Interview With Srikanth Velamakanni: CEO Fractal Analytics
08 Dec 2007 | Print
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Fractal is a leading provider of advanced analytics services with more than 40 clients in 15 countries. The company helps retail financial; banking and telecommunication institutions take data based decisions that enhance the effectiveness of their marketing and risk management programs. Every year Fractal builds over 200 customer behavior models that get implemented at businesses across the world. Fractal works with 5 out of the 10 largest banks in Asia and with 3 of the largest Credit card issuers in India and has a global presence with offices in New York, Singapore and Mumbai and a client presence in USA, Japan, Singapore, India, South Korea, Taiwan, Malaysia, Indonesia and Thailand.
Srikanth Velamakanni, an MBA from Indian Institute of Management (IIM), Ahmedabad and a BS in Electrical Engineering from the Indian Institute of Technology (IIT), Delhi is the young CEO and Co Founder of Fractal Analytics. He has led several assignments for Fractal Analytics assisting leading banks in carrying out their Retention Programs and Cross Sell Programs. Thinkingstreet got an opportunity to talk to Srikanth on Fractal Analytics is specific and his view on analytics industry is general. Here is the excerpt of our discussions.
ThinkingStreet: Business Analytics is increasingly becoming integral to marketing strategy especially for industries like banking, finance, retail, telecom etc. What is the future of business analytics and what are the upcoming sectors that are taking to analytics?
Srikanth: Management is moving from Art to Science. Organizations today are relying on data-led decisioning to scale-up and build competitive advantage. Use of analytics is seen as one of the key differentiators to compete in the fierce marketplace today and get the maximum return out of every marketing rupee spent.
Financial Services firms have been the first one off the block. It has been partly because of “risk management” being a critical function and analytics is the answer to that. But, they are also now using Analytics to identify their best customers, most profitable customers, most responsive customers, so on and so forth.
Now, Telecom companies are now getting into use of Analytics. Retail sector is still in the process of growing square footage in India and managing that process. Though there are few retailers with foresight to include the use of analytics as part of their business model itself.
ThinkingStreet: The major prerequisite for superior analysis is quality data. Considering a market like India where most of the transactions are cash in nature and adoption of concepts like credit cards, loyalty cards etc. is still in infancy; do you think we are covering just a small part of the story. How can analytics help in predicting the consumer behavior that is still out of the data loop?
Srikanth: Data build-up within a business goes through phases. There are three key drivers helping analytics today - businesses are now becoming more aware about the analytical power. Customer transactions are moving in data-friendly manner (e.g. transactions are moving to credit cards) and advancement in data warehousing technologies
One common myth within businesses is that “We cannot do analytics, as we do not have data”. Our experience is that businesses typically have huge data, but they are not in clean shape. Example - customer data or transaction data. Firms like ours are experts in managing dirty data. We convert seemingly unusable data to structured, analyzable shape by using advanced analytics.
ThinkingStreet: On the outsourcing front; analytics is a high end service for the global customer. What is Fractal’s experience with their international clients; especially in terms of acceptability of services provided from India?
Srikanth: Analytics is a mature industry especially in US. Clients are far more clear about what they are looking for. This makes it far more amenable to outsourcing. We have many Fortune 100 clients that are outsourcing analytics in a big way.
Another key driver for outsourcing analytics to India is the presence of mathematical talent in our country. Indians are far more quantitative friendly and is an ideal location to base Analytical engines for top organizations globally.
About Fractal
- Fractal works with more than 40 clients in 15 countries
- Every year Fractal builds over 200 customer behavior models that get implemented at businesses across the world
- Fractal works with 5 out of the 10 largest banks in Asia
- Fractal works with 3 of the largest Credit card issuers in India
- Fractal has grown at over 100% per annum for the last 2 years
- Fractal has consistently provided at least 20% reduction in delivery timelines through the usage of our data models, tools and processes
- Pioneered the development of Debit Scorecards, which is a scoring product for customers without adequate credit history
- Fractal has a global presence with offices in New York, Singapore and Mumbai
- Fractal has client presence in USA, Japan, Singapore, India, South Korea, Taiwan, Malaysia, Indonesia, Thailand, UAE
ThinkingStreet: To provide valuable insights to the client any team will need deep domain experience. In catering to international clients, do you see this requirement as a constraint for Fractal; especially for the industry where developed markets work in a very different way than India, when it comes to Analytics?
Srikanth: Domain expertise is critical for solving the kind of problems that we face. Fractal has been working in this area for more than 7 years now. We have a robust mechanism of synthesizing all our learning from hundreds of projects that we have executed in Financial Services, Retail, Telecom & CPG domains. We have our proprietary “Country specific data models” that help us in pulling together all our learning for solving that business problem in that country.
Organizations are becoming global today. The fact that we are working for banks in Asia, US & India actually helps us in transferring learning from one region to another.
ThinkingStreet: From the global sourcing perspective, in analytics, what kind of work can be easily off-shored and which ones are the most challenging?
Srikanth: Analytics straddle across Data Management, MIS reporting, predictive models development, through Business Consulting.
Generally, except for pure Business Consulting, we have been successfully executing analytical projects across the spectrum for our clients.
ThinkingStreet: How are the billing rates and margins in your industry, say in comparison to other outsourcing industry like IT services or equity research?
Srikanth: Analytics is considered a specialized service and is not commoditized as much say IT services. Specialized analytics consulting can command very good rates.
