While concluding my communication to you last year, I had mentioned about the commencement of Intellect 2.0 – the next three-year phase in our journey. We had defined three goals for ourselves during this phase
Internally, we termed FY18–19 as Intellect 2.1, the first year of this phase. I am delighted to report that the results of this year reflect realisation of the above goals with definite pointers to scaling greater milestones in the days ahead. Some of the key dimensions of our performance are shared below.
iGTB – The Global Transaction Business – one of the four business units achieved revenue of Rs. 678 Cr in FY19 – greater than the revenue of Intellect as a whole in FY15.
Revenue of Rs. 1,459 Cr represents 36% growth over the previous year and 25% Compounded Annual Growth Rate (CAGR) between FY15 and FY19 – a 2.4× growth over 4 years.
License Revenue grew 4X between FY15 and FY19 – from Rs. 86 Cr to Rs. 345 Cr – 41% CAGRduring this period. Per Deal Average License Revenue also moved up 4X from Rs. 1.5 Cr to over Rs. 6 Cr during this period.
By deeper engagement in their Digital Transformation agenda, our average revenue with ourtop 20 customers grew from Rs. 18 Cr in FY15 to around Rs. 42 Cr in FY19.
65% of our revenues are from the Advanced Financial Markets of Americas, Europe, Japan, Australiaand Singapore – an assertion of acceptance of our products by financial institutions in these markets.
85% of our revenues are from existing customers – testimony of their confidence in us.
In 24 countries across the globe – 9 of which are from Advanced Markets and 15 from Growth Markets – one of the top 3 financial institutions of that market is our customer.
We have equally focussed on profitability as well, while driving the growth agenda. A calibrated and carefully chosen investment plan in Product Development and Sales and Marketing, while never compromising on Technology Investments has ensured that our bottom line is secured while supporting the growth requirements.
We have consistently delivered nearly 50% margins every quarter.
Our Earnings before Interest, Depreciation and Tax – EBIDTA– has more than doubled over FY18 to148.50 Cr in FY19 and is now over 10% of revenues. Our Profits After Tax also nearly tripled over a year ago to Rs. 131 Cr.
SG and A costs are now 31% of revenues from 35% last year and 44% in 2016-17. Product engineering and research costs are now 14% of revenues as against 18% last year.
While the above metrics present highlights of past performance, here are some pointers for sustainability of this performance.
We commenced FY20 with a strong order backlog of over Rs. 1,830 Cr.
We are in the reckoning in 35+ high value deals, each of over Rs. 20 Cr in value.
The above data points paint an outside view of Intellect – as is visible to the Investors and Market. I wish to briefly touch upon the ‘Inside Story’ – how a structured and calibrated investment in IP led to the above results.
The raison d'être of Intellect’s existence is to reduce the immense complexity of banks and other financial institutions, whom we serve. Intellect has segmented this complexity into five dimensions.
Complexity of disparate architectures
Complexity of data management and integration across platforms
Complexity of innovation and multitude of products
Complexity of changing security, regulation and compliance
Complexity of multiple generations of technology.
Each, by itself, is an unwieldy beast.
Using Contextual and Digital Technologies, we not only reduce these complexities, but also enable banks and financial organisations to convert their challenges into opportunities.
We have been unravelling this complexity and providing holistic technological solutions by leveraging our investment in Design Thinking. Intellect believes in the three cardinal Laws of Design Thinking that have conclusively provided tangible outcomes of reduced Complexity, Comprehensiveness of solutions, managing Continuous Change and reducing Cost
Sharply focused solutions with deep expertise that address specific pain points of our customers take priority over providing more and more functionalities.
All products that a customer has to choose from will meet 98% of his or her needs and expectations. Bridging the last 2% makes all the difference and this very differentiator will yield 200% results.
Our focus will first be on the 1000 gm – high impact items – that most benefit the customer, followed by 100 gm – medium impact and lastly 10 gm – low impact items.
The application of Design Thinking, as a first step, led to observation of patterns and development of two frameworks that attack the complexity and ensure completeness of our solutions.
