Krishnan Venkatachary, CFO, Cigniti Technologies

“We have been growing over the last four years at an average rate of 58%. We anticipate organically to grow at about 50 % yoy over the next two years.”

May 10, 2016 9:46 IST | IIFL
Krishnan Venkatachary, CFO, Cigniti Technologies
Krishnan Venkatachary, CFO, Cigniti Technologies, has over 25 years of experience spanning global financial operations with strategic, operational leadership experience across IT & ITES, Pharma & Healthcare and FMCG & Allied sectors. He is a qualified ACA, ACS and FCMA. Krishnan’s core competencies include Strategic Financial Planning, Finance & Accounts, Auditing & Taxation, Secretarial Operations, and Management of Legal Issues, etc. Prior to joining Cigniti, he was the Chief Financial Officer for Yashoda Hospitals, Hyderabad. He earlier worked with IT organizations like Visualsoft Technologies, and Baan Info Systems. Krishnan is known for his energetic & innovative leadership across Financial Management, Operations, Secretarial and Legal functions.
Cigniti Technologies Limited, is headquartered at Hyderabad, India. Cigniti’s 2200+ career testers are spread across US, UK, India, Australia, and Canada. Cigniti is the world’s first Independent Software Testing Services Company to be appraised at CMMI-SVC v1.3, Maturity Level 5, and is also ISO 9001:2008 & ISO 27001:2013 certified. Cigniti’s test offerings include Quality Engineering, Advisory & Transformation, Next Generation Testing, and Core Testing. Over the last decade, Cigniti has helped Enterprises and ISVs build quality software while improving time-to-market and reducing cost of quality. Cigniti has translated its R&D into SMART Tools™ that accelerate testing and help improve the quality of services delivered to clients. Cigniti has India's first of its kind Robotics Test Lab, a Mobile Cloud Test Lab with HP & Experitest, a Cloud-enabled Performance Test Lab, and an IoT & Smart Meter Lab.
Replying to Anil Mascarenhas of India Infoline, Krishnan Venkatachary says, “We have been growing over the last four years at an average rate of 58%. We anticipate organically to grow at about 50 % yoy over the next two years.”
From setting up a generic IT Services Company to a software testing Services Company, walk us through how things have changed over the years in the IT space as far as your company is concerned.
Cigniti Technologies was founded in 1998 by Mr. Subramanyam Chakkilam, under the name of Chakkilam Infotech in 1998, initially as an IT services company focusing on custom application development and maintenance. In 2001, it built HIPAA compliant software products for the US healthcare industry. Our MD, Mr. Subramanyam successfully took the company public in 2004 and listed it on the Bombay Stock Exchange. In 2008, he was joined by Srikanth Chakkilam, Executive Director who returned from US who was instrumental in putting together a world class executive management team and successfully repositioned the company as an Independent Software Testing services company. In 2011, Chakkilam Infotech acquired a U.S. testing consultancy, Cigniti Inc and renamed the company to Cigniti Technologies Ltd. In mid-2013, Cigniti Technologies made another U.S. centric acquisition with the purchase of Gallop Solutions Inc, specialist in QA & Testing Services that had built successful IPs around HP QC Migration. With an objective to build better world with better software, Cigniti has grown to become the global leader in Independent Software Testing Services Company within few years. Now, it aims to become the world’s largest and most respected independent testing services company.
Brief us on your test offerings. What is the revenue mix between Core Testing and others?
Cigniti is an independent Software Testing Services Company and we get the revenue through the Company’s 18 test offerings. Cigniti Technologies has realigned its services portfolio into four categories:
  1. Quality Engineering Services: Software testing has moved beyond the traditional quality assurance practice to a more comprehensive quality engineering framework. Organizations, nowadays, are much inclined towards DevOps and continuous testing to enable effective software development and operations while offering superior quality and user experience. Realizing the gaining traction towards robust quality assurance, Cigniti offers QE services including Agile Testing, DevOps QA, Service Virtualization and Test Data Management services.
  2. Next generation services: Next generation services are recent and emerging offerings in the software testing arena that are in huge demand. Cigniti has been heavily investing in next generation services that help its clients’ overcome their current business challenges.
  3. Mobile application testing, IoT, digital QA, big data& Analytics testing, ecommerce testing, medical device testing, and game testing fall under next generation services.
  4. Core testing services: includes functional testing, test automation, performance testing, security testing, ERP testing, regression testing, compatibility testing, and globalization testing. Cigniti has been investing in latest tools & technologies to offer these core testing services efficiently and best deal with the current software testing challenges of various industries.
Advisory & Transformation Services: Cigniti’s Test Advisory Services (TAS) cover rapid 3-4 weeks assessment projects to define the test maturity and transformation roadmap & Test Transformation Services (TTS)comprise longer 6-12months+ projects to help the client move up in the maturity & transformation roadmap to bring in long term business benefits and achieve competitive advantage..  These help clients attain a higher level of Process Maturity by aligning cutting-edge Software Testing capabilities with client’s business logic that strengthens testing practices. Focused on process improvement, optimization, and improved utilization, TAS ensures customized Quality control systems for better outcomes. TTS helps organizations in deploying the best of reusable process components and tools to meet the business objectives. Cigniti leverages industry practices and indigenously developed baselines for arriving at a best possible solution for a given business scenario.
Tell us more about your Robotics Test Lab.
Cigniti has developed a Robotics Lab to showcase the thought leadership and End-to-End Testing Solution for Hardware, Software and Firmware Testing in the Embedded Systems & IoT domain.
The Lab was developed in collaboration with a Client who is industry’s leading provider of educational toys for children to enhance creativity through playing and learning. The Robotics lab was built with 15 test machines having various types of operating systems to support interoperability (Hardware, Software and Firmware) Testing. We have implemented structured approach of validating prototypes, partial build with the hardware and testing E2E product functionality.
What are your offerings in the Cloud space?
Our state-of-the-art tool and technology agnostic test labs offers on-demand access for key services such as core testing, test automation, performance testing, mobile testing and security testing. All these labs & services are offered to clients by leveraging the cloud.
Test Cloud - On demand test infrastructure for mobile, performance & automation available in Pay-As-You-Go service options that helps clients in reducing CAPEX. It also offers Mobile Device cloud with on-demand global access to “real” devices and access to diverse operating systems, browsers, devices & hardware. The Test Cloud is powered by partnerships with leading providers ensuring security and privacy.
You had also cited Test Automation as one of the trends for the year besides testing in Agile & DevOps Environments. Tell us more about this.
We believe Test Automation is really key to the success of Agile & DevOps and we are making significant investments in building IPs and partnerships that will help us automate testing and help client succeed in their agile transformation journey. Cigniti, the largest of all India-based testing pure plays, has been enhancing its service portfolio and building IP. Our core competency lies in our IP led testing. Cigniti is further investing in automation (through its own IPs and accelerators) and in service industrialization, as well as in its service portfolio, to deepen its capabilities in a structured manner. Cigniti’s proprietary SMART Tools ™ and Predict Quality Methodology ™ are its core strength. They enhance productivity and reap the benefits of QA early in the software life cycle for our clients. Our IP led testing tools analyze business needs well, automate test efforts and accelerate test life cycle. Cigniti has deep expertise and proprietary frameworks to accelerate testing for improved time to market for its clients.
Gallop, a 100% subsidiary of Cigniti, along with its strategic partner HP, has developed and launched ‘IP-QuickLean’, the world’s first automated solution for migrating HP UFT test assets into HP’s LeanFT. A significant innovation from future business standpoint, QuickLean reflects our pursuit of bettering the world of software testing and the spirit of co-creation with our strategic partners. Gallop has two other IPs:

