Hexaware sees strong order pipeline; 20% growth: Nishar

Atul Nishar, chairman, Hexaware, says that we remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve.

Atul Nishar, chairman, Hexaware , says that we remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve.

He also says that currently there are five deals in the pipeline and one is in the advance stage. The deals are spread across from the United States and Europe, and across major verticals like capital markets, travel and emerging verticals. And in the last nine quarters the company has signed seven large deals.

Below is the edited transcript of his interview to CNBC-TV18.

Q: Hexaware recently had a deal and there have been reports or analyst notes which suggest that the company is in conversation with potential clients for four deals and one is in advance stages. Do you think something could fructify in the near-term?

A: Currently, there are five deals in the pipeline and one is in the advance stage. The deals are spread across from the United States and Europe, and across major verticals like capital markets, travel and emerging verticals. And in the last nine quarters we have signed seven large deals.

Q: Are billings under pressure even if the deals are coming? Are they coming from tight fisted managements?

A: In over last two years, we have marginally improved our average billing on both on onsite and offshore. We don’t see any pressure on pricing on the IT industry. Repeatedly, we have guided that our pricing should be assumed to be stable.

The important point is that the client want value, greater performance, result oriented projects and fixed priced or greater commitment by off shoring companies.  Clients do want to cut their costs and get more value, but they also know if it is all done at the cost of the service provider, it will not sustain that particular situation.

Q: How much do you think is Nasscom’s 13-14% growth target under threat? What might it fall to half or high single digits?

A: Nasscom has guided for 11-14% and it is a wide enough range. In the industry we saw that some companies like mid-sized companies and companies who are scale players have also done very well. It is a mixed reason. We have seen more client specific issues coincidence for downsizing for whatever reason that may dent revenue that doesn’t mean they will not be able to grow in future.  

Q: Do you think Nasscom will hold the lower end of their 11% range?

A: That is the current optimism. So, there is no reason to believe that there is material change from the guided number.

Q: The one concern around Hexaware has been for some time that you have seen an improvement in margins, but going forward it would come under pressure because in Q3 wage hikes are expected to shave off margins to a certain extent. How do you respond to that?

A: In Q2, ours being calendar year, Hexaware reported 22.9% EBITDA which was higher than Q1. We gave normal 10% increment to all our off shore employees. The impact was absorbed in our margin and in spite of that the margin improved.

We also absorbed the significant visa costs that traditionally come in that quarter. In the coming quarter there will be onsite increase in wages. For off shore workers the date of increment is April 1 and for onsite employees the date is July 1, which remains unchanged. And we feel with this we can guide stable margins.

We are proud that at Hexaware, we have grown at higher than the industry average at good margins. We don’t believe in taking new deals by compromising on margins in any manner.

Q: So at this juncture you don't want to change your guidance of 20% dollar revenue growth any which way, up or down?

A: We remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve. 

 

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show »

 

 

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Job: Peoplesoft Tester In Chennai

Title	Peoplesoft Tester
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Location	Chennai
Job Information	3-5 years of experience in ERP Related Product Testing.
	Knowledge of complete testing life-cycle and different testing methodologies.
	Min. 2 – 3 years of hands on experience on PeopleSoft – HRMS.
	Min. 1 year of experience on writing Test Scripts on PS Payroll Module.
	Good knowledge on HP QC.
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Short-term contracts give mid-cap IT cos new lease of life

With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Midcap IT players may get a new lease of life. With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Over the last few years, uncertain times have forced IT companies to go in for more short-term contracts. For mid-cap IT companies, this may have been a blessing in disguise.

Data from outsourcing advisory firm TPI says that around 700 contracts will be up for renegotiations this fiscal year, compared to 530 last year.

“There is a significant reduction in the tenure of contracts as they were originally signed. Compared to 10 years ago, when 500 of these were being done, there are 1000 a year. The tenure has gone down to five years instead of seven, so a lot of deals are naturally coming back to the market as renewals. In itself, this is a very large opportunity,” said Siddharth Pai, partner and MD at TPI India.

