Mu Sigma, today, is arguably the world’s largest pure play analytics services company. “Our goal over the next two years is to remove the need to say ‘arguably’,” says Dhiraj Rajaram, founder and chief executive (CEO) of Mu Sigma. Founded in Chicago, Illinois, in 2004, Mu Sigma has seen tremendous growth over the last six years. They work with senior and middle management teams at the world’s leading corporations, helping them come up with answers to complex business problems through the use of data analysis.

Currently, they work with the who’s who of the business world including firms like Microsoft, Dell and Walgreens, among others. Mu Sigma’s revenues are robust, touching between U.S. $40 million and U.S. $50 million this fiscal. It is a result of the passion and dedication shown towards solving a client’s problem at Mu Sigma.

Going all out

Prior to founding Mu Sigma, Rajaram worked as a strategy consultant at Booz Allen Hamilton and PricewaterhouseCoopers, advising senior executives on solving business problems. This was when Rajaram realised that there ought to be a better way to find solutions.

While strategy consulting firms focused on business consulting, information technology companies brought in technology to improve business efficiency. Rajaram knew that if he could add an additional layer to this whole process – combining the benefits of applied math, technology and business – there was a whole new industry waiting to be tapped.

In the early stages, Rajaram says he worked hard, spending over 20 hours a day, researching the market opportunity. He was so convinced; he quit his job, sold his Chicago home and invested his life savings in establishing Mu Sigma.

Mu Sigma’s clients recognised that they were solving a well-known pain point. Using applied math to analyse data had not been done on a large scale; additionally, the ability to recognise patterns and business trends seemed very useful to decision makers. Whether it was predictive modeling to understand useful features in a new product or enhancing customer experience through better loyalty programme management, applied math combined with business insights proved extremely useful to clients. Says Rajaram about the early sales pitches, “We actually thought through every prospective question we would have to answer in our sales pitches.” It is this level of planning and attention to detail, that Mu Sigma still applies to all its client engagements.

Growth phase

Over the last six years, Mu Sigma has expanded to a team of over 814 people. A large number of them hold degrees in applied mathematics, business and engineering and are trained to become experts in data analysis.

Mu Sigma operates like any other outsourcing firm. The onsite-offsite model is part and parcel of their delivery process. “It is also important to work collaboratively with our clients, to ensure our analysis is consumed well, within our client’s organisation,” adds Rajaram. While, the Indian delivery centre does add to the cost-benefits, the fact that talented mathematicians, business and engineering majors are available in India also plays a major role.

In October 2008, Mu Sigma raised U.S. $30 million in venture capital funding from San-Francisco-based FTVentures. This was primarily used to expand its service offerings and increase head count. Mu Sigma has scaled up its expertise to cover different verticals including retail, financial service, media and telecommunications, insurance and pharmaceuticals, among other sectors. Rajaram has also created a training programme titled ‘Mu Sigma University’ to continuously train new employees and make them client-ready.

When asked if Mu Sigma gradually planned to move into the management consulting space, Rajaram says, “The direct answer is no. Typically in all our client engagements, we start off by doing accurate work, then as we become more reliable move on to become trusted partners and then finally become trusted advisors to our clients. The DNA of our company will always remain as a decision sciences company.”

Industry creation

Rajaram believes that the business of formulating a more efficient method for problem solving is opening up a whole new industry.

“We are not just building a company, we are actually building this whole industry. We have to take concepts from other areas such as psychology to take decision sciences to a different orbit. That is what a leadership position means to us. It is not just about being the most profitable company with the largest revenue; it means the ability to command respect through our thinking, our execution and our ability to influence the rest of the industry,” he explains.