A leading global brewery of Australian origin looks to reduce its packaging cost and bottle breakages. A few brainstorming sessions later, it approaches an Indian enterprise application solution company to crack the problem. The Indian company takes up the challange, studies the Australian company's processes and then suggests a package to resolve the problem. The Australian company implements the Indian company's solutions and, hey presto, finds that it is able to fulfil distributors demand, resulting in substantial cost savings.

On bottle breakage, the Indian company finds that since the beer major prefers to use new bottles in its bottling operations, the cost roll-up of bottle-breakage from the line is significant. Its think-tank suggests the introduction of an additional machine on the line, which reduces bottle-breakage to a mere fraction of the earlier levels. The Indian company also suggests putting in place an enterprise application to support primary sales to dealers, retailers and institutional purchases in the future.

The global major in that thumbnail study is Foster's the internationally renowned beer-maker, and the Indian enterprise application solutions company Thirdware, a company which within just six years of its inception has evolved into one of India's premier integrated solutions companies with an equally impressive track record overseas. A Rs. 15-crore powerhouse with leading blue-chip corporates as its clients, the Munibai-based Thirdware Solution Limited was promoted in 1995 by Pradeep Erinjery, then in his mid 20's, and four other partners.

Tracing the progress of the company which started as an implementation partner of QAD Inc. in India, a proud My. Erinjery says: "From small beginnings we have successfully grown into an IT powerhouse delivering integrated enterprise applications, that are affordable, scalable and manageable. Our integrated suite of enterprise applications is world-class and consists of solutions such as ERP, CRM, SCM, BI and B2B. Besides, we also offer an ASP model that caters to a wide spectrum of manufacturing and distribution companies."

Thirdware's ASP is a hosted service (by Satyam Infoway) and enables organisations of every size to contract for application management and ongoing maintenance. Elaborates Mr. Erinjery: "We invest in the expertise needed to take Tier 1 applications, fully integrate them for any business process, and manage them to the service level that a customer-requires."

This caters to typically small-to mid-size companies and business units within large companies and enables them to concentrate on building their business. Says Mr. Erinjery: "Thirdware's solution provides a single point of accountability that builds, implements, hosts and supports the entire solution. This ensures that if there are any problems, these are resolved in the shortest possible time."

Thirdware's growth has all the marks of a well-thought out strategy. Realising that to grow rapidly in a highly-competitive environment alliances with foreign majors were necessary, Thirdware entered into strategic alliances with companies such as QAD Inc., Hyperion Solutions Corporation (both of the US) ad Citrix Software India Ltd.

Explains Mr. Erinjery: "These alliances are a part of our growth strategy. They focus on product development and this, combined with our implementation skills, makes us a tough competitor in the marketplace. Besides, many of our clients are MNCs and they are expanding rapidly in the emerging markets. They take our products to these new markets too and in this way help us grow."

Thirdware is now planning to enter foreign markets in a big way. It has already set up two subsidiaries - one in the UK (Thirdware Solution Europe Ltd.) and the other in Singapore (Thirdware Solution Singapore Pte.). Two other subsidiaries will be set up shortly in Germany (Thirdware Solution Deutschland GmbH) and the US (Thirdware Solution Inc.) soon. Says Mr. Erinjery: "By setting up subsidiaries in important markets, we will be able to provide better services to our clients. It also helps in market development - being present in local environs makes a big difference."

The company's tie-up with Ford Motor Company will play a prominent role in this strategy. Ford has taken a 20 per cent stake in Thirdware, the first such investment by Fond in an IT company outside the US. Associated with the American major since 1995, Mr. Erinjery describes the tie-up as a "partnership with an endorsement of Thirdware's expertise in package software implementation with and emphasis on project management and commitment to project schedules. We are more like the IT division of Ford."

Thirdware's relationship with Ford began when the former implemented its solutions in the American company's plant in India. Realising that the applications used in America were not applicable in emerging markets, Ford asked Thirdware to implement its MFG/PRO package in India. It was a success and soon Ford used Thirdware's expertise in other markets such as China, Singapore, the Philippines and Vietnam.

The tie-up, with Ford will help Thirdware expand into more markets. Points out Mr. Eriniery: "We are the preferred application implementation partner for Ford Motor Company and, apart from Asia-Pacific where we have been implementing to date, Ford has identified projects in Europe and the US which will be implemented by Thirdware."

