Year in Review
FY 2016-17 was a challenging year for business growth. Lower economic growth in client markets was compounded by geopolitical climate in major client countries favoring anti-globalization policies. The increasing maturity of the off shoring cycle and improving technology capabilities also meant our clients favoring cost reduction through automation instead of pure outsourcing. Digital continued to be a large ''''disrupter'''' for clients as ''''old'''' business models were challenged by new tech-enabled businesses. Clients reacted to economic, political, and business uncertainties by re-shoring some jobs and reducing contract spends and committed durations.
These headwinds coalesced to produce a year of decreased USD revenue for us - down by 2.6% over the year prior. This annual revenue decline - our first in operating history - was prefaced by key metrics that otherwise painted a very encouraging picture. Overall sales for the firm - new contracts and orders - were very strong and we notably added a number of large clients across each of our businesses in both existing and new service lines - a result of our sustained investment in select ''''productized'''' services. Diversification improved further - revenue from our top five clients stood at 61% and top-10 client concentration at 74%, with growth skewed towards our emerging clients'''' portfolio.
We won some notable awards and recognitions in the year. We were again Asia MAKE (Most Admired Knowledge Enterprise) winner, highlighting our culture of learning and development; we won the American Society for Quality Asia award for operational excellence and the Golden Peacock award for Business Excellence. Our technology and Analytics investments continued to help us stand out - eVigilPRO -an eClerx software application - was a Dataquest winner, and Analytics India named an eClerx client program the ''''Most Admired Data Science Project of the Year''''.
Last but not the least, we continued our partnership with innovative charity organizations to further leverage our CSR spend. Our initiatives over the years have touched over 30,000 lives - mostly children in underdeveloped regions for whom these support networks have helped develop self-reliance and purposefulness where there was previously none. We have directly funded projects as well as encouraged our employees to actively engage in charity, support, and development work across India, USA, and UK. As a management team, we are particularly proud of our CSR initiatives.
Progress on Our Strategic Roadmap
We set out some key initiatives for the firm last year and it’s worth taking stock of our progress on each of these.
First, we set out to improve access for clients to our full set of capabilities as a firm as opposed to individual verticals, and implemented processes and systems to encourage cross-vertical selling into our clients; this started bearing fruit with clients becoming buyers of multi-vertical services. We also centralized client marketing and introduced targeted return metrics to drive better coordinated client strategy and outreach.
Second, as clients increasingly look to service partners to co-create solutions, being physically closer to decision makers and having in-country delivery capability has become ever more critical. This year we announced the set-up of our first US delivery centre in North Carolina and the set-up of our new Austin office - also the centre of our Analytics business - and the creation of our Canadian subsidiary. Our centre’s in Verona and Phuket continued to serve as hotbeds of innovation and advanced capabilities. This year, we also delivered the largest number of consulting and Analytics programs in client locations. These initiatives helped deepen our engagement with clients, allowing us to shape off shoring opportunity much earlier in decision cycles.
Third, we continued to drive growth in Analytics and we had our best year, leveraging client-location delivery and technology to drive new growth. We continued to focus away from ''''managing'''' data to extracting value and insights, and enjoyed early success taking some of these services into other verticals. We are convinced that the success of our Analytics initiative will be critical to the overall success of the firm.
Finally, we further tuned our technology efforts to ensure that we capitalize on emergent areas. Our focus in 2017 was robotics and machine learning, wherein we have developed our own technologies and significantly broadened partnerships with developing platforms. During the year, we developed and implemented a number of use cases for clients, and integrated these technologies to transition some FTE contracts into managed services. This drive to tech-wrapped services remains core to driving differentiation, long-term value, relevance, stickiness, and profitability for our Company.
Management and Advisors
This year, we added members - to our independent board - who have direct relevant experience of working with our clients and industry. We also established an industry advisory group, retaining key senior ex-clients as strategic advisors to guide our service development and client outreach initiatives. We continued to make key hires to strengthen management, notably hiring a Managing Principal in the US to run eClerx Markets. We believe these initiatives will shape the future of our company by guiding investment decisions, helping in the journey of becoming closer and more relevant to clients.
A Decade as a Public Listed Company
In December 2017, we will complete a decade as a public listed company. Over this time, we have delivered strong results and become an increasingly diversified provider of niche services, leveraging operational excellence, domain expertise, and technology. We have developed and sustained large client relationships, won many industry accolades, faced down competition from many established companies, and negotiated severe events such as the great financial crisis of 2008. We have also developed a reputation for the highest level of corporate governance and management integrity, serving to encourage foreign investment into midsize Indian companies.
You should feel proud of the Company that you today support. Whilst we may undoubtedly be in a period of greater demand uncertainty than in the past, you should feel confident that we are better positioned than ever before to capitalize on the opportunities available in the market.
V. K. Mundhra Chairman