small & medium business (smb): the next frontier: playing the long tail - talk by raman roy on...
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Small & Medium Business (SMB): The Next Frontier: Playing the Long Tail - Talk By Raman Roy on 27 January 2010 at the NASSCOM CEO ForumTRANSCRIPT
Raman Roy Chairman & Managing Director
www.Quatrro.com
India is growing at decent space. Within IndiaIT–BPO industry continues to exhibit resilience
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Indian IT-BPO Sector: Revenue Aggregate and Share of GDP
• Software and services revenues aggregated to about USD 60 billion; export growth of 16 – 17%
• In the current fiscal demand for ITO and BPO services has been weak due to declining discretionary spending, delayed decision making and vendor consolidation
• Growth levels have moderated -considering the global events which have unfolded in 2008, this growth is a significant achievement
• The slowdown is expected to accelerate the transformation of the industry, which would manifest itself in terms of cost savings, productivity enhancement, enhanced utilisation levels and greater customer interaction
• Domestic Market – healthy growth of 20% in IT Services above 40% in BPO
Source: NASSCOM
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Companies Stack Ranking
1,000
Company Revenue / # of Employees
# of Companies
Fortune 1000 Companies
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The Inverted Beer Glassand
The Frothy “Head”
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Companies Stack Ranking
1,000
Company Revenue / # of Employees
# of Companies
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5,000
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Companies Stack Ranking
1,000 10,000
Company Revenue / # of Employees
# of Companies
Fortune 1000 Companies
Large Companies
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5,000
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Companies Stack Ranking
1,000 10,000 40,000
Company Revenue / # of Employees
# of Companies
Fortune Companies
Large Companies
SME Companies
5,000 20,000
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Companies Stack Ranking
1,000 10,000 40,000
Company Revenue / # of Employees
# of Companies
5,000 20,000
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Serving the HEAD of the market isn’t a bad strategy and has build great businesses
Serving the TAIL efficiently can be even more compelling
Moving from
“Dozens of Markets of Millions”to
“Millions of Markets of Dozens”
Moving from
“Dozens of Markets of Millions”to
“Millions of Markets of Dozens”
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Up to 80% of the Growth from Markets that are not Core Today
7.7X growth to $300B plus Industry
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Peep into the Future - Year 2020
A Dramatically Altered Landscape
Source : NASSCOM (Perspective 2020)
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Untapped Market Segments will drive 80% Incremental Growth by 2020
SMB’s represent a “Blue Ocean” for Indian IT & BPO companies
Source : NASSCOM (Perspective 2020)
* BFSI, telecom, retail, pharma, manufacturing, travel
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Blue Ocean
$ p
er
co
ntr
act
Fortune 500 Large
Enterprises
Small & Medium Enterprises
A B C
Red Ocean
“Blue Ocean”
Segments
Needs � Price
� Quality
� Well established players with good multi-country “show & tell” story & deep financial pockets
� Brand/ Reputation/ BOB-critical
� More likely to focus on TCO (right pricing ‘vs’ cost saving)� Look for trustworthy partner - prefer references as a common method of selection� Partner Flexibility is well appreciated - shy away from big players due to perceived lack of flexibility � The segment is amenable to adapting to platform based services�‘ C’ level is involved in most of the decisions – leads to shorter sales cycles� Need more focus on Biz values & not necessary that services should be driven by “state-of-the-art” technology� End to end solution is critical
• 51% of Workforce in US in
SME segment
• Larger manual content,
Less Automation
* US Census Report
Uncontested market
Strategy
Beyond the Existing
Workforce
Seg A
& BC
Workforce
Seg A
& BC
*
•Milestone Group LLC 2004•Blue Ocean Strategy
1,000
Blue Ocean Strategy ©
Kim & Mauborgne 2006
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“Beyond the existing”
Christensen’s model of Disruptive innovation
Product 1
Product 2
Product 3
Product 4
Performance
Time
NON CONSUMERS
CURRENT CONSUMERS
• What are we going to sell?• Who are we gong to sell to?• How are we going to sell - approach to Market ?
