Lessons from The IT Slump

The bursting of the Internet bubble was a testing time for Vision Systems Group, a Somerset provider of database management and Web-enabled services."In any downturn we are the first tobe affected," says CEO Viswa Mandalapu,” because the first major expense a client  would look  to  cut  is consulting services."

But Vision Systems pulled out of the slump and flourished. Revenue rose to $10.5 million last year, up from $7.5 million in 2002 and just $370,000 in 1998, the year the firm got started. Today, Vision Systems has 150 employees and offices in Pennsylvania, California, Kansas and India.

 
When the bubble burst, Mandalapu learned to be careful
about whom he dealt with.

Mandalapu, 36, left India in 1991 to study for a Master's degree in computer science at City University of New York. He earned the degree in 1993 and worked in information technology departments for firms like Prudential Financial and Chase Manhattan Bank before founding Vision Systems.

The company started in Hackensack and moved to Somersetin 2000 to be closer to the pharmaceutical industry and other mainstays of the regional economy. Today's clients include Merck, Pfizer, Verizon and Citigroup.

Vision Systems learned valuable lessons while coping with the hard times for IT providers. Not only did the company suffer a drop in contracts, but it faced late payments and defaults by clients. "That taught us to be careful with whom we were dealing," says  Mandalapu, who also serves as CFO of the company. "And by doing that, we controlled our cash flow.”   

Vision Systems focuses on databases, Operating systems maintenance and other key IT areas. "We spread our strength and leveraged our abilities in six or seven core technologies and services," Mandalapu says. " That kept our numbers steady.

The company evaluates client needs on a quarterly basis and provides employees with training to tackle whatever projects the clients bring. "We have not laid off anybody in the last six years," says Mandalapu. "When we feel an employee is not up to the mark, we retrain him. We have always kept the standard of work quality very high.That was a key factor in keeping our head above water.”

To compete with firms that outsource IT work to low-cost countries, Vision Systems strives to keep its own costs as low as possible. For example, he doesn't charge clients for overtime work. "The question," he says, " is how do we keep the work here and sustain it ?”

Mandalapu doesn't doubt his ability to do that. He hopes to increase the company's workforce to 250 employees next year, and to reach $18 million to $20 million in revenue. Adds he: "Five years from now, I would like Vision Systems to be a $50 million company.

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