1. Mindtree’s digital practice, expertise to drive growth

Mindtree’s digital practice, expertise to drive growth

Mindtree has built up an impressive digital practice over the past few years. Digital business is scaling up nicely with wins of large integrated digital transformational programs.

By: | Published: July 11, 2017 5:11 AM
mindtree, mindtree digital practice, mindtree market, mindtree growth Mindtree has prioritised the following to sustain growth from digital practice – refining of ‘sell by play’. (Reuters)

Mindtree has built up an impressive digital practice over the past few years. Digital business is scaling up nicely with wins of large integrated digital transformational programs. To drive profitability and focus, the company has picked up a few interesting bets. Digital will continue outpacing corporate growth rate. Our recommendation and target price are suspended as our associate company is manager to Mindtree’s buyback offer.

Mindtree’s digital practice focuses around four key themes – creating digital customer experience with focus on areas such as digital marketing, ecommerce, mobility programs, etc., digitising the value chain by API-led approach, developing ‘sense and response’ systems with particular emphasis to generate set of live actions for business using data-driven models and analytics and shaping innovative business models.

Mindtree’s deep-rooted product engineering expertise, well-established ecosystem including multi-dimensional experts, partnership with ecosystems and breadth of capabilities combined with its collaborative approach and investments in industry-specific IPs and platforms, position it well for growth.

Mindtree has prioritised the following to sustain growth from digital practice – refining of ‘sell by play’.

The basic objective is to focus on sales of specific capabilities with content that is targeted at specific buyers. The conversation typically starts at umbrella level first. It gets specific depending on clients problems that need to be addressed, focus on existing accounts and embedding digital specialists in every account, grow platform play.

Focus on a few areas with scale approach. Some of the areas that the company has strong presence are Salesforce, Azure, Adobe and Sitecore and delivery excellence with focus on automation and DevOps backed by own platforms. Noting the diverse nature of skills required to execute digital programs and small project sizes, growing digital business with high profitability is a challenge, per Mindtree. Focus on a few chosen areas can build scale and improve utilization rates, something which Mindtree has managed over the past few quarters.

To illustrate this point further, while Mindtree’s digital practice comprises 5,600 employees with 100+ skillsets and revenues of over $400 million, nearly $80-90 million accrues from customer experience practice alone. In addition, Mindtree is focusing on areas that lead itself to annuity spend. For example, spends in campaign and marketing operations are recurring in nature and can provide continuous revenue streams.

This work is traditionally done by agencies. Mindtree is attempting to capture these spends to bring in annuity and improve predictability of revenues.

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