Ford has major plans in the e-business segment, slowly transforming itself into a consumer-oriented company from the purely manufacturing entity that it is at present, Given Ford's plans to connect to dealers, suppliers and consumers, Thirdware will play a major role in implementing its solutions for the automobile major, which in the future will become a major revenue stream for the lndian company.

Besides Ford and Foster's, Thirdware has worked with Godrej Soaps Limited, Bell Ceramics and Dabur, among others, helping them become more cost-efficient in the process. Thirdware has traversed the high-growth path successfully so far. The future looks bright as well, with Mr. Erinjery charting his plans immaculately. The global IT meltdown has not affected the Indian company as much as it has affected its peers. It has an employee base of 143 presently and as Mr. Erinjery proudly points out: "The very fact that we are hiring when others are cutting back shows that we are firmly entrenched on the fast-growth track."

Thirdware has captured niche markets in the domestic markets while its focus on exports and overseas operations should earn it significant revenues in the coming years. With the need for solutions implementation increasing tremendously, Thirdware has substantial scope for growth. "If we continue as we are doing, we will easily achieve a turnover of Rs. 100 crore by 2004-05," says Mr. Erinjery. In this exclusive interview With BUSINESS BARONS, Mr. Erinjery explains the nature of Thirdware's business and elaborates on his future plans. Excerpts:

Could you give a brief background of Thirdware Solution Ltd.?

PRADEEP ERINJERY: The idea to set up my own company entered my mind in the early 1990s when I was working with Digital Equipment, handling a number of ERP projects for HLL. At that time, the ERP segment was poised for significant growth and I detected immense potential for consulting services.
I first started off as an independent consultant to the US-based QAD lnc. one of the world's leading suppliers of global supply chain management solutions. Having spent time on assignments in Hong Kong. South Korea, China, Thailand, Philippines. Malaysia and Indonesia, I confirmed the demand for quality services and hence, along with four other colleagues, decided to set up our own company. This is how the idea of Thirdware Solution Ltd. came up.
The company started operations in 1995 with several projects including those for Nicholas Piramal and Ford India. The initial investment in the venture was not much as we are in the service business and the equity is held by all five partners. The paid-up capital presently is Rs.5 crore.

What are Thirdware's core business activities?

ERINJERY: We began our business as a consulting firm implementing ERP solutions, then became the distributor for QAD Inc. in India adding the sales and support dimensions to our business. Our core strengths are in executing projects on schedule, which involve sound project management, good business understanding of the industries we work in and superior technical skills. Over the years we have evolved into a company providing integrated enterprise applications that are cost-effective, scalable and manageable.
We are also in application service provider (ASP) offering model catering to a wide spectrum of manufacturing and distribution companies. Our model is such that corporates of every size can contract it for application management and ongoing maintenance.

What was Thirdware's turnover and PAT in FY 01 and what are your projections for FY 02?

ERINJERY: Our turnover in FY 01 was Rs. 15 crore and our net profit was Rs. 4 crore. We have been growing steadily since our inception and I am encouraged by our performance. For FY 02, expect a 60 per cent increase in our turnover to around Rs. 24 crore and a 30 per cent increase in our PAT.

How has the company fared in the last three years? Will you be able to achieve high growth rates over the next three years?

ERINJERY: The last three years saw Thirdware achieve astounding growth rates. However, I must point out that during this period we were working on a small base; hence, achieving high growth was comparatively easy. When one is working on low volumes, it is easy to even double growth.
Presently, the industry is growing at around 40-50 per cent per annum and Thirdware will keep up with this trend. Our systems at in place and we have built up a strong base from which to expand rapidly. I foresee good times ahead for Thirdware.

One of your goals is to increase your exports. How do you propose to do this?

ERINJERY: Many software companies now are solely into export whereas Thirdware has a strong domestic focus as well. Our domestic business has turned out to he very profitable and we don't want to dilute our domestic focus. But at the same time one must recognise that the international market is very large and to prosper in an increasingly competitive environment, one must concentrate on the global markets too. Presently, about 15-20 per cent, of our revenues accrue from exports; we want to increase this to 50 per cent in the next three years.
Our domain knowledge is excellent we have several blue-chip companies as our customers and these companies take our skills abroad. One way of increasing our exports arises when these current customers take our products and services to international markets - this will be one important growth avenue.
Secondly, we have a solid skill base, which enables us to compete directly with our peers in international markets. In the Asia-Pacific region, especially, we are already proving a formidable competitor to global majors. Thirdly, many of our clients who comprise blue chips and MNCs will serve as our references abroad. Thus, a combination of factors such as our solid domain knowledge, our strategy to stick to certain vertical industries and our referenceability will enable its to increase our exports substantially in the coming years.