New Market Disruptive Innovation
Sustaining Strategy– bring better product into an established market
Low End – Disruptive Innovation
- Address overservedcustomers with a lower cost
business modelMinimum expectation level
• Differentiating Factors• SME segment• Platform based decisions• Leveraged buying acquisitions• Building BPO around core competencies• Direct to Customers (TSG)
• Differentiating Factors• SME segment• Platform based decisions• Leveraged buying acquisitions• Building BPO around core competencies• Direct to Customers (TSG)
Constrain
ts-
�W
ealth
�Skill
s
�Technolo
gy
�Access
�Tim
e
Low End –Disruptive Innovation
-Address over servedcustomers with a lower cost
business model
Beyond the existing ©
Quatrro SM
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What a SME wants
• Brands are least important factor for SME’s
• Big brands connote higher TCO• Young companies can collaborate
with large enterprises to jointly market to SME’s
• Viable and Stable solutions• Easily implemented• Require little support as they lack IT skills
& resources• Focus on SME IT buying priorities• Don’t provide customized solutions
• SME’s put lot of emphasis on TCO, not only on price. They will go for lower TCO’s
• TCO includes resources required to implement and maintain a solution, customer and technical support, unanticipated upgrade costs to maintain compatibility with new development, up and down scalability, and the cost of managing new vendor relationships.
• Easy to deploy integrated solutions• SME’s cant do integration
themselves• Easy to understand, deploy, manage
and support
• SME’s are focused on business value
• E.g. improved productivity, enhanced CRM, enhanced revenue, payback
• No technology marketing jargon
• SME’s would like to go with trusted long time vendors
• Cost of establishing a new vendor is high for a SME
• Focus on channels that sell to SME’s
Source : MileStone Group
SME private sector enterprises in the United States represent over 99% of US firms and employ 51% of the total workforce. SME private sector enterprises in the United States represent over 99% of US firms and employ 51% of the total workforce.
SME’s represent an underserved market for Technology and BPO companies. SME’s represent an underserved market for Technology and BPO companies.
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Costs
Buyer Value
Value
Innovation
Create uncontested market space
Make competition irrelevant.
Capture new demand
Align processes in pursuit of
differentiation and low cost
What Service Providers can do –Value Innovation
_____________________
Source: Blue Ocean Strategy.
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Quatrro Team - Shaping the Business Processing Industry for 18 yrs
Complexity – Added Value
� Q team pioneered real
time processing and voice
� The team established
India’s largest multi
process captive unit
� Scaled beyond F&A
� Q team pioneered 3rd
Party operations
� Multi faceted services
� Acquired by Wipro in
July 2002
� Quatrro endeavors to
provide clients with
innovative solutions at
optimal costs through a
combination of tools,
platforms and business
processes
(1992-1996)
(1996-2000)
(2000-2005)
(2005 and beyond)
Recognized as “The Pioneers of the Indian BPO Industry” – Created over 35,000 new jobs
Indian BPO industry was in its
nascent stage (only sign of
BPO in India was data entry)
Formerly GECIS
India established as the premier
global offshoring destination for
call center and BPO
S P E C T R A M I N D
Started and led Spectramind
into India’s largest third party
BPO company
Targeting uncontested service
spaces and pioneering new
service lines
� Q team pioneered off-
shoring to India
� The team established
India’s first captive unit
for Finance/Accounting
Pioneering Business Processing Services
BUSINESS TRANSFORMATION
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Next-Generation Services required from Indian Companies
� This space is cluttered
� Margins are squeezed –purely a volume game
� Less customer stickiness
� Limited growth opportunities
Platform based
solutions
Expert Knowledge Services
1
6
4
3
2
5
1
6
4
3
2
5
Data Entry
Rule Set Processing
Call Centers
� Better margins
� Less competition
� Value to customersbeyond cost arbitrage
� Higher skill set makes a more engaged workforce
