TechnoDyne LLC’s Padma Allen on innovation and growth

Padma Allen, president and chief financial officer, TechnoDyne LLC

Padma Allen, president and chief financial officer, TechnoDyne LLC

Dr. Padma Allen never intended to become an entrepreneur. It just happened.

Allen, a board-certified physician, was practicing internal medicine in New Jersey in 1998 when her husband, Reddy, left his job at Ernst & Young to found TechnoDyne LLC, an IT firm that provides a range of services to large public and private companies as well as government institutions.

“He thought he could provide more value to customers, so he asked me to help him out for a couple of weeks and take a two-week break from my practice to help him set up payroll, HR, secure office space and register his domain name,” Allen says. “I said, ‘Sure,’ and we were lucky enough to secure our first large project right away. My husband hit the field, and someone had to hold the fort at home. That turned out to be me.”

It wasn’t long before Allen’s two-week break became two months and then turned into a full-time job. Today, Allen, the company’s president and chief financial officer, has become a nationally recognized innovator in the IT services field. Her company was named a 2010 Ernst &Young Entrepreneur Of The Year in the Consulting Services category for the state of New Jersey.

Smart Business sat down with Allen to discuss how she helped take the company from startup to nearly $100 million in annual revenue in just over a decade.

What skills did you learn as a physician that you apply to TechnoDyne as an entrepreneur?

There are three. First is the ability to deal with stress. I was in one of the doctor residency programs in Harford Hospital in Connecticut and worked a lot in the emergency room. After that, I shifted to East Orange General Hospital in New Jersey. There were a lot of life and death situations that I was faced with. I saw cardiac arrest cases for many patients and saved many lives. Based on that, nothing that happens at TechnoDyne is a life and death situation. At the end of the day, nobody’s going to die here, so I’m able to work very well under stress — even the worst-case scenarios where a client may cancel a project. It’s not that stressful.

The second is the ability to work several hours without sleep. Residency training in the United States prepares you for that. We used to work 36-hour shifts.

Third is the ability to multi-task. When you’re a doctor, you’re doing numerous things at the same time. These three skills helped me alot in the early days of the company.

What were some of the early challenges of getting the company up and over the first hurdles?

Getting the initial team in place. For about a year, it was just me and Reddy. He was always outside in the field on client-related projects; I was always inside, managing everything that had to be managed. So moving away from that and getting the people in place was challenging, mainly because it was the first time I had hired people. So it was really about trust and me trusting they would do what needed to be done.

Then, by the time we started to be a viable business came the Internet bust. We were two years into the game and suddenly found ourselves facing one of the biggest challenges we’ve faced. Several of our competitors closed shop, and we were inches away from closing shop, too. But we hung in there, fought and stayed afloat.

At that point, we realized we had to have a different strategy, expand our business and work with different businesses. We needed to figure out how to be recession-proof.

How have you done that?

From 1998 to 2000, we were focused on the commercial sector — large enterprises in the commercial sector — because that was where the relationships were. When the economy changed in 2000 and 2001, we were literally looking on the ground for business. So we started looking at other markets and asked ourselves who we could work with who would be reasonably recession-proof. There was this big segment of the government sector and we said, ‘Let’s try this out.’

We stayed the course, got all of our certifications in place, and it was a long road. But once we got onto it, it’s turned out to be very good and helpful. They’ve been good clients. We work with 13 of the 50 states, providing technology solutions. We work with four agencies in the federal government, as well. Once you get to that point, where you’re a known quantity, government is a great customer to work with. And, given this most recent economic downturn, we weren’t as affected as many of our competitors were because we had expanded our market and diversified our client base.

How would you describe your value proposition?

From a TechnoDyne perspective, we have the pedigree of people from former Big Four and Big Five accounting firms, as well as people who come from large private sector industries and even some from large governmental agencies. But because we’re small, we’re much more nimble and our cost is lower. Our clients get the same quality of service that they may get from a much larger firm, but they get it faster, better and at a lower price. Today, we have 500 employees scattered across 13 states in the U.S.

Where do you find opportunities for growth?

We’ve been very conservative in the offerings we have to provide, given the economic cycles. So we look at where the customers are spending money. A couple areas we’ve identified for growth are virtualization of data centers and cloud computing, both on the government side and private sector side.

How have you forged relationships in the government space?

Coming from almost zero relationships when we started, my husband and I have built it one contract at a time. One thing that helped was being certified as a minority and woman-owned business. The government has good set-asides for those. That helped a lot. We do have competition — the big guys like IBM and Accenture — but we are able to get a piece of the project that we can deliver because of the minority set-aside. And, once we show what we can do there, we’re able to compete against the Big Boys for the larger contracts.

Looking back to 1998, what do you know today that you wished you knew on day one?

Having a board of directors very early on would have been a difference-maker. Today, we are reaching $100 million in revenue and still don’t have a board. We do a lot of it ourselves, but having a good board of directors of past CEOs would definitely be helpful. The second thing I wish I’d known back then was that I shouldn’t have been as conservative with cash. We were slow and organic with our growth. We didn’t want to take any loans from our bank or leverage ourselves. If I knew then what I know now, I probably would have mixed organic growth with leveraged growth.

Third would be getting a formal education in business. I finished my MBA last year but wish I had done it sooner. Your out look changes when you have a business degree from a good school.

How do you balance your dual roles of president and CFO?

As president, I am looking forward to how I can grow the company and take it to the next level, work with the CEO and how we can get to our billion-dollar goal in the next seven to 10 years. The entrepreneur in me likes when there are folks coming in with ideas that I want to launch to get us there. But then as CFO, the numbers need to make sense. So every time someone comes with an idea I need a business case, the numbers, etc., so I play two roles that constantly are internally colliding with each other. But it’s a healthy balance.

Let’s talk about the future. Where do you see yourcompany in the next seven to 10 years?

Reaching our billion-dollar goal. We have a pretty solid road map. What we’ve done is define our goal of where we want to be and then we work backward — what do we need to do now to get there? One is those items is that we definitely want to expand more in the government sector. If you look at the history of companies that have passed the billion-dollar mark in our space, between 60 and 70 percent of their revenues are from the government sector, especially from the federal government. We already are in that space, so we are looking to expand it further. We’re looking at which next big thing they want to get more involved with, and one is cyber security. With so many applications moving onto the cloud, there is definitely a big risk that needs to be addressed. Mobile security is another. We also want to expand our commercial sector.

How to reach: TechnoDyne LLC, www.technodyne.com

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