WinQuick       - a HP WinRunner to QTP migration service
RoboQuick     - an IBM Rational Robot to HP QTP migration tool that converts scripts, libraries and run-time linkers
Both the tools are for automating the migration of previous HP and IBM testing software products to the latest update of HP QTP. These IPs are now part of Cigniti Smart Tools. Both WinQuick & RoboQuick are sold as part of the service and not as separate licenses.
Which are the verticals that you cater to?
Cigniti currently caters to 48 verticals which fall broadly under BFSI, Communications, Airlines, Cruise lines, Retail & Consumer Goods, Healthcare, Hospitality, Media & Entertainment, Information Services, Energy & Utilities, Manufacturing, Technology, Logistics, Government and Education industries.
Wearable and IoT testing are also being spoken about. Are you into this space?
IoT is the most talked about these days and would revolutionise the industries. Cigniti is serving few clients in this space and had set-up an IoT and Smart meter lab at Hyderabad to be future ready.
What are your margins? Do you see them improving in the current year?
Our current EBIDTA margin hovers around 15 %. The PAT is around 8.5 %. Over the next two financial years we anticipate the EBIDTA margin to move to around 20 % to 21% and consequentially the net margin to about 11 % to 12 %.

We have been growing over the last four years at an average rate of 58 %. We anticipate organically to grow at about 50 % YOY over the next two years.

You acquired Gallop Solutions Inc a couple of years ago. How has that part of the business done?
Yes it has grown very well. The current run rate approximately is about $ 24 million.
Which are the geographies you are present in? What is your marketing approach outside India?
We have served over 300 clients (including Fortune 500 & Global 2000 Companies) with the current active list of 192 clients, which includes 45 Global 2000 companies, across USA, Canada, UK & Europe, ANZ, South Africa, India, South East Asia and Middle East Asia from the Company’s offices established at US, Canada, India, London, Australia and South Africa.
Cigniti is the third largest independent specialised software testing company in the world. Cigniti Marketing team is working continuously with a mission to “Make Cigniti as the most recalled, respected and technically superior Testing Services Company”. The entire team works with dual objective of “Building Brand Awareness” and “Impact Business through demand generation activities and sales enablement”. To achieve this we rely up on Analyst Relations, Thought Leadership, Awards & Recognition, Employer Branding, Investor Relations, Partner Relations, Public Relations, Geo & Field Marketing, Events, Digital Media and Content Marketing.
We aim to position Cigniti as the global market leader in Software Testing and win customers and retain them for long-term by offering them competitive edge.
What gaps would you look at filling in through an inorganic growth?
We would like to expand in the European region especially with focus on BFSI segment.

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