Last month, Nasdaq-listed EXL, a leading operations management and analytics company, acquired IQR Consulting, a US-based provider of marketing and risk analytics solutions for the banking industry. Prior to that, EXL announced the acquisition of Liss Systems, a leader in the digital
insurance market in the UK and Europe. A combination of deep domain knowledge, strong delivery capabilities, and investments in
technology offerings is helping EXL achieve significant market success, says Rohit Kapoor, who co-founded EXL in April 1999 and has served as its vice-chairman and CEO since April 2012. EXL today serves the insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics industries. “It’s important to become a specialist in certain industries and that’s how you add value to your customer,” he tells Sudhir Chowdhary in a recent interaction. Excerpts:
EXL was one of the first companies to be listed on Nasdaq ten years back. Tell us about your journey.
Well, it has been a pretty exciting journey. We have been in business for 17 years, 10 years as a public company, but I think we have always stayed true to our original hypothesis, that is, doing domain-centric work. You need to become a specialist in certain industries and domains and that’s how you add value to your customer. We have done that precisely. We have stayed focused on five industry verticals and become a specialist in these. These are insurance, banking, health care, travel and transportation and utilities.
When we went public in 2006, I think our revenue was $75 million; for 2016 we expect to have a revenue of $691-700 million. I think the kind of work that we do has also evolved over a period of time. In the past, we used to do a large part of the transaction process (what we call operation management) work. Today, a large part of our work is in analytics and it is on platform-based services. Analytics accounts for 23% of our revenues, and platform based services, where we use our own proprietary technology platforms, is about 17%. So, 40% of our revenues is from non-traditional business process outsourcing.
What are the new developments in operations management and analytics?
Operations management has changed quite rapidly. First, there is a lot more of automation and technology that is being used in operations management. There is the introduction of robotics, platforms as well as business process automation, and work flow management tools. There is a whole set of technological advanced tools that you need to embed with operations technology.
Second, there is the integration of analytics and operations management. Today, when we do processing of work, we apply intelligence along with the processing of work that we do. The intelligence is in the form of analytics. We have a proprietary framework which we call business EXLerator framework. This framework takes strong process management capability and integrates it with technology and analytics. That is our model today.
There is a lot of talk about digitisation in India. How can EXL help companies to transform
into the digital era?
Let’s look at a retail company. The other day I was with a CEO who is keen to digitally transform his company. In the past, they would sell to whoever came to buy. They had no records on who these customers are, what their buying preferences are, or what type of products they want. Now they have built up a customer information management system that can track 400,000 customers they sell to. They can automatically match the product, the customer as they have all that information in digital format.
They are now trying to improve the customer experience so that they are able to provide proactive offers. For instance, telling the customer: “Last time you brought that, so are you interested in buying this? By the way, we have a new feature on this product, so would you be interested in buying?” The customer feels that this company knows what my requirements are and therefore, customer experience goes up. The second thing they are working on is that they are trying to enable e-commerce.
For the first one we actually help them in managing their back-end process to digitally map to the front line. And on the e-commerce side we are helping them out in analytics. On one hand our role is to use analytics to improve their revenue and on the other, our role is to help them digitally transform their back-end processes.
Would you name some clients whom you have helped in this journey?
There are multiple clients whom we have helped in this journey. There are customers in the insurance industry. We just bought a company called LISS Systems and they have a digital platform on the front end to enable the buying and selling of insurance policy. In healthcare, we work with a number of players. In transportation and travel and logistics, we work with companies such as American Express.
How are you able to get the right talent to pursue these
We have always chosen to be very domain focused and that is what makes us unique. As we are domain focused, we can do sufficient work because we understand our clients’ business a lot better. We help them in terms of designing new processes, new products and capabilities which they otherwise might not do.
In terms of talent, we have been able to attract great talent because everybody wants to come in and do work where they can enhance their value themselves as well as provide incremental value to the clients and do some exciting work.
What are the initiatives that EXL is putting in place to gain customer traction?
Our focus is to gain customer traction in two ways. One is to increase the amount of work that we do with the existing clients. Even today, with our most matured client relationship, the penetration of work is not more than 25%. That means there is 75% head room to grow with them. Second, we are going after new clients in a named account strategy form. For this, we do an industry analysis and figure out who are the top clients in this particular industry and where our capability is best suited. We then identify which are the ones we want as our clients and then go after them with a very targeted approach.
What are the key challenges your clients are facing in the near future? Any solution from your end to help them out?
Two big challenges that our clients face today are growing their revenues and reducing their cost. In terms of reducing their cost, we can actually help them more by outsourcing their work to us because we can drop down the cost of their operations by 50%. That makes them a lot more competitive and their work more effective.
Helping them to grow their revenues is actually even more important than reducing their cost Increasing revenues is difficult when the economies of the countries where we serve our clients such as the US or European nations themselves are not growing. In those markets they have to either introduce new products or take away market share from competitors. The best way of helping them do that is through analytics. We use a lot of analytics to help our clients increase their revenue, increase customer satisfaction and that helps them grow their revenues.