The first one is our Knowledge Framework–the L0–a tool to catalogue and deep dive into our customer’s business architecture in a structured manner. While L0 denotes the landscape of the business vertical, L1 is connected to specific products of the customer. The L2 level addresses individual user journeys within the scope of a product and L3 describes the processes within that user journey. Thus, the journey progresses from Breadth to Depth – Expanse to Detail – as wetransit across levels.
The other framework is COPARIS, an acronym for the seven dimensions that we identified tobenchmark any solution architecture – Customer experience, Operational efficiency, Performance, Analytics, Integration, Risk and Security – an outcome of rigorous study and research of best-in-classpatterns and anti-patterns in the solutions that were proposed to address the complexities in our customer’s ecosystem across geographies and business life cycle stages . This has now become the de-facto benchmark to validate our products and solutions.
Another significant insight that emerged from years of experience in supporting our customer ecosystems was that raw coding was the key source of defects. Therefore, as the next step to create robust and agile products that could be implemented in an industrialised manner, we created a set ofsix low coding technologies:
Digital Canvas – For rapid design of User Experience Layer and Analytics in our products, empowers the end user to engineer solution through an intuitive design studio.
Complexity of data management and integration across platforms.
Digital Hub – For design of business logic and workflows for our customers, definition of business rules, workflow routing, and decision matrix. Product configuration are eased configuration screens rather than by coding.
Intellect Big Data - A platform to integrate structured and unstructured data. It aggregates data from multiple internal and external sources including the Web and Social Media to provide insights, alerts, and updates for decisioning, and rule-based routing of transactions
Purple Fabric – A platform for Artificial Intelligence Machine Learning. It aggregates data, validates them for choosing the most reliable source, triaging and presenting a set of data fields, which when fed to an algorithm, gives decisions on use cases such as Credit Decision, Insurance Underwriting, and Customer Onboarding.
Olive Fabric – A platform for integrating our products with other products and solutions in the customer’s landscape by providing capabilities for data exchange with options for data conversion, validation, and rule-based processing.
ARX – For integrated Security & Entitlements Management. This platform has ensured zero security breaches and incidences in Intellect installations apart from enabling complex user or role-based permissions.
These platforms facilitate and enable building robust and defect-free products, replacing coding with configuration, thus laying the foundation for our suite of Contextual, API-led products that are powered by Artificial Intelligence and Machine Learning.
These products spearhead business outcomes for our clients, delivering 20% reduction in costs and 20% increased business generation. Just as a data point, over 70 of our 240 customers have logged in less than 10 defects in the last six months. This is testimony of the stability and robustness of our products.
We next addressed effective implementation of these products for our customers. Our delivery process is now almost algorithmic, powered by the Delivery Excellence Framework. This comprehensive framework is an exhaustive set of seamless processes that include joint Product Walkthroughs with our customers, Test Walk-throughs, Customer User Journey and Model Bank based implementation. In FY19, we went live in 50 new customer installations, 18 of which are large transformation initiatives. IDC – Intellect Digital Core, our flagship Core Banking product from iGCB and Exponent / Risk Analyst – products from our insurance business – have also successfully been deployed on the Cloud.
Products apart, the above frameworks, platforms and the Design Thinking led approach are our differentiators that set us apart from competition to be our customer’s first port of call.
As a testimony to the above efforts, your company’s products continue to figure consistently in the top slots in various analyst reports. Four of the twelve products are ranked amongst the top 2 in their respective categories. The prestigious iGTB Oxford School of Transaction Banking is now a signature event attracting the who’s who of Corporate Banking from the worldover. The leadership team of our Insurance Business, Intellect SEEC, is repeatedly invited to address Thought Leadership sessions in the advanced markets of the US and Europe.
The results presented earlier are a testimony to the success of Intellect 2.0 agenda – of industrialising our products and processes and accelerating monetisation of our products for higher license realisation, larger deals and greater wallet share with our customers. I look forward to sharing further stories of success with you as we progress into Intellect 2.2 –the second year of Intellect 2.0. We certainly will emerge as a Global Products Company from India. I thank you for your confidence in us and being part of our journey. I can promise that it will be increasingly exciting and rewarding.