For many IT players, this may be just what the doctor ordered. After all, renewals account for almost 65% of the outsourcing market. Advisory firm Everest estimates that by October 2013, deals worth nearly USD 85 billion will be up for renewal.

These include a contract between HP and Bank of America, a mega deal from Shell group which is currently with AT&T, HP, and T-Systems, a blue cross blue shield deal with Dell and Manu Life's deal with IBM.

Many of these contracts are expected to be broken up into smaller chunks, as outsourcers are looking increasingly towards multi-sourcing. Analysts say this could work in the favour of the smaller players, especially those like Mindtree and Hexaware, which have been focusing on developing niche capabilities to help differentiate from larger players.

 

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Hexaware Technologies :Riding High! --nirmal bang,

Riding High!
Hexaware Technologies Limited (HTL) is a mid-sized IT company mainly catering to the capital markets (BFSI) and the airline (transportation) sector. It also focuses on enterprise software provided by PeopleSoft and Oracle. Recent large client wins has bought back the focus on this company which has good expertise in the niche areas. 


Investment Rationale

 Improved Revenue visibility due to large wins in the past 5 quarters

The deal wins of over $ 625 mn which HTL has gained in the past 5 quarters is commendable. HTL’s efforts of mining the existing clients in the gloomy days are paying off now reflecting in the incremental revenue streams it has earned. These long term deals give enough revenue visibility for CY12. In addition, HTL is negotiating almost 4 deals above $25mn which are in the pipeline.

 Margins moving northwards – room for further heights
EBIDTA margins have improved 812 basis points in the past 5 quarters led by drastic control in the operating costs. The company has in addition utilized its offshorablity lever in its advantage by moving almost 14% of work offshore during the same period. Currently, onsite: offshore mix stands at 53:47, utilization in early 70’s and plans to hire freshers would further aid the margins going forward. We expect HTL to report EBIDTA margins of 20% + in CY12E and CY13E.

 Proficiency in niche segments paying off
HTL earns 60% of its revenues from the Capital Markets and Travels industries and almost 30% of revenues come from enterprise solutions in terms of its service lines. In enterprise solutions, 60-65% of its revenues are from PeopleSoft where other software vendor’s focus is less.

 Guidance Revision of 20% on USD revenues for CY12E

On the back of good deals won recently, the company has revised the revenue guidance in USD terms to 20%. We feel this is a little conservative and the company can easily beat the guidance for CY12E.
Valuation & Recommendation

We expect HTL’s revenues to grow at a CAGR of 25% and adjusted profits to grow at a CAGR of 21% over CY11-CY13E. Margin improvement would remain under focus and we expect HTL’s EBIDTA margins improving by 313bps to 21.2% in CY13E from 18.03% in CY11. At CMP, the stock is trading at 10.4x and 8.6x for CY12E and CY13E respectively. On the back of improved financials and good revenue visibility, we recommend a BUY on the stock, assigning a target multiple of 11x for CY13E EPS with a price target of Rs. 147 which is a potential 28% upside.

Risks to our Rationale:

 Concentration in Discretion spending Revenues
Hexaware derives more than 50% of its revenues from Enterprise solutions and Business Intelligence and Analytics which could get affected in economic downturn. However, the recent deal wins re-affirms the revenue visibility for the company for CY12E.

 Industry Risks of wage pressures, rupee appreciation and competition
Rupee depreciation has acted in favor of the company and Industry per say. Any severe reversal of the rupee trend would affect the prospects of the firm.

 Exposure in the European Region
The company has 28.4% exposure in the European region and few of the major deals have been signed with clients in this region. Looking at the current economic scenario prevailing in the Euro zone, any delay in commencement of these deals or cancellation may impact the margins severely.

