart from his coterie that VA always takes whenever he changes jobs. The Product promise mindset is sadly a victim in this so called transformational exercise. Blaming the people who have created Ramco from scratch is the easiest part and letting go of people is the next easiest part. The challenge is to be inspirational, set new vision, motivate employees and deliver results.on Sep 26, 2013