Dept has announced its operations in India by acquiring Tekno Point, a Mumbai-based organisation.
It aims to use Tekno Point's 500-member team of Adobe specialists to accelerate its service offering for its global client base.
Tekno Point was founded by Himanshu and Yash Mody. According to Himanshu, the fourth version of this company now has a singular focus on Adobe DXP and offers an in-depth understanding of the technology across several industries.
Campaign India caught up with Himanshu Mody along with Dimi Albers, CEO, Dept, and Vishnu Mohan, partner and chief growth officer, Dept, to learn more about the acquisition and entry into India. Below are edited excerpts:
How do you view Tekno Point, and what made them the perfect fit to acquire to begin operations in India?
Dimi Albers (DA): The Indian market is an important part of our strategy for the broader Asian market. We entered Asia 13 months ago and wanted to replicate the model that we first built-in Europe and then the Americas. The three key markets within Asia Pacific are Australia, India and Southeast Asia. We did our first transaction in the market in Australia in September, and now we have Tekno Point joining.
What’s the model that you have been working on?
DA: We started as a small Dutch agency in 2015. That small Dutch agency focussed on platform work, particularly the design and development of websites, commerce and apps. We wanted to create a model of an integrated agency that works across the full digital customer journey, both on the technology and marketing side, which goes international and global. We bring together capabilities across the full spectrum of tech and marketing to help our clients outperform the markets.
We built this up first in the Netherlands and Europe till 2018. We covered 11 markets in Europe before entering the USA in 2019. We built that to 50% of our business before entering Asia Pacific in 2022. We are now at 4,500 people across geographies (including Tekno Point).
At Dept, how do the acquisitions work? Will you be retaining the agency name?
Vishnu Mohan (VM): When we take over agencies, we have a process in terms of gradually getting into a one-brand approach. But all agencies that join us typically start with a joint name. So it will be called Tekno Point/Dept.
At some time, they’ll move on to become 100% Dept.
DA: The speed of this depends on the culture and business value of the brand. Tekno Point is a super strong brand working in the Adobe space. So, the co-brand will help us both, to begin with.
Vishnu, it’s been a year since you joined Dept. When you took over, in an interview with Campaign Asia, you mentioned you had a list of agencies drawn that you were interested in acquiring. Is this (the acquisition) the route, the one you’ll be looking to use to grow?
VM: Inorganic or acquisition is a part of our growth strategy and an entry strategy for markets. But we’re not looking at just gaining points on the map. We’re looking at assets that are of standards that add up to our global capabilities and make us stronger as a group.
That process led to a review of many agencies, many of which I already knew of. And now, we’ve acquired some of them and some are in the pipeline.
We are around 180 people in Australia now. With Tekno Point, we have a world-class Adobe specialist agency with around 500 people working. We believe this is a strong entry strategy for the country on the back of tech, which is one of our strongest points. This gives us the platform to augment it with market caps, and we can add to it with a combination of organic and inorganic growth to the extent that we need.
You mention there are some acquisitions in the pipeline. Would they be on the tech side itself?
VM: The acquisitions would be evolutionary because tech itself is evolutionary. Right now, the important thing is to integrate this acquisition within the organisation to fulfil the purpose of internationalising Dept and making it global.
Then, we need to augment it with what clients are asking for. CX is a big opportunity for us and is a big gap in the industry. We want to have this quickly, whether we do it organically or inorganically.
Added to this, we want to move forward quickly to growth marketing which is a combination of performance, media and data. While there are companies that operate in the space, we believe there’s an opportunity to find a good asset that can be differentiated within the market.
Growth marketing in totality contributes to around 35% of our revenue within Dept.
Himanshu, could you tell us a little more about Tekno Point? When did you launch and what are your strong points?
HM: We’ve been around for 22 years. We started Tekno Point straight out of college, and it’s the fourth version of what we began. We have partnered with Adobe for 18 years. As Adobe changes focus and brings out new offerings, we do the same. We have worked very tightly on the digital experience side for Adobe products, and most of the brands in India depend on that to roll out their digital offerings.
In the current version of the company, we specialise in digital experience which consists of four things – customer experience, personalisation, analytics and API development.
We started as a gaming company. We made games as a production house for agencies. That lasted for a while until the Flash story was over.
Between 2012 and 2017, we were official trainers for Adobe. Tekno Point became a training partner for customers, employees and partners for Adobe the world over.