Valuation & Recommendation
We expect HTL’s revenues to grow at a CAGR of 25% and adjusted profits to grow at a CAGR of 21% over CY11-CY13E. Margin improvement would remain under focus and we expect HTL’s EBIDTA margins improving by 313bps to 21.2% in CY13E from 18.03% in CY11. At CMP, the stock is trading at 10.4x and 8.6x for CY12E and CY13E respectively. On the back of improved financials and good revenue visibility, we recommend a BUY on the stock, assigning a target multiple of 11x for CY13E EPS with a price target of Rs. 147 which is a potential 28% upside.

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Hexaware Q2 net rises 48% on higher revenues

Software service provider hexaware technologies has reported a 48 per cent increase in net profit at Rs 89.03 crore for the second-quarter ended june 2012 against the same period last year.

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Hexaware bets on UK, new verticals to lead mid-tier IT growth

Infosys, TCS and Wipro may be getting cautious in their outlook, but not hexaware technologies

.

After nine quarters of positive growth, the mid-tier leader is confident of a 20% year-on-year (yoy) growth in dollar revenues for fiscal 2013.

 

 

 

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AUTOMATION OF BW QUERIES USING WEB BROWSER

In the fiercely increasing competition amongst corporations it has become mandatory to make quick and sound crucial business decisions based on analysis of business critical data. This is the point where SAP BW comes into play. BW Queries are the core of the reporting and analysis functionality in SAP BW. They provide a flexible and intuitive platform for data analysis that can be developed using the SAP Business Explorer (BEx) Query Designer.


AUTOMATION OF BW QUERIES – OVERVIEW


The Automation of queries in SAP BW is require where the data from BW is extracted by reporting analyst using the BW queries and send to business frequently on a regular basis for their analysis for example monthly or weekly.


Queries using web browser can be configured to be run:
Only Once: We can schedule the BW queries to be run on a specific day or time to be refreshed and sent to the email id of the recipients.
Scheduled Basis: We can schedule the BW queries to be run on a regular basis i.e. every day, specific day of a week or monthly basis.


This document outlines a set of guidelines to automate a query for a given scenario.


PROCEDURE TO AUTOMATE THE QUERIES USING WEB BROWSER:


Step 1: Log in SAP BW using the User Name and Password. Enter the RRMX as transaction code into the transaction window and hit the Enter. New Excel window will open with the additional BEx (Business Explorer) tool bar.

Step 2: Open a query which you want to automate through BEx and refresh the same.

Step 3: Launch the query in web browser.

Tool Button –> Launch in Web Browser –> Query (Default View)

When you click on the Query (Default View) it will pop up the message box asking the user name and password.

While you enter the user name and password it will populate the query in web browser.

Step 4: Modify the output structure of the query according to your requirement using the Variable screen at the left side of the window

Applying filters


If you want to apply any filter on the query then you can do that using filter icon against the characteristics. (Ex. If you have to produce the report for particular business unit only then click on the filter icon in front of Master Cost Centers it will pop up another window. Select the Business unit as per your requirement and click on transfer at the bottom left.)

If you want to set the properties of any characteristic then right click on that it will pop up window and select the properties. It will pop up another properties window that will allow you to change the properties of the characteristics.

Step 5: Information Broadcasting: When you are done with the formatting of the query click on the Information Broadcasting and mention the email addresses of the recipients whom the report needs to be sent then click on Create new Setting with the Wizard.

Step 6: Select on the check box as Zip File, it will create the Zip file for the report then click on continue at the bottom.

Step 7: Enter the subject line for the report and enter the E-mail content in the content window and continue at the bottom.

Step 8: Insert the technical name and description for the automated report.

Step 9: Schedule the report: Select the Create New Scheduling and Periodic All and enter the date which you want to schedule the report for and the schedule as weekly or monthly. Mention the date and time on which you want the report to be sent in front of Next Start at and click on the transfer below.