Decision Making / Problem Solving
Quatrro Foc
us
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Executing Our Strategy
A unique and differentiated BPO built over the last 36 months that services SME clients
Build
Acquire
Align
Uncontested
New Business
Models
New
Geographies
New
Markets
New Service
Lines
Risk ManagementInteractive
Entertainment
Information
ServicesLegal
Technology SolutionsFinance &
Accounting Mortgage Services
Singapore, Sri Lanka,
China, UK, U.S., Canada
Small & Medium
Businesses
B to C – Business
to Consumer
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Team Quatrro: Multi location - Multi cultural
Board of Directors
Raman RoyChairman & Managing Director
� 18+ years in the BPO Industry
� Pioneered Remote Processing in India
� Created 3 of the largest BPO’s in India
� Transitioned over 500 processes to India & created over 35,000 BPO jobs
Business Lines
Risk Management Finance & Accounting
Hari BaskaranPresident, Quatrro Risk
Management
17+ yrs Experience
Citi Group…
S VamanCEO, Quatrro Risk
Management
26+ yrs Experience
Amex, Citi Group…
Suresh SubramanianPresident and Director, Finance & Accounting
25+ yrs Experience
E&Y, KPMG…
Glen Ofenloch CFO,
Finance & Accounting
22+ yrs Experience
RSM McGladrey,
The Balcor Company…
V BalakrishnanPresident & Chief Executive,
Strategic Business Development
25+ yrs Experience
GE, Larsen & Tubro, Wipro…
Raja SVEVP and Chief,
Human Resources Officer
25+ yrs Experience
Amex, Tata, Wipro…
Sunil RawalEVP and Chief Quality, Risk and
Compliance Officer
25+ yrs Experience
GE, Wipro…
Sunil GujralEVP and Chief Technology Officer
20+ yrs Experience
Amex, Wipro…
Rakesh SharmaEVP, Infrastructure
Services
21+ yrs Experience
Oracle, Wipro…
Ed QuinteroEVP, Business
Development
25+ yrs Experience
Anderson, Wipro…
Srinivas PingaliEVP, New Product Development
17+ yrs Experience
Accenture, Wipro, Tata…
Mortgage Services
Gary BettinNon Executive Chairman,
Quatrro Mortgage Inc.
25+ yrs Experience Bank
of America
Shyam SundarCOO Quatrro Mortgage
Solutions
22+ yrs Experience
Motorola, GE, Equinox
Corporate Functions
Interactive Entertainment Legal Solutions Technical Solutions
Richard Leinfellner CEO, Babel Media
25+ yrs Experience
EA among others
Srinivas PingaliCEO, Technical Solutions
17+ yrs Experience
Accenture, Wipro, Tata…
Navdeep RajendraHead of Operations,
Quatrro Legal Solutions
20+ yrs Experience
TCS, American Express
Business Support Services
Sanjeeva FernandoPresident, Business Support
Services
20+ yrs Experience
John Keells Group…
Knowledge Services
R. SivadasManaging Director,
Scope eknowledge
24+ yrs Experience
Escorts, UB
Chandu NairDirector & President,
Scope eknowledge
24+ yrs Experience
Businessworld, Asian
PaintsVijayalakshmi RaoDirector & COO, Scope
eknowledge
23+ yrs Experience
TI Cycles, SAIL…
Daniel R. MintzFounding Managing Director, Olympus Capital
Holdings Asia
� 20+ years of private equity and mergers and acquisitions experience
� Worked with Morgan Stanley Capital Partners ("MSCP") and Morgan Stanley's Mergers and Acquisitions Department
Raj Dutta
Executive Director
� 23+ years of experience in handling diverse areas in Finance and General Management
� Worked with GE, WIPRO, HCL…
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"As CEO of a consumer software company, in a very crowded space, I'm continually challenged to find new ways to bring value to
consumers. Quatrro has been responsive to our needs and is now our leading strategic partner. In short, Quatrro has been a game-
changer for CyberDefender“ – CEO, CyberDefender
“We were very pleased with the quality of your work and by your respect of the deadlines. We will not hesitate to use your services again
and we will also recommend you to our portfolio companies which from time to time require help in strengthening their IP portfolio”
– Partner, Emerald Technology Ventures
We help our clients improve Internal Productivity and Bottom Line Profitability
Risk & Fraud Management Finance & Accounting Mortgage Processing Services
Legal Support Services Knowledge Services Interactive Entertainment
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The ingredients are there….
……It is up to us to Leverage!!!!!!!
The Potential is HUGE
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