Congruent Solutions was recently recognised as one of the four Chennai-based companies which can evolve as a ‘Billion Dollar Baby’ in the future by TiECON Chennai. TiE Chennai, a part of The Indus Entrepreneurs, is a global not-for-profit organisation that nurtures entrepreneurs.
The objective of this programme was to showcase organisations that have started from scratch and have the potential to turn into a billion-dollar business with a global presence.
There were about 350-plus companies who were recommended and identified by a few city-based investment bankers as the likely ones to hit a billion dollars of revenue or valuation in the next five years. It came as a surprise to even TiE Chennai programme committee that there were so many city-based companies jostling for this award.
Congruent Solutions is a 30-year-old company which has reinvented itself many times over. Says Balaraman Jayaraman, co-founder & president, “About four years ago, we decided to deviate from our focus on services to put money in developing an enterprise class product. In the West, there are pension providers and retirement plan providers. Defined benefits (the pre-determined amount one gets whatever the employer contributes) were becoming unviable as people were living much longer. Pension companies and funds the world over recognised that they have to make the transition to defined contributions.”
Jayaraman says that this change worked for his company. Congruent Solutions was established in 1986 as Congruent Software Private Ltd by Chennai-based Sargam Metals Group. In its initial years, Congruent was primarily catering to the in-house computing needs of the group. In the early 1990s, Congruent started tapping into the domestic bespoke development market and managed to get a number of leading clients in the south. It did several interesting projects such as developing a MRP application for the textile industry and implementing it in a few mills in Tamil Nadu. For MK Electric, Congruent developed a custom ERP solution from scratch and the entire operations of the company were on that platform for a good 12 years before they migrated to Baan, as part of their worldwide corporate direction.
“We also worked with CitiBank in Singapore to create an interactive testing and assessment application, using a multimedia UI service layer, deployed in 16 countries and four different languages—English, Mandarin, Korean and Bahasa. A lot of interesting technologically challenging projects were in our portfolio during the 1990s. We became an ISO 9001 certified company in the mid-1990s and were among the first five companies in India in the software industry to get this certification. We then got certified as a SEI/CMMI Level 5 company in 2006 and ISO 27001 certified for information security in 2011.”
It was in the 1999 that Congruent recast itself as Congruent Solutions and one of its first decisions was to set up a presence in the US in 2000. Its first client in the US was from the ‘retirement industry’ and that had a big role to play in Congruent being in that vertical today. The company was getting tremendous insights into retirement industry. It evolved as a specialist service provider in the pension administration industry.
Jayaraman says that, by 2007, it was becoming apparent that the smaller IT services companies faced the real danger of getting marginalised unless they deepened their value proposition to the market. Many of Congruent’s customers were indicating that they were looking for an easier Business Process As A Service (BPAAS) platform. Congruent took the plunge to develop a new platform around 2009.
It came out with COREDC, its proprietary record-keeping system. It is not defined by just the US rules. “Our product is multilingual. We can redefine the rules for Rwanda. It has 22 modules end-to-end so that we can break them up and sell.” However, as Jayaraman puts it, the product journey is not for the faint-hearted. It put in a lot of its own funds to develop the product. SME investor Fulcrum Venture India made an investment of R8 crore in Congruent Solutions in 2013.
Congruent launched its product first in the US in 2013. Apart from the fact that the company knows the US market very well, the yield the US market gives for a software product is higher than any other. All went well and the company was on the verge of getting a large customer for its product. It was one of the two companies short-listed to get the contract. Unfortunately, its size went against it. It was seen as a small company with just 200-plus employees and the large customers thought it was risky to trust the company. It became imperative to find a partner of size.
Congruent started dialogues with several IT majors. Cognizant Technology Solutions saw the potential in the product and came in as the implementation partner. “We provide the products and all the customisation and they come into implementing the project. They help with all the integration challenges. They have been a fantastic partner and do not act like the big brother. With the entry of Cognizant, Congruent cracked the American market and has acquired a large client base.”
The US pension industry was hurting with its legacy platform’s sheer size and complexity. The product had to provide solutions to the pension provider. Jayaraman says the entry of Congruent’s platform was like the compact Maruti 800 making the existing Ambassadors and Premier Padminis look like dinosaurs in the Indian automobile scene.
With the recent major breakthrough, doors have started opening. Consultants have started referring this product to their clients. Congruent is all keyed up to move forward. “We have leveraged our business knowledge and technological expertise to unlock something exciting. We have succeeded in the most demanding of all product markets, the US. The TiECON recognition is an external validation and reinforcement of our own belief and conviction that we are on a very special mission and a huge value creation exercise,” says Jayaraman.