If you want to execute the report at the time of creation then click on the Execute button at the bottom otherwise close that. Now the report is scheduled for the period you mentioned this will automatically refresh the query in the same format you created on the scheduled date and E-mail this report to the recipients with the report attached in Zip format.
MODIFICATION IN SCHEDULE OF AUTOMATED QUERIES:-
If you want to make changes in the schedule then select the query and click on the Schedule button at the bottom it will pop up the window just create the new schedule and delete the old as well and click on transfer.

The BEx Web query automation is a standalone, comfortable Web application for data analysis that the user can call up using an URL or as an iView in the Enterprise Portal. The Open a query which you want to automate through BEx and offers a wide range of functions for data analysis via various tab pages and the associated view-specific toolbars.
SAP query automation is an information modeling tool which can be used to analyze business data. To help analyze data in a more user friendly manner, SAP BW used to describe any kind of numeric information from a business process level. There are various ways to describe key figures in SAP BW.
Essentially, a query is a database research action with interesting additional functionality like currency scenarios, complex calculation options, and analysis functions. However, analyses born out of queries can be applied flexibly to a multitude of areas in a multidimensional dataset of an SAP BW Info Provider. This is enabled by combining analytical functionality with the provided drilldowns and filter options. Therefore, one query or few queries can often map an entire analytical application.

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ARIS FOR SAP NETWEAVER

Business process management (BPM) allows you to continuously adapt your business processes to new business strategies – modeling processes with different users performing different roles and tasks, and optimizing communication between process owners and IT experts. SAP and IDS Scheer offer a comprehensive BPM solution – SAP NetWeaver and ARIS for SAP NetWeaver. This joint application provides essential elements of a closed-loop BPM solution, from design and configuration, to implementation and execution, to evaluation of the overall process.
There are lots of Business Process Management tools available in market, then why should we choose ARIS for modeling our business processes. Here are some of the features and benefits of ARIS which make this tool different from others.

• ARIS Platform is Highly Scalable and hence complete solution for the Entire Business process Lifecycle – From Web Based Description, analysis, and optimization of business processes and software engineering to SAP Netweaver integration and continuous process controlling.
• ARIS is not just for SAP NetWeaver. ARIS can be used for all SAP initiatives — to design, implement, and monitor SAP, non-SAP and manual processes in an organization.
• The system architecture of the ARIS Platform allows globally active companies to set up distributed scenarios for designing, analyzing and optimizing process, IT and software architectures.
• Business Process Management with SAP NetWeaver and ARIS for SAP NetWeaver provides procedure models, methods, technologies and reference content for modeling, configuring, executing and monitoring these business processes.
• With ARIS Implementation Platform, gap between business and IT is closed. ARIS for SAP Netweaver helps design the process architecture for SAP Solutions that have been optimally adapted to the company’s business process.
• Adds functions to SAP NetWeaver for graphically modeling processes at various levels. At the highest level (Process Architecture Model), the process architecture of a company is built from a purely business perspective, that is, without technical details.

User-Friendly Functionality:

ARIS Business Architect and ARIS Business Designer Web Based Solution enable shared, company wide modeling, analysis, and optimization of business processes, as well as IT Architecture set up via the Internet. With its user-friendly functionality that allows even unskilled occasional users to perform modeling. ARIS Business designer quickly paves the path to professional BPM.

Synchronization between ARIS for SAP Netweaver and SAP Solution Manager:

You can use ARIS for SAP NetWeaver as a modeling environment to import predefined process models as reference content from SAP Solution Manager. You can enhance these models and synchronize them with SAP Solution Manager.
Process models and other configuration elements can be exchanged (synchronized) between ARIS for SAP NetWeaver and SAP Solution Manager. In addition to scope information, structural information is also transferred.
The SAP Solution Manager provides you with the relevant SAP reference models. You can create an implementation project using ARIS for SAP NetWeaver and then synchronize it using the SAP Solution Manager. This enables you, for example, to make SAP reference models available in ARIS for SAP NetWeaver, and adapt and enhance them as required. Finally, you can make the implementation project available again in the SAP Solution Manager, where you can then configure the processes and adapt them to your specific system landscape. The SAP Solution Manager also provides you with an extensive range of functions for monitoring your solutions.

