D.Murali

Chennai: Ohio-based Beacon Group, Utah-based Westwords, Massachusetts-based Prepress, and Pennsylvania-based GGS Book Services. With four acquisitions completed in the last couple of years, what does Kapil Viswanathan, co-CEO of PreMedia Global, Chennai, have to say on the top integration issues that had kept him and his sister Kami Narayan, also a co-CEO, occupied?

“We have developed a blueprint for integration,” he said, during a recent email interaction with Business Line. “Key focus areas include organisational design, workflows, accounting and control systems, HR policies etc. We find that it works best when the integration is a collaborative process with inputs from key executives, and with feedback and guidance from customers,” added Kapil.

PreMedia Global, ‘a cross-border content services company with about 1000 employees spread across seven locations in the US and two at Chennai, India,’ has as its clients, publishers such as Pearson, McGraw-Hill, Houghton Mifflin/Harcourt and Thomson/Cengage.

Excerpts from the interview.

Can you tell us why you chose to enter the KPO space?

Before we started PreMedia, we researched various cross-border business opportunities. Our research and meetings with prospective customers pointed to a supply-gap in the content services space. Publishers were looking for a single vendor that would provide onshore, offshore and process automation capabilities, so that they would not have to work with different vendors. There were not many content-services providers that were able to provide the full set of services that publishers needed. So we decided to capitalise on that opportunity and build an organisation that would be a true one-stop shop for publishers.

An overview of your work, in simple terms, by way of a typical assignment description. Also, how much leeway is there for your creativity, since the client is a publisher who may in all probability specify the framework?

We write, design and produce content for school and college text books and scientific journals. We have editorial experts on our staff, who write text books for pre-KG through college levels. We also design entire book programs – including the look and feel, layout, art and photos. Finally, we produce this material – compose the pages, create the illustrations, and produce print-ready material in the formats that our customers need. We work with publishers on a wide range of subjects, from social studies to aeronautics, so there is a lot of variety in our work. There is much scope for creativity in several parts of the process, especially the development and design.

It is not often that someone successful in a big company as an employee decides to become an entrepreneur. How did the shift happen? And, looking back, do you think there are takeaways from your days as an employee that stand you in good stead now?

Kami and I have always wanted to do something entrepreneurial. But before taking the proverbial plunge, we felt it was necessary to build a solid foundation and get good work experience first. Although I worked at a large company, even there my role was quite entrepreneurial. I was involved in starting a business unit from scratch, and that involved making out a business plan, building a team, convincing the company to commit resources, going out and finding customers – pretty much the same skills that are required to start a business. I also learnt a lot about understanding different types of people, what makes them tick, how to motivate them, etc. These things have helped me a great deal, and I’m lucky to have had that exposure.

Again, it is not too common that a brother-and-sister team runs a company. Your views on the pluses.

Well, sometimes you do find siblings being forced to work with each other, because they are both involved in the family business. In our case, the situation is quite different. We CHOSE to partner with each other because our skill-sets and capabilities are complementary and we bring different things to the table. We complement each other very well and make a strong team. It’s really only coincidental that we are siblings. But the fact that she is my sister does make a difference, because there is a great level of trust.

Having established the company, from scratch to a point when the CAGR is around 30 per cent, do you think of continuing the entrepreneurial thread?

It is a big change to make, from running a young entrepreneurial company, to managing a larger corporation. We have grown from zero to nearly a thousand employees in just over two years. But we’ve just scraped the tip of the iceberg, and believe there is much more to come. As promoters of a fast-growing company, we need to adapt our management style to suit the needs of the company at various stages in its growth. Early on, we were quite hands-on, but now we delegate as needed. We focus on creating an environment that will bring out the best in our managers, and provide them with the tools they need to perform. We will continue to be an entrepreneurial company, moving quickly to respond to customer needs, seize opportunities, and develop new capabilities. That is in our DNA!

You have already made four acquisitions. What are the missing pieces in the business jigsaw that you are envisioning? And what is the strategy for the near term?

