Scale to Survive

November 2, 2009 by Perry Manross

Power

Dusty roads baked in the kiln of a Delhi drought crisscross the suburb of Noida. On them, rickshaws vie with Audis for the path of least resistance to their different destinations. Fortunately, relief is in sight: Workers are extending the Delhi Metro to connect Noida with the city center. In the last several years, Noida’s commercial growth has exploded, and the suburb’s infrastructure is racing to keep pace. Sandeep Ranjan, CEO of private market intelligence provider Prognosys, sees order coming to the recent surge in commercial and residential growth, a fitting backdrop to his company’s story.

Founded in 2004, Prognosys employs 250 analysts, project managers, account managers, and call center staff. With an emphasis on IT investment in India, Ranjan and his team provide intelligence to some of the most renowned players in the industry, including Dell, Microsoft, Adobe, Cisco, HP, IBM, Red Hat, and Wipro. “All of our services and products reflect our regional focus and local expertise,” Ranjan says. Prognosys has accumulated detailed intelligence on nearly 500,000 Indian firms. The insights gained can play an integral role in a client’s endeavors to penetrate the Indian market. For example, Ranjan attributes the expansion of one client’s market share in the Indian oil and gas sector from 18 % to 27 % to the intelligence his company provided.

Opportunities in full relief

Like its native home town of Noida, Prognosys has experienced explosive growth in the past few years. Business boomed by 300 % in 2007 and 2008. And like Noida, Prognosys needs to stay on top of its own rapid development. “Unfortunately, we were so preoccupied with the business we were getting that we lost sight of the business we weren’t getting,” Ranjan says. As a smaller, private market intelligence provider, Prognosys relies on the depth of its relationships with a select number of large clients. Often multinationals, these clients have several, if not dozens, of departments, whose decisions to invest in market intelligence are made independently of one another. “It is critical to the success of our organization that we know the distribution of the business we are receiving from these divisions and identify those divisions in whose market research activities we could be more closely involved,” Ranjan says.

As Ranjan explains, Prognosys needed a system that could track and analyze the profitability of each project, product mix, client engagement, and division engagement. “The end ideal is a focus on delivering our most profitable services and products to clients with whom our relationships are most profitable,” Ranjan says.

Ranjan cites a client Prognosys has worked with since 2004, one of the largest printer manufacturers in the world. It was not until the implementation of the SAP Business ByDesign solution in 2009 that Prognosys was able to systematically analyze white space among this client’s divisions. In the last three months, the amount of revenue that Prognosys has booked from the additional divisions is equal to what it received from the initial division over the past four years. In addition to providing more clarity into ist business, SAP Business ByDesign helps Prognosys keep better tabs on productivity. Project managers can track the duration of tasks and take corrective action if the duration deviates from expectations. This capability has reduced the number of delayed projects from one in five to isolated incidents.

Also, the integrated invoice tracking capabilities of SAP Business ByDesign have helped Prognosys reduce collection days from 24 to 7, improving the company’s cash flow. “This essentially gives us 15 days of working capital, which is a big, big surplus for an SME organization relying on sales to fund its operations,” Ranjan says.

Although these IT enhancements have been a boon compared to the disparate systems and spreadsheets Prognosys had relied on, Ranjan notes that SAP Business ByDesign does not yet provide the employee management and pettycash management capabilities his company needs. He is hoping for a greater scope of capabilities in feature pack 2.0. On the whole, Ranjan explains, the staff at Prognosys has embraced SAP Business ByDesign: “Our sales and marketing people are happy because they don’t have to maintain so many sales-call reports in spreadsheets that don’t ‘talk to each other.’ Our finance guys are happy because all purchasing activity can be controlled and tracked in one system. And I am very happy because I can get the information I need on my own at any time.”

IT the key to scale and survival

Not only is Prognosys’ business based on advising IT companies, but its very survival relies on IT. “I believe that the next generation of market research will not be evaluated on how effectively it has been performed, but rather on how efficiently it has been delivered,” Ranjan explains. To continue its growth, Prognosys will need to rely on scale – and the only way to scale effectively, he says, is with IT.

Ranjan argues that market research providers must move away from the analyst service model and place more emphasis on the combination of productized services delivered using IT solutions. For the past year, Prognosys has worked extensively on developing its next generation of productized services in the form of a Web-based delivery platform. Soon, clients will be able to log on and “slice and dice” Prognosys’s vast databases to help them plan their sales initiatives. What is more, this solution will enable customers to verify the authenticity of each bit of data, down to the actual survey conducted, how it was conducted, sample size, and so on.

SAP has supported Prognosys in these efforts, linking the company with a partner to integrate this portal with SAP Business ByDesign. According to Ranjan, this is another example of how “SAP works with us less as an applications vendor and more as a longterm technology advisor.” He hopes to have the portal up and running by 2010 – coincidentally, the same time the metro is scheduled to join the rickshaws and Audis for the morning commute.

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