Upload of ARIS Processes to SAP XI:

With the ARIS BPEL export, ARIS BPEL models can be transferred to SAP XI. The elements to be exported must be exported from ARIS Business architect for SAP Netweaver. ARIS creates ZIP files, which can be imported into SAP XI.

Interfaces and development of Add-ons:

ARIS UML Designer is included in the Implementation Platform as a tool for;
Developing add-on functions and interfaces during the implementation. With the addition of classic UML methodology to ARIS, a consistent and uniform visual representation of the requirements of the business world can be obtained. The UML models created in ARIS can be sent via XML to other development tools integrated in Eclipse, which are then available as source code or as J2EE software components from ARIS. This means that software developers can work with (UML) data from ARIS directly in the development environment.

Globally Distributed Process Design with ARIS:

The system architecture of the ARIS platform allows globally active companies to set up distributed scenarios for designing, analyzing and optimizing process, IT and software architectures.
Web-based products such as ARIS Business Architect, ARIS Business Designer and ARIS UML Designer access a centrally set up and managed ARIS Business Server from locations around the world via three-tier architecture. These products are designed for use beyond firewall limits, with a very low bandwidth (e.g. ISDN).

Next Generation of BPM: ARIS embedded in SAP NetWeaver:

In the next SAP NetweaverTM release, the design, modeling and model based configuration will take place in a technically integrated solution, a unified modeling environment as part of the ESR in SAP NetWeaver. There, on the basis of a unified metamodel, users will be able to perform various different role-specific tasks in a unified modeling environment.
SAP AG and IDS Scheer AG leverage the strength of their technologies together to cover the whole business process lifecycle. SAP NetWeaver today offers a comprehensive BPM solution that will be enhanced in future releases providing a unified modeling environment and a powerful combination of Business Process Management and Business Activity Monitoring.

ARIS for SAP NetWeaver contains a consistent description of the process architecture-from enterprise process models to implementation of the processes by SAP Solution Manager, the integration of executable processes in SAP XI, and the applications with SAP Business Workflow.

Some of the key benefits of using ARIS at a glance would be :-

• Get a clear understanding of your process architecture as a starting point for SAP ESA.
• Alignment of business, configuration and service process in one common repository.
• Intuitive and user friendly user interface
• Decentralized Design For centralized optimization
• Available 24 hours a day, 7 days a week and in all locations due to the Web Based Front end.
• Proven , extendable methods for various areas of application
• Highly scalable architecture.

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Living with the Enemy

Just imagine two people who hate each other to death, being forced to live in the same house and continue inflicting pain on each other in every possible way. Do you get the picture?  That is what is happening between Oracle and SAP. To Larry Ellison, there is no other enemy more worse than SAP, and for SAP (even though they downplay it)  the number one in their enemy list is Oracle.

When SAP hates Oracle this much, SAP can not stop being major sales channel for Oracle’s database. Oracle  is still the number one database in the SAP customer base. It’s also no secret that many SAP customers would love to stop paying a premium price for a database that is functionally underused by the SAP product line.

But now there is a hope to SAP,  a new reason that SAP would like to get rid of the traditional relationship between its software and database leader Oracle. If SAP can develop its application to be less dependent on disk database, that  would be the first  step to reduce the dependency.

Speed is Money

That was what was proclaimed  by Mr. Plattner in the Sapphire conference in his key note address. He said the new world of in-memory computing is the next in-thing in the enterprise software.  In-memory database system (IMDS) is designed explicitly for real-time applications and for embedded systems such as set-top boxes, telecom equipment, consumer electronics and other connected gear. The in-memory database minimizes RAM and CPU demands and offers unmatched performance, reliability and development flexibility.

Enterprise software companies could learn from the techniques used by gaming software developing where the in-memory database  usage is already making big impact to get the maximum output from the multi-core CPUs. Mr. Plattner did not promise that SAP is developing in-memory concept into SAP product but he made it very clear that it is the way forward.

