Return to Virginia Business - May 2002

Related stories:
This year's Fantastic 50 (intro)
The 2002 Fantastic 50 (chart)
Highest Overall Growth Rate: RGI - Robinson Gareiss
Manufacturing winner: Parker Compound Bows
Retail-Wholesale winner: Schiller International
Service winner: The Cube Corp.
Technology winner: TechBooks

by Brett Lieberman

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As he does every month, TechBooks President and CEO Tom Cunningham sat down on a recent Tuesday morning with senior staff in Boston and Pennsylvania to talk about the company's East Coast operations. And over the next couple of days, Cunningham held similar meetings with TechBooks managers in Los Angeles and New Delhi, India. The sessions didn't leave Cunningham road weary, however. Despite the far-flung locations of his management team, Cunningham only boarded a plane once during the three days of meetings - videoconferencing did the rest.

Employing technology to save time and money is a way of life at TechBooks, an electronic content publisher, as underscored by Cunningham's videoconferencing habit. It helps explain how the firm, founded in 1988, has become a global company with more than 2,300 employees on three continents, with clients such as General Electric, publisher McGraw-Hill and major American libraries.

The firm has lately been undergoing phenomenal growth. TechBooks' revenues have increased 1,494 percent since 1997's $3 million to $45.2 million in 2000 and show no sign of slowing. Revenues in 2001 reached $55 million, and the company expects them to grow 20 percent or more this year.

Technology explains how the company can spread itself across so many time zones, which cuts labor costs. When the work day begins in Fairfax it is just ending in India - a nine and a half hour time difference - where the firm employs about 1,950 of its 2,300 workers. But for TechBooks, stretching itself around the globe has been worth the effort. The employees in India are not unskilled workers toiling for low wages; most are college-educated and earn high salaries for the region.

Employing skilled workers from a distant market with lower labor costs - known as the "Delhi model" around the company's Fairfax offices - is key to the company's success. Using the overseas work force allows the company to provide customers additional services and earn a profit in a sector that normally has slim margins. "Our plan is to utilize the offshore capabilities of a very trainable, educated, English-speaking, low-cost training pool," Cunningham says. This system has allowed TechBooks to maintain or improve services, while competitors have gone out of business or been forced to cut customer service to remain price competitive. "Our competitors that didn't do that don't exist anymore," he says.

Much of TechBooks' growth is due to acquisitions that added new customer bases. The company has acquired four businesses since 1999, the year Cunningham was named CEO by co-founder Rakesh Gupta. The most recent acquisition was Composition Services Group (CSG), a Boston-based corporation specializing in composition deliverables and related services for the financial printing industry. However, the company's overseas capabilities have enabled it to expand capacity far beyond the capabilities of the companies it purchased. Currently there are no planned acquisitions on the horizon, but Cunningham doesn't rule it out.

TechBooks has found corporate publishing to be a lucrative new market as businesses try to cut their own publishing costs. Companies such as defense contractor Lockheed Martin and helicopter manufacturer Sikorsky are cutting costs by putting more of their information online or in electronic formats to reduce publishing costs. Sikorsky is using TechBooks to put service manuals online, so that if a helicopter breaks down in North Dakota the person servicing it can quickly access the most recent information instead of maintaining or tracking down manuals.

A major expansion in India is not planned, but future growth would likely occur outside of New Delhi and possibly India. New Delhi was one of India's more sophisticated cities when TechBooks started there 12 years ago when the information technology revolution had yet to hit high gear. Today, it's one of the more expensive cities in the region.

Return to Virginia Business - May 2002