At the moment, we are well-placed in our market, and are looking to consolidate our position of leadership. With content increasingly shifting from print to online, we are seeing a lot of opportunity in electronic media services, such as online learning, assessment etc. We are developing this media services capability organically, and also keeping an eye and ear out for acquisition opportunities. For the next few months, we will stay focused on consolidating our position in the market, and work on integrating our recent acquisition to realise the best synergies.

How have been the valuations in recent times?

Our industry is dominated mostly by unlisted companies, so we don’t have a ready benchmark to study trends in valuations. But our experience is that there are more motivated sellers today than there were a few years ago, and this is largely a result of the wave of consolidation that is going on in our market. What has historically been a fragmented industry is now consolidating, and smaller vendors are starting to feel the pressure to either grow quickly or get acquired. This means that sellers’ expectations are more realistic and fairly-valued deals are more likely.

As a player predominantly in the US market, how have you coped with the dollar fall? Do you intend to work for the Europe and other non-US markets too?

As a hybrid vendor with both onshore and offshore operations, we have a natural hedge against currency fluctuations, because a portion of our costs are dollar-denominated. And while the falling dollar hurts our bottom line, it does make valuation of US-based acquisition targets more attractive in rupee terms. So what is bad for our income statement is good for our balance sheet! We are also gradually starting to find opportunities with publishers in Europe, Australia and even Singapore.

What has been the feedback for your products from the end users?

The feedback has been very encouraging. It is quite gratifying to hear an author or a scientist talk in glowing terms about a book or journal article that we worked on. There is always room for improvement, and we actively seek constructive feedback from our end-users and continuously develop better processes and workflows.

Considering the value that students and teachers derive from your work, do you think that the Indian education system also can benefit from the edge that KPO provides? What can be the challenges?

The movement towards web-based and other forms of electronic delivery of material is definitely something that students and teachers in India can benefit from because it opens up several new forms of teaching, learning and testing, and new pedagogical methods. The primary challenge is the lack of widespread availability of content from global publishers at acceptable prices in the Indian market.

How can the study materials given to college and professional course students be improved? (For example, CA course materials).

There is definitely a lot we can improve, in terms of the presentation of the content as well creation of ancillary material to help the learning process (tests, learning aids etc), and in the delivery of this material (web-based, CDs etc). These interactive tools are particularly effective in distance education where there is limited classroom interaction.

What are the skills that are the most in demand in your sphere of work? In India, and in the US? Where is competition coming from? Your approach towards staff motivation and attrition control.

In our US operations, we look for writers, editors and designers, as well as people with experience in project management with significant experience in the publishing business. In India, it is a more varied skill-set – we hire postgraduates in English and humanities for editorial and project management roles and graduates with experience in publishing software for production and related roles. We also look for technical developers and process engineers.

PreMedia’s work culture is differentiated from the competition and that helps us retain talent. There is transparency at all levels of decision making, and managers are accountable to their teams for their decisions. We encourage employees to voice their concerns and provide forums where they can do so without fear of reprisal. Our ability to retain people is also attributable to the fact that we offer multiple paths for career growth within the company, and provide multi-skilling opportunities for our staff.

On the value that your studies in Stanford and Harvard have added to your current work.

Well, going to Stanford or Harvard means different things to different people. Since I have had an entrepreneurial bent all along, I had focused on developing the skills I would need to succeed as an entrepreneur. But more than the actual technical skills that I picked up, it was the breadth of exposure that I got at Stanford and Harvard that really helped shape me. Classmates and professors from 20-30 different countries, with varied ambitions, varied interests. Exposure to different kinds of opportunities. It just really changed that way I look at things.

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Bio

Kapil has a master’s degree in industrial engineering from Stanford University and an MBA from Harvard Business School where he co-founded the Global Outsourcing Club. His prior experiences include a stint with Flextronics where he worked on productivity improvements on the shop floor in a factory in rural China. Earlier, Kapil led global sales for a business unit of Tata Consultancy Services.

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