From the mid-1960s to the late 1970s, licensing was a key factor in India’s industrial policy framework. It imposed a number a number of controls on industrial expansion. Large businesses began focussing on core, heavy industries and improved their manufacturing capabilities.
But the industrial policy framework began to be liberalised from the late 1970s. Further, there were major economic reforms in 1991 which opened up opportunities for growth. Slowly, people moved on from hardware and began talking about software.
This inspired budding entrepreneur Diwakar Nigam to build software in India, for India. He wanted to change the way businesses work. He realised that building large scale software products will need a specialised company. Diwakar went on to launch Softek in 1979 and began developing compilers, operating systems, word processors, etc.
Diwakar was also a founding member of NASSCOM, India’s apex Information Technology industry association. He was one of the members of NASSCOM’s Anti-Piracy Task Group. His second stint as an entrepreneur began in 1992 when he and TS Varadarajan started Newgen, a software products company whose platform enables organisations to rapidly develop powerful applications.
“Back in those days, I saw how a simple process of getting a loan used to take an entire month. It was then I decided to build an imaging software to automate the flow of paper in enterprises. I decided to start my own enterprises business, and that’s how Newgen was born,” says Diwakar Nigam, Chairman and Managing Director, Newgen.
“I coined the phrase ‘One World, One Workplace’, envisaging that the flow of images across the enterprise would result in a smaller world where organisations have the ability to operate from anywhere,” he adds.
With Diwakar’s vast experience in IT, Newgen grew into a Rs 520 crore business. The New Delhi-based business has become a global provider of Business Process Management (BPM), Enterprise Content Management (ECM), and Customer Communication Management (CCM) solutions.
“Newgen’s customers use the platform to rapidly design, build and implement enterprise-grade custom applications through its intuitive, visual interface with minimal coding,” he says.
The company has a footprint in over 60 countries and offers solutions deployed at banks, governments, BPO’s and IT companies, insurance firms, and healthcare organisations.
In an exclusive interaction with SMBStory, Diwakar recounts his Newgen journey and explains his recipe for success.
SMBStory: How did you expand Newgen into a Rs 520 crore company?
Diwakar Nigam: We started by deploying our solutions for a global bank and gradually grew into multi-vertical industries. We made sure to have a good presence in various regions and not only India. We ventured into MEA, APAC, and the US markets to expand our horizons. We also recently opened an office in Australia.
The culture of innovation in the company has enabled us to grow and retain our relationships with customers. Thus we were able to diversify our product and service offerings, as well as maintain competitiveness in industries like shared services, pharmaceuticals, and utilities.
Our 250-member strong R&D team also makes a huge difference. In order to enhance the existing products and develop new ones, we keep investing in our R&D department. This helps us maintain a technical control over the design and development of our products. The products of the R&D activities will continue to differentiate us from our competitors and position us well for winning complex projects.
SMBS: What were some key milestones in your business journey with Newgen?
DN: Newgen has hit many milestones in its 26-year journey. The first milestone was getting a global bank as our first client to centralise its operations in India to one location. In 2010, our product OmniDocs 7.0 was released, which focussed on stability, performance and improved manageability.
In 2011, RMS 2.0 was released with enhanced record policies, search and retrieve operations. ZapIn 1.2.1, a mobile capture solution, was released in 2013. Next, iBPS 2.1 was released in 2014. In 2017, OmniOMS 8.0 was introduced, which focussed on end-to-end interactive and on-demand use cases, and real-time communication.
Last year, we released NEMF 4.0. This version of NEMF brings new features and functionalities that simplify the building and managing of enterprise mobile applications, making it easier, faster, and more efficient. Our products and solutions have also been recognised by leading analysis firms Gartner and Forrester.
SMBS: How did you raise investment?
DN: We have raised venture capital/private equity investments in the past from several companies. In January 2018, we came out with our initial public offering and it received an overwhelming response. It was oversubscribed 8.25 times the offer size. The total size of the IPO was Rs 425 crore, which included a fresh issue of Rs 95 crores. We were listed on the NSE and BSE on 29 January 2018.
SMBS: How have you impacted the businesses who use your solutions?
DN: India is rapidly moving towards a connected future and we have been endeavouring to make India a digitally-connected nation. Newgen has been driving digital transformation by designing and delivering innovative software products and solutions for various industries. These products and solutions have served enterprises and helped the general public.
Through our platforms, we provide an amalgamation of information/content, technology, and processes, which are the building blocks of digital transformation. This has enabled clients to reinvent their workplaces and achieve greater agility, accuracy and efficiency in transforming processes, managing information, enhancing overall customer satisfaction, and driving enterprise profitability.
For instance, one of the largest banks in India partnered with Newgen to digitise its lending process which used to take months. After the implementation, the bank was able to service its customers better and keep up with the changing market. Newgen’s solution helped them to raise the standard of customer services, improve their business processes, drive business agility and achieve cost effectiveness across operations. Now, a bank account can be easily opened in minutes.
SMBS: What challenges did Newgen face in sustaining and growing the business?
DN: Being in the software product industry needs a lot of patience and persistence. Building a unique and robust product requires a great amount of effort and time so that customers can use it for many years. This can become quite challenging.
Further, increasing geographical footprints was a challenge. But we turned that into an opportunity. We did this since our innovative products and solutions were recognised by leading analyst firms, which we leveraged to reach new geographical territories.
Thus, I can say that innovation and persistence are the keys to make a business successful. It’s critical to build great products for customers, give them a lifetime of experience, and keep innovating. These are mantras every budding entrepreneur must abide by.
SMBS: What is the way forward for Newgen?
DN: In the last five years, our top-line growth has been about 20 percent year-on-year. I expect the growth momentum to continue. We aim to pursue growth strategies to expand the market share across key geographies and solutions.
The company has multi-prong strategies, including expanding its business and geographical footprint, and focussing on attractive verticals in select, mature markets including the US and the UK. We are expanding our strategic business applications to new verticals. Newgen is also doing focussed R&D to expand our product portfolio.
The cloud/SaaS business continues to be our fastest-growing revenue component. The cloud revenues grew by 157 percent YoY, though on a smaller base.