Could you provide information about Thirdware's tie-up with QAD Inc. to provide the ERP solution MFG/PRO?

ERINJERY: QAD Inc. is a California-based company which authors MFG/PRO, an ERP package and a global supply chain management solution. Thirdware is the sole distributor in India. We implement the solution and also support QAD's customers in India.

Could you tell us about the nature of Thirdware's tie-ups with Citrix and Satyam Infoway Limited?

ERINJERY: Citrix is a server-centric computing product and helps companies run applications on a central server. When working on an ASP model it provides administrative support.
Our tie-up with Satyam involves Satyam hosting our server - in other words, they provide infrastructural facilities to our ASP model. Salyam provides network connectivity via Satyam VPN (virtual private network) at over 40 locations in India to our customers.

Thirdware claims to specialise in providing services to 'Industry verticals'. What do you mean by this?

ERINJERY: Thirdware specialises in industry verticals like the consumer packaged foods, automotive, food and beverage, electronic/industrial product and medical devices sectors. Here, the point to be borne in mind is that solutions that would work in the F&B industry are by nature different from those that would work in the refinery or automotive sectors. Our solutions addrss the specific requirements of these sectors. The knowledge gained from implementing solutions in one vertical helps us implement solutions faster for each subsequent customer. This domain knowledge is needed to differentiate one solution provider from the other. In addition, the functionality that we add to our products are always in sync with the requirements of that particular industry.
Some of our leading customers are HLL, Godrej Soaps Ltd., GE Lighting India Ltd., Tata Liebert and Ford Motor Company.

Thirdware has recently entered into a strategic tie-up with Ford Motor Company. What does this tie-up entail?

ERINJERY: We have been working with Ford starting in India since 1995. India was one of the first emerging markets that Ford commenced operations in.
What happened is that Ford's management realised that not all applications used in America and other developed markets were applicable in India and other smaller markets. They therefore started looking for a package that would address their needs in emerging markets. They zeroed in on MFG/PRO, which we market and support in several emerging markets.
They were happy with our ability to deliver and recognised the fact that we had domain knowledge. We also understood the Ford processes and completed projects at a rnuch faster pace. Hence, they used our expertise to implement their plans in all the emerging markets such as China, Korea, Thailand, the Philippines, Malaysia and Vietnam.

Thirdware also has a tie-up with Hyperion Solutions Corpn. of the US? What does this tie-up entail?

ERINJERY: This is another of our recent tie-ups and the alliance makes Thirdware a premier business partner of Hyperion in India. Hyperion is a $ 500 million US company. It is the worldwide leader in business analytic solutions and works with the top Fortune 100 companies.
Hyperion's product is a business intelligence tool which helps corporates in analysing information. Today, nearly 70 per cent of Fortune 500 companies use Hyperion's financial consolidation application. The timing of this tie-up is important as India's market regulator SEBI now requires accounting to he done in a specifically defined manner. It will also help Indian companies comply with US GAAP (Generally Accepted Accounting Practices).

Are you contemplating more such tie-ups?

ERINJERY: We are looking at more tie-ups and are in discussions with a few companies. I expect a few tie-ups to fructify within the next two-three months.

Do you have plans to set up subsidiaries overseas?

ERINJERY: We have already set up two subsidiaries in the UK and Singapore, called Thirdware Solution Europe Ltd. and Thirdware Solution Singapore Pte. respectively. We are in the process of setting up two more, in Germany and the US, called Thirdware Solution Deutschland GmbH and Thirdware Solution Inc. respectively These are all 100 per cent-owned subsidiaries.
Our subsidiaries will operate in the area of implementing and supporting applications. Our core skill lies in implementing packages and we will stick to it.

Finally, where do you see Thirdware in the next five years?

ERINJERY: I am confident that we will continue to grow rapidly and increase our turnover and profits. Our mission is to ensure that we partner our customers in their success. Most of our clients continue to work with us, which is an endorsement of our capability to deliver the goods. We stick to schedules and the quality of our work is of the best class.
There is a huge market internationally for solutions implementation and Thirdware is ideally placed to tap it. We will grow our business and market presence, both independently and through alliances. In international markets, alliances are very necessary and those we have struck so far have served us very well If we continue to perform as we have - and I am confident we will - Thirdware should be a Rs. 100-crore company by 2004-05.