In 2017, we made two important decisions – we’d focus on India as a market and focus on Adobe Stack. Today, we have 25 big brands working with us and these include Tata Capital, Bajaj Finserve, and Asian Paints. We have eight insurance companies and three banks among the clients, some of them have been with us for five years. We had the information as trainers and had a blueprint of what to do right. We changed benchmarks from six months to three months to go live with projects.
One of the stated targets you had was about hiring 1,000 people across APAC by the end of 2024. That’s probably being revisited given the speed of acquisitions...
VM: We’re at 700 now. We won’t need to wait till 2024 for that. We want to have 1,500 in India itself by 2024. This is a market of scale, and when you have an opportunity you jump.
Tekno Point is an example of the same. The company was at 20 in 2017 and has moved to 500 in such a quick time. The last 300 came in the last year. We are accelerating the global Adobe practice and are using Tekno Point to deliver this across the world and so we have a real opportunity to scale for the same. Reaching 1,500 employees is not an unimaginable mission.
Dept's internal mission is 'big enough to cope, small enough to care'. The team is growing quickly in size, so where does the 'small enough' ceiling come from?
DA: The way we look at is very straightforward. Although the numbers might be sizeable, they’re not when you compare them to some of the other companies.
The key is to what kind of companies join and the culture of those. You add teams that have the same cultural values that resonate with ‘big enough to cope and small enough to care’. We want leaders who become owners of the overall company and that’s a part of our model.
We have 250 partners and each has paid their own share for it. That’s super important because any client has a personal relationship with the owners of the business. Our employees also have a personal relationship with multiple owners of our business which makes us a vastly different offering than any of our competition.
Culture is like a good party and it’s all about who you let in through the door.
Vishnu, you spent almost two decades with Vivendi. How different has the last year been at Dept?
VM: This is a 50:50 technology marketing company and the holding companies are primarily marketing companies, so it’s very different.
There are a few bits and pieces of occasional tech acquisitions, but they’re not really technology companies.
When you look at a customer journey, they come at the end of the funnel. I believe this is a great experience in terms of looking at organisations that have evolved themselves to be in the upper funnel. To my mind, that moves from being a bender status organisation to a partner status. They’re there from the very beginning of the client journey and are sitting with one as a partner. Your ability to cascade that down to show deliverable results in terms of the technical infrastructure is a phenomenal experience and that’s one of the reasons why I joined the company. I can go out into the market and show them that this is a different company and one they haven’t seen before.
The response I’ve got is more positive than I’ve ever gotten before too. It’s from clients, and talent too, that want to join the organisation.
When the news (of the acquisition) hits the market, there will be a lot more influx of this too.
Talent is perceived to be a major issue by agency heads. Are you facing the same issue too?
VM: The approach to talent is that if we can be with them from the beginning of their journey, and groom them from the start, then you can create a sense of loyalty which makes them last longer with the company.
The amount of investment that Himanshu and his team have made in inducting and training the team has helped. They’ve trained them for six months before they hit the ground running.
They are allowing women (by allowing flexibility) to get into the tech field and so many of them are entering it.
This has allowed us to attract talent and retain the talent for the longer term.
HM: We’ve been lucky with the attrition rate being low. It’s less than five per cent.
That could be because you’ve grown from 200 to 500 in the last couple of years, so you’re yet to see team members move out...
HM: The early 40 people who were the core, are still with us, so we have managed to retain the talent. We don’t depend on lateral hiring for scale and groom talent from scratch. This has allowed us to grow at scale without affecting clients. Some of our relations are as old as five years and the same faces our managing those customers. That makes the customers happy too as they don’t need to deal with newer teams. I think we’ve cracked the code of growing without having to worry about attrition.
VM: The work does the talking. We won the Webby Network of the Year too, so recognition of work would be why people would want to join us.
Dept also operates a Web 3.0 offering through Web3/Dept. With all the noise around it, where do you see this going?
VM: We have almost 300 people in this team, and it contributes around 5% to our revenue globally. We always want to be forward facing and are doing some cool stuff in terms of bringing immersive experiences to brands.
There’s a lot of ignorance around Web 3.0 right now. Everybody is gravitated to jargon right now. It’s so important for the right organisation to handhold the client in the right way to navigate the space. We have established labs within our offering as a way to be able to train internally and our clients.
Right now, everybody is confused, and the Metaverse today is not how it is meant to be. The thing about technologies like AI and VR can help create more immersive experiences which will make people re-look at their websites and try to use these technologies to create better experiences than we’ve seen in the past.