Oracle Killer

The desire to kill Oracle is not new found for SAP. As early as 2005, Shai Agassi, the then president of product technology group and member of SAP executive board, elaborated about the company’s programs to improve the in-memory capability of the software. In-memory capability is a new way to manage the data. Largest databases in the world are data warehouses, and these databases get the most complicated queries that they need to process as fast as possible. This requires enormous amount of CPU power. The testing ground for SAP’s new database strategy can be found in a product the company released few years back – the BI Accelerator or BIA. Among its many attributes, BIA is a hardware appliance that runs SAP Analytics incredibly quickly. The potential “Oracle killer” part of BIA comes from its in-memory database functionality, which processes database queries in RAM with no need to access disk-based storage — or even have a relational database at all — which means no costly database license, no massive data-storage farm, no expensive DBAs, and so on.

The idea of in-memory query management at SAP is hardly new. Back in the late 1990s, SAP unveiled LiveCache, an in-memory processor for what was then called the Business Warehouse. LiveCache was a little ahead of its time for lots of reasons, starting with the fact that CPU and memory costs were still relatively high for what SAP had in mind. In the end, LiveCache failed to live up to expectations. But it still survived as the in-memory query engine for SAP’s Advanced Planner and Optimizer (APO) supply-chain product.

LiveCache made history in SAP benchmarking, giving an indication of the response times that are possible using an in-memory database engine. Based on SAP’s own benchmarking standard — the SAP Standard Applications Benchmark — SAP’s hardware partners have had a glorious time leapfrogging each other in recent years to see which could achieve the best response times with LiveCache.

So, It is more of the question of when the killer will arrive. Someday soon, we will have a choice to choose between the status quo and new radical database approach. What will you choose if the newer approach is cheaper and faster and effective?

Read More about  IMDS

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Delivering – Probe SAP

I acted as a midwife assisting to bring ‘Innovation’ mother’s baby – ‘Probe SAP’ to the world. I was the delivery coach and saw every step of the gestation period and how much the mother takes care to bring the baby to the world. It was an uphill task but as with all of our mothers, ‘Innovation’ pulled it through. Kudos to mother Innovation.

Now the midwife’s view. I had the privilege to introduce the baby to the world… What a big expectation it was from different corners for this baby! Fortunately in this case, it was possible to tailor make the baby as per the world’s demand. Even with that flexibility, it was very difficult to meet the expectations. With the privilege also comes the responsibility to take the criticism… ‘I thought the baby would look like Shahrukh Khan, I thought the baby can fly like Superman, I thought the baby would run like Carl Lewis on the first day’ etc. these were the kind of expectations thrown at me during the baby introduction but I am happy the way, we as delivery team worked with expectations and explained to the public what the baby can do.

What the baby can do anyway …

It can analyze any SAP environment and list down all the customizations and come up with the impact of upgrade. The customizations could be anything, any type of objects – Probe recognizes 54 types of objects. The baby has two type of personalities. Inventizer – the uncommitted guy who does not look into the details but interested in getting an overall idea about the person he deals with. Inventizer will give a complete picture of an environment to give anyone an idea on what it takes to maintain or upgrade the environment. The other split personality is Analyzer – the finicky girl who wants to go into every detail and find fault in every little thing. Analyzer goes into the level of identifying the line number where the incompatible element exist to carry out the upgrade. With these, the baby has for sure taken the big leap into the world. Now it requires constant nurturing to turn it into a grown up person to tackle anything in the real world of SAP upgrade and maintenance.

Head mother of Hexaware’s Innovation team, Innovation lead Immanuel has done a great work in directing the team in this delivery. But for his passion and focus in the demanding environment with limited resources, it would be even more difficult child bearing. I do not want to mention any names fearing I will definitely miss out someone. Job well done to the whole innovation team of mothers involved in this.

The baby has taken the first step to run as Carl Lewis!

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