Virtusa Corporation: Millennial Enabling Business to be Successful in the Digital Age

Sagaya Christuraj
Monday, October 6, 2014
Sagaya Christuraj
Just as Generation Y is rapidly becoming a significant population of the global consumer base, businesses are leaving no stone unturned in understanding the new expectations of the Millennials, a generation of consumers that were born digital natives and expect to consume products and services predominantly through digital devices. Just look around you and you will quickly realize that every enterprise servicing consumers has a significant opportunity as a result of the inextricable link between digitally savvy consumers and the proliferation of digital devices in their possession. While many established businesses are still struggling to come to grips with changing market dynamics, be it newer and more challenging consumer expectations, or emerging technology that can be used to disrupt business models, Kris Canekeratne, one of the founders and the Chairman and CEO of Virtusa Corporation (NASDAQ: VRTU), a leading business consulting and IT outsourcing provider, has an elegant smile on his face as he sits in his New York City office excited about the opportunities ahead. The combination of an increasing percentage of digitally savvy consumers and advances in technology are enabling progressive enterprises and upstarts to disrupt status quo and introduce new products and services. Having provided business consulting and IT outsourcing services at the intersection of large enterprises and their customers, the Virtusa team foresaw this paradigm shift years ago and has diligently built an industry leading competency to help clients deliver a distinctive Millennial experience.

This shows in their earnings too. One of the fastest growing public companies in the global IT outsourcing industry, Virtusa's revenue for the first quarter of fiscal 2015 was $112.3 million, an increase of 24 percent year-over-year. Additionally, Virtusa has won numerous recognition from analysts and industry organizations including, ISG's Global Top 20 list of Outsourcing Service Providers, InformationWeek 500 list of Top Technology Innovators, and Forbes's 100 Best Public Companies In America with revenue less than $1billion. Through its cutting-edge, innovative approach to providing millennial solutions and services, Virtusa has attracted many of the top global businesses in large consumer facing industries. These industries are going through significant transformation driven by the rapidly increasing number of digital savvy consumers and employees and technology trends such as cloud, mobility, social networking and big data driving increased demand for a partner who understands how to develop and deliver digital solutions that connect with digitally savvy consumers and employees. Virtusa has a marquee set of clients including AIG Global Services, JPMorgan Chase Bank, N.A. (JPMC), British Telecommunications plc (BT), to name a few. All this is testament to the fact that the company has produced the right mix of solutions and services to address current and future market needs.

The Impact of the Millennials Consumer
We are at the cusp of a fundamental change in the market environment and the forces that drive business success. While the millennial generation is a catalyst, earlier generations have also adopted the "millennial mindset," rapidly changing the dynamics of how consumers interact with service providers. At the same time, rapid advances in several disruptive technologies like Mobile, Social, Gamification, Big Data Analytics and Cloud, are enabling corporations to innovate and introduce new products and services at an unprecedented pace. Enterprises that do not leverage these technologies face a serious risk of losing market share or even becoming obsolete, creating competitive threats for some of today's best known brands.

Moreover, in a connected world, competition can emerge from the most unexpected places. The need for enterprises to accelerate innovation and introduce their products and services faster has never been greater. Corporations that embrace this paradigm shift have tremendous growth opportunities, while those that are slow to adopt can rapidly fall behind. Given this context, corporations are not only initiating large transformational programs to run their business as usual (BAU) activities efficiently, but are also focusing on innovating their business processes to deliver a Millennial experience to their customers. They are looking for strategic partners who can not only help them in this but can also make them agile to respond to competitive market environments. "We are well positioned on the customer experience side, helping our clients deliver a distinctive Millennial experience to their consumers, and in supporting today's CXOs drive cost reduction through business transformation, to fund investments in business growth," says Virtusa's President, Raj Rajgopal. Virtusa has come up with very creative cost take out models that leverage its technology heritage and use its engineering mindset. It has developed a toolset that increases the productivity of software engineering teams, while shrinking the cost of testing, support and maintenance of IT application platforms. The firm has invested significantly in developing software. engineering frameworks that are unique and differentiated, which deliver 25-40 percent more productivity or help take out the cost from application support and maintenance, and software quality assurance (SQA). In short, Canekeratne says, "On the one hand, we are enabling our clients expand their addressable market by delivering a distinctive Millennial experience and, on the other hand, we optimize operating costs and reduce business risk for our clients through a set of industry leading transformational solutions."

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