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Qualitest Prepares for Further Inorganic Growth & Sector Specialization


We recently spoke with Qualitest, the world’s largest QA pure-play. The company is in investment mode to accelerate its growth, backed by its majority owner, PE firm Bridgepoint. The company has added Cognizant leaders to its executive team (CEO, CMO, and India MD positions) with the intention of reaching $1bn in revenues in the next five years.

In support of this drive to accelerate growth, Qualitest has moved from a decentralized, country-led business to an integrated organization, and has embarked on several initiatives focusing on process standardization and automation, sales, and HR.

With its sales function, Qualitest is introducing an account management approach, land and expand strategies, and team-based selling, involving delivery teams in its bids. The company has maintained its focus on multi-year managed testing deals and has expanded its GTM target, building on its strengths in Israel, U.S., and the U.K, to include South America, Continental Europe, the larger Middle East, and India. It now targets five broad sectors: technology, BFSI, healthcare & life science, telecom, retail, media, & entertainment. The introduction of a systematic vertical sales approach is a significant change from a country-led GTM approach.

With its HR function, Qualitest has taken a comprehensive look across the employee lifecycle (from recruitment to upskilling, internal mobility, and succession planning) and matching the needs of projects. The program is vast, with Qualitest focusing initially on analytics to measure its HR effectiveness and then deploying intelligent automation.

The transformation of Qualitest also includes its value proposition. It has reshaped its portfolio significantly. Functional automation with agile/continuous testing has been a priority, along with digital and application migration to the cloud. Data and analytics, enterprise COTS are also priorities, along with AI. Its December 2019 acquisition of Israeli start-up AlgoTrace helped kickstart its AI offerings, focusing initially on AI-based analytics. Since then, the company has expanded its AI analytics and automation portfolio, with chatbot and data models as the new frontier. Qualitest has also rolled out several internal AI use cases in its sales and business support organizations. Examples include next best offer/action, fraud detection, and task allocation. The portfolio transformation continues, with AI and continuous testing as priorities.

Bridgepoint taking a majority stake in October 2019 has helped Qualitest accelerate its inorganic growth. The company has acquired four firms in 2021 so far: QA InfoTech (QAIT) in India, Olenick in the U.S., Comply in Israel, and an unnamed QA specialist in Germany. The first three acquisitions reinforced Qualitest’s presence in its core markets. The German specialist brings a footprint in a new geography in Continental Europe.

QAIT doubled the presence of Qualitest in India to a NelsonHall-estimated 2k FTEs, representing ~45% of its headcount. In terms of delivery, Qualitest’s value proposition was much more onshore-centric than its competitors. QAIT significantly changes the delivery profile, increasing its scale in India and giving it more recruitment visibility in Bangalore. Qualitest now plans to expand to Chennai and Hyderabad.

QAIT also somewhat expands the capabilities of Qualitest outside of testing services. The company has been active in agile software development, notably for front-end applications. While Qualitest’s primary focus is on QA, the company has also expanded to RPA. With clients awarding bundled development and test deals, Qualitest will gain from these development skills.

Chicago-headquartered Olenick Associates brings in 250 experts and a U.S. mid-west presence that complements Qualitest’s existing east and west coast footprint. Olenick brings in a client base in the financial services, legal, and utility sectors, with specific expertise in the electricity industry. The company provides performance testing across front-office applications (web and mobile apps, IVR, and text messaging), an offering that has increased in popularity after the Derecho storm in 2020. Qualitest has also gained through Olenick's capabilities around project management, DevOps.

Comply is a smaller acquisition, with 83 personnel. The company operates in the regulatory compliance space for the pharmaceutical and medical device industries, which are enjoying more vigorous growth than many other sectors. Comply works beyond QA and has a specialized software product, Skyline, for process analysis. With Comply, Qualitest gains further specialized and vertical capabilities. It will need to continue to invest in developing the acquired business.

Finally, the German pure-play brings an onshore presence with a client base in telecom and insurance. The company is sizeable with 250 employees and opens up a new territory for Qualitest. This is the first step for Qualitest into Continental Europe. No doubt Qualitest will deploy its model in the country and leverage its expertise in telecom and insurance in its significant geographies. The journey continues.

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