Analyse This

Analyse This

Rajesh Varrier, CEO, Active Cubes

How does a company find out if there is a correlation between its marketing spends and its sales? Are its promotions working or not? Is the sales for a particular period linked to the advertising spends in that same period? And how does an organisation comprehend such abstruse data? This is where Activecubes Solutions India Pvt. Ltd. (Activecubes) steps in – an analytics services firm that leverages technology to transform data into business intelligence that helps strategise processes better. From helping a beverage company boost its market share and increasing the win ratio for a leading rugby team to determining the most effective marketing approach for a pharmaceutical company and developing a strategy for a lifestyle beauty clinic to retain its customers, Activecubes has helped solve a number of dilemmas.

 “The Indian market has greatly matured since the time we started. More companies are aware of the need for analytics now so it is a good time to be in this sector.”

“We focus on three verticals currently: pharmaceuticals, financial services and manufacturing because of the tremendous potential each has as they have relied on analytics for many years,” says Rajesh Varrier (42), chief-executive officer of the Bengaluru-based firm. Initiated in January 2007, Activecubes consists of six other founders besides Varrier including Prabhu K. Gutta (director), Kiran Ventrapragada and Anand Sam (heads of manufacturing), Ajay Pulpa and K.Ramachandran (heads of pharmaceuticals), and Anand GCP (head – financial services). “Though our focus markets have largely been the U.S. (biggest contributor) and Australia, we are targeting Indian companies this fiscal,” says Varrier while adding, “The Indian market has greatly matured since the time we started. More companies are aware of the need for analytics now so it is a good time to be in this sector.”

From being bootstrapped in its initial phase, Activecubes has matured to receive outside capital, 18 months ago. At the moment, it is sufficiently funded and is not on the lookout for further capital. It is now profitable and achieved a revenue growth rate of 70 per cent to 80 per cent last fiscal. In 2008, Activecubes was among the five companies that went onto win the Tata Nen Hottest Startups Award and was also adjudged as a star performer among emerging STPI (Software Technology Parks of India) incubated companies in Karnataka. “From being a relatively unknown company, the awards helped the corporate community identify us,” affirms Varrier.

The right solution

According to Varrier, where Activecubes differentiates itself from its competition is in the space it operates in. “We are among the few firms that deal with analytics and its related technology. By understanding a business problem, putting together a data warehouse which houses the requisite data, then combining it with analytics, we are able to yield the required insights from the data,” says Varrier.  Accessing this data is not hard once the intellectual property (IP)/ non-disclosure agreements are in place. By engaging data with business intelligence–technology and mathematical analysis, Activecubes’ services are from end-to-end. “For instance, we look at a business problem and its drivers. Then, we analyse the data requirements to solve this problem. If all the required data is not available in a central repository, we build our client a data warehouse and get all the required data into it. We then apply statistical techniques to the data and compute the results, which for example could be showing us a trend or an insight such as which of our client’s customers are the most valuable,” he explains.

Snap Shot

Activecubes
CEO: Rajesh Varrier
Year: 2007
Industry: Analytics services company
Business Model: Leveraging technology to yield data insight
Target: 50 – 60 per cent growth every year

Taking the plunge

It is the evolution of business intelligence as a space and the importance of data to help companies strategise that had Varrier keen to make his mark in the field. This is not his first tryst as an entrepreneur. After completing his post graduation in computer engineering from Mumbai University in 1992, Varrier and his friends tried their hands in starting a software company but he admits it was not a planned exercise and it failed to gain stronghold. “I always wanted to be an entrepreneur and realised this is a great space,” he says. When Varrier quit his job at Infosys in 2006, he was the global head for its human capital management services. When he was questioned by Nandan Nilekani, founder-member of Infosys, on his reason to start a company, Varrier stated, “Because of people like you.” “Infosys was a great learning experience. It sets the framework for anyone aspiring to be an entrepreneur,” he says. Second time around, Varrier relied on his years of experience working in the ERP (enterprise resource planning) domain and observing globally-run businesses and its best practices.

He reached out to his network of friends and the first to come onboard was Kiran Ventrapragada. Within the next eight months, the remaining founders completed the team. Activecubes was incubated at STPI for the first nine months. “The incubation was a great support as it provided scalable infrastructure and resources.” In the third month, the company bagged its first client in Australia. Initially, the company relied on its founders’ network to do business. “Getting the right sales team on ground was our biggest challenge. Though we spent an adequate amount on hiring talent from the best organisations, we realised that many found it difficult to sell an unknown small firm. So, in our next round of hiring, we hired those who worked in small firms and did well,” he says, while adding, “Currently, we hire a mix of fresh and experienced employees with a focus on a particular industry rather than geographical markets.” Now, with 70 people on Activecubes’ workforce, Varrier says the quality of work and the learning environment keeps attrition at bay.

Innovation is key

The company suffered a setback when the global recession of 2008 impacted it adversely. “In India, business is more trust-driven while in international markets it is more process-driven. It takes us anywhere between three to six months to make a deal and build relationships. During the recession period, many of whom we built a rapport with lost their jobs. It was a wake-up call as it taught us how to manage our cash inflows better and cut costs. More importantly, we realised the only way we could sustain business is through constant innovation – to provide a great idea for our clients to latch onto,” says Varrier.

Though the company has done a little marketing by engaging analysts and public relations agencies, Varrier believes it is still two years away from concentrating on a branding exercise. He says, “At the moment, we would rather spend on building a strong sales team. Our challenge now is to achieve a growth rate of 50 per cent– 60 per cent every year and to acquire newer clients.” Varrier adds that opportunities in other sectors like telecommunication are present, but the company first hopes to consolidate its existing verticals before venturing into others.

But where does he see the future of analytics head? “In India, internal capabilities for analytics in companies are few and far at the moment. There is definitely more awareness now that data needs to be harvested. It is a data-driven age, especially with the advent of social media. More companies will soon realise they need to engage that data to beat their competitors,” he concludes.