ThinkingStreet: What are the challenges your industry is facing; especially in global sourcing context?
Srikanth: Some of the challenges we face are the outsourcing mindset within US businesses and the talent shortage in the country.
ThinkingStreet: With Cognizant paying 135mn USD for MarketRx which is in a similar space as yours, how does the industry’s future look to you?
Srikanth: Very bright!
ThinkingStreet: What are Fractal Analytics business growth plans?
Srikanth: We have very aggressive plans to consolidate our strong position. We have opened two new delivery centers in India - one in Delhi, one in Kolkata. Our business plans is to grow more than 100% for next 2 years.
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Fractal is a leading provider of advanced analytics services with more than 40 clients in 15 countries. The company helps retail financial; banking and telecommunication institutions take data based decisions that enhance the effectiveness of their marketing and risk management programs.
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Sandeep Kaujalgi
Great to hear that Fractal Analytics has opened two more delivery centers! Seems like the company is expanding at a rapid pace and is a firm to watch out for in the coming year!
I have also heard that the company is fast becoming a preferred vendor for outsourced analytics services!
One of my colleagues recently joined Fractal Analytics and she is quite impressed with the company’s work culture and the challenging assignments she is getting to work on! It seems at Fractal, you get exposure to a wide variety of analytics assignments and thats a great thing to be able to add a diverse and enriching set of skill sets to your profile…Yeah I heard about the two new delivery centers in Delhi and Kolkata too..it seems Fractal is quite employee friendly and has invested in offices across cities to make it easier for people from other cities to be able to work with Fractal!
I think Fractal is the place to be in if you want to be a pro in analytics and going by the company’s aggressive growth plans, its going to be quite exciting out there!
The indeed offshore industry is going high end. And there is little choice but to do so. The industry is getting hit at both ends with the dollar falling rapidly and salaries in India rising at 15% per annum only those companies that can move into the high end will find it profitable to be in this business. WHen it comes to high end services cost ceases to be the major driver and talent availability becomes a much bigger factor. Already the salaries in the Indian analytics industry at the top end are reaching 50-60% of US salaries.
Analytics is one such example. It is great to see companies such as Fractal Analytics (www.fractalanalytics.com), MarketRx (www.marketrx.com) etc taking that direction.
The question is will any of these companies become global giants on their own or will all of them get acquired before they move into $50-100 million revenue category.
Hi its so encouraging to learn that we (Indians)are the solution end for such an high end soluitions.
Kindly can anyone of you update me on the market sixe OR potential business for this industry in global scale and that for India as well.
Hi All,
In my earlier comment i meant that i’m looking for market sixe for predictive analytics in India & on global level.
Are there any good sources of information like whitepaper, articles to learn more abt Analytics
I’m very happy to learn that Indians are at the solution end for such high end models OR solutions
Thanks to our mathematical culture and Statistical approach
Great to hear that these high end solutions are provided by an Indian Company. Since years, Indians like Ayrabhatta are making names in using mathematical and statistical tools and methods for business decisioning and I strongly feel (after visiting your website) that Fractal would emerge as one of the fastest growing Company in APac region. Wish Fractal all the best.
Outgoing co-founders want Fractal stake
28 Nov, 2007, 0257 hrs IST,Ritwik Donde, TNN
MUMBAI: In an ironic twist to the dispute among the founders of Mumbai-based Fractal Analytics, the outgoing co-founders now want to buy out the stakes held by existing promoters. RK Reddy and Pradeep Suryanarayan, who quit the company in June and got offers for their stakes from their former partners, say they will remain shareholders and in fact, want to bring about changes to its management.
Last week, the Bombay High Court declined a stay on the duo’s freedom to pursue careers with Fractal’s competitors. Speaking on behalf of the two former co-founders, Mr Reddy told ET they want to rope in a private investor and make an offer to their three former partners as well as angel investor Gulu Mirchandani of MIRC Electronics. “The company has not been running as per our expectations and now after the high court verdict we would be looking to set the house in order,” Reddy said.
Srikanth Velamakanni, the company’s CEO, and co-founders Pranay Agarwal and Nirmal Palaparthi had begun legal proceedings against Mr Reddy and Mr Suryanarayan on charges of breaching non-compete agreements with the company. They had also offered to buy the stakes of Mr Reddy and Mr Suryanarayan in Fractal Analytics.
With the court order leaving their professional relationship with Mumbai-based outsourcing company Adventity untouched for now, Mr Reddy said both of them would nevertheless retain their shareholding in Fractal. Among the options they are evaluating is to bring in new members on the company’s board of directors using the rights they have as shareholders of the company.
When contacted, Mr Velamakanni declined to comment on the issue. He also did not answer queries on whether some more employees have left the company. Meanwhile, Mr Mirchandani was unreachable despite repeated attempts by ET to contact him. Mr Reddy and Mr Suryanarayan had moved out of Fractal a while back and had begun to offer consultancy services to Adventity. Currently, nearly 50% of the company is owned by individual investors of which Mr Mirchandani is the largest investor; another 40% rests with the five founding partners while the remaining 10% is with the employees of the company.
Fractal Analytics was started by five IIM-A graduates to tap opportunities in the area of business analytics and not many had thought that the company would go in for a split within six years from inception. The company has some of the biggest banks in India and Asia as clients, including ICICI Bank, HDFC Bank, UTI Bank, Korean Exchange Bank, USJ in Japan and OCBC in Singapore.