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 FY 2007 was a year in which we started a process of significant change in our business portfolio, - in the breadth and scope of our operations and in the composition of our management team. All of this has been planned keeping in mind a long-felt need to strengthen our go-to-market and delivery processes, to diversify our business portfolio, and to capitalize on the significant opportunities that we see in the domain of engineering and PLM, in an increasingly globalized context.
As our results for FY 2007 show, we exceeded the guidance we had provided for the year. While this is good in itself, we have recognized that we need to gear up significantly to ensure sustained growth. In January we announced our 2010 plan and have already launched a number of initiatives toward its realization.
Our most significant step in FY 2007 was the acquisition of Modern Engineering. The acquisition has provided us access to deep domain expertise in the automotive and industrial machinery sectors, and a global delivery network comprising both nearshore and low cost locations in the US, Europe, India and China. The synergy between our native PLM competencies and the engineering process skills of Modern was the fundamental driver for the acquisition, and the market has started to respond favorably to the integrated value proposition of Global Engineering that we are now communicating through our new sales and marketing initiatives.
At the same time, there are a number of challenges we need to overcome to make this acquisition successful for Geometric. Increasing the global offshoring content in engineering is going to be the fundamental driver for achieving the profitability we are targeting in our consolidated business, and this is going to be the thrust of the integration process that we have started. We also need to rapidly diversify into other industry domains where broader engineering competencies can be leveraged, so as to minimize the risk of exposure to highly cyclical industries. We have made a change in the management team at Modern and are working closely together to ensure that the above imperatives are addressed. This process is going to take a couple of quarters before the effects start to be seen, but we are committed to ensuring that we meet these objectives.
The PLM business of Geometric has also started to undergo fundamental changes, aimed at improving top line and bottom line performance. In the past year we established a track record of successful delivery in increasingly complex projects to the end-users of PLM. This is going to be our primary target market, where we will communicate our value proposition of technology and process competencies across the entire product realization value chain. This will give us much needed visibility to meet end-user requirements which will in turn help in better resource planning. In our software product development work for the world’s leading PLM technology companies too, we started to take increasing ownership of product requirements and solution architecting. 3DPLM, our JV with Dassault Systèmes, continued delivering measurable value to our strategic partner and to us, and we are proud of the achievements of this team.
Executing larger fixed price projects that are managed by our delivery teams will allow us to manage our resource mix and leverage productivity measures to improve project profitability. To do all this effectively, our competency development framework and our global delivery processes and systems will need to be strengthened significantly. We have now implemented a new customer-centric organizational model across the company that will deliver improvements in all our operating processes and help us achieve this strengthening.
Going forward, we need to reinforce our ability to take existing and new competencies to new markets. Attacking a larger opportunity base through diversification is the only way we can achieve the growth trajectory we have set for ourselves. The acquisition of Modern was the first step, which now allows us to address the global engineering services opportunity. Our focus on end-user customers exposes us to an entirely new market segment. We are taking our combined offerings much beyond the automotive and industrial sectors and we now have track record of work delivered in the oil and gas, FMCG, aerospace and apparel segments. Our PLM competency set has started to expand beyond the traditional CAD and PDM arenas. We have introduced new practices for manufacturing intelligence and industrial.
Automation, which will allow us to attack the fast emerging area of PLM – manufacturing, integration and providing shop-floor system engineering services. Our products business has started to establish the differentiated value proposition we offer, through solutions for enterprise interoperability and productivity solutions for engineering and manufacturing processes. Our subsidiary in France in conjunction with our low cost center in Romania will allow us to offer a compelling local and near-shore proposition to our European customer base. We are expanding our delivery base in China. We have launched a strategic initiative to re-energize the Geometric brand and increase our visibility in our target markets. All of this, we believe, will create the opportunity base we need to grow.
The fundamental driver for all these changes in Geometric is our keen awareness that we now need to deliver what the market expects of us, and to make our company a strongly rewarding investment for those who have placed their faith in it. We have to alter our growth trajectory, to grasp the future and make it our own. And that is what we have now set out to do. As we prepare to take on the challenge, I would like to acknowledge the role played by the Board of the company and Mr. Manu Parpia in guiding the growth of the company since its inception, and recognize the trust that has now been reposed in me. The process of change and the manifestation of its results will take some time, but I have confidence in the fundamentals of our business and most importantly in the talent and commitment of our people across our global operations.
We will count on the continued support of our shareholders through this critical process of change. My management team and I will ensure that our effort to achieve our goals is an unflagging one. |
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Dr. Ravi Gopinath
CEO and Managing Director
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