The 2003 start-up is one of the firms on which the Ross School of Business of the University of Michigan has done a case study for use in classroom discussions by its MBA students. Analytics is at the highest end of BPO services and is a part of expert knowledge services.
It consists of cleaning up mountains of data which firms in the digital age come to possess, putting them in usable format, identifying patterns in them by fitting statistical models, coming up with marketing insights for the client and finally identifying actions which help increase clients' marketing effectiveness.
The study finds that Marketics has been able to build a strong marketing analytics business by both leveraging the high quality of manpower available in India and innovating in process delivery.
The key innovation has been to break up the work. Domain experts work with clients to understand what they need, statisticians create models with the data available and then service operations teams run the models with clients so that they can devise an action agenda from the whole exercise.
S Ramakrishnan, CEO, Marketics, says they had two insights: analytics is a global business that requires global hiring and "a lot of analytics can be put on an assembly line by understanding the process well, distilling the separate functions and then disaggregating them. We have de-skilled and democratised analytics."
By breaking up the total task in this manner, Marketics can find the skills needed much more easily than otherwise would be possible and at a lower cost.
This breaking up and distributing the work, keeping costs low while delivering quality, is a mirror of the innovation that leading Indian software firms have achieved through their global distributed delivery model.
Marketics currently employs 180 people in three locations, the bulk of them in Bangalore, around 30 in Coimbatore and 10 in the US. Customer facing work is done out of the US, whereas pure analytics work is done out of Coimbatore, a low cost location.
The firm employs mostly MBAs and analytics experts with PhDs and masters in statistics. The median salary among the young MBAs is Rs 10 lakh per year and the rest Rs 4-5 lakh per year.
The firm clocked a turnover of $4 million in 2005-06, has been profitable and zero debt from day one and currently maintains an EBITDA of over 30 per cent.
"We will more than double our turnover every year and our margins are getting better with time as we build up scale," Ramakrishnan adds.
What is most striking is the clientele of the firm. Not only are they from Fortune 500, in many domains they are among the global top five and in a few cases the top no.1 or no.2.
Among its clients are global leaders in consumer packaged goods (what's called FMCG in India), non-alcoholic beverages, travel, auto insurance, entertainment and knowledge. The founders of Marketics have earlier worked with such leading global firms like GE, Compaq and P&G.
