Aatish Dedhia, CEO, Zycus a Bachelor of Technology (B.Tech) in Electrical Engineering from the Indian Institute of Technology, Mumbai, India and a Master of Science (MS) in Electrical Engineering from Cornell University, U.S. Prior to Zycus, Aatish enjoyed a flourishing career at Intel Corporation in the United States and was part of the core design team on the Pentium-II processor. At Intel, Aatish also introduced Internet and Intranet technologies within the Pentium-II group for improving group work and knowledge management. Aatish is a widely known professional in the IT industry and has been invited as a speaker at several international forums. Aatish Dedhia started Zycus in 1998 with a vision to leverage technology to solve business problems. Aatish harnessed the power of Artificial Intelligence technology for practical business purposes to create a powerful Zycus Spend Data Management framework. Under his dynamic leadership, Zycus has emerged as the industry leader in its business space. He has been responsible for the company’s success in the fiercely competitive international market. His astuteness and strategy has been the pillar of Zycus’ success.
Zycus continues to deliver on its heritage of providing best-in-class spend management solutions that are world renowned for delivering an accelerated return on investment through superior user adoption creating Maximized Savings. Zycus’ solutions, delivered as web-based services (SaaS), are built from the ground up combining cutting-edge technology and domain expertise, enabling higher performance and sustainable value to organizations worldwide. Zycus provides global spend management solutions to more than 170 leading Fortune 1000 customers that consider spend management software, processes and technology strategic to their competitive advantage. Zycus Spend Management solutions automate and streamline the processes of spend analysis, strategic sourcing and contract management. With more than 170 proven implementations globally, Zycus’ solutions are preferred by leading organizations worldwide. Zycus has more than 250 employees across North America, Europe and the Asia-Pacific region.
Replying to Anil Mascarenhas of IIFL, Aatish Dedhia of Zycus says “One reason for the sharp rise of spend management market is the phenomenal ROI it delivers.”
What is Spend Management all about. Give us a brief on how this industry has evolved.
The Spend Management market is growing at a fast pace with companies realizing the need for pro active spend management and more stream lined processes. Companies have partnered with Zycus for the high customer service levels and world class advanced technology solutions. Most of our customers have selected Zycus for the simplicity with which these solutions can be used. We believe the uniqueness lies in great user adoption facilitated by the solutions and the ease with which the transition to automation takes place across companies.
Spend Management sprung up around 1995 with changing outlook towards automating the processes. The market opened up to realize the huge gains out of using software based solutions. The market has few global players and a lot of local vendors catering to the regional customers. Spend Management Solutions include Spend Analysis, e-Sourcing and Contract Management, which completes the upstream of the procurement cycle. With more understanding and adoption of the automated solutions, the matured markets are looking forward to the downstream completion of the procurement cycle with e-Procurement and e-Invoicing.
In North America and Europe, we see spend management becoming mainstream. More and More organizations are adopting it. We see a clear trend of vendor consolidation. Lot of niche vendors over the years have either got acquired or gone out of business. Zycus has emerged as a leader with a list of marquee referencable customers, market leading and differentiated products and best-in-the-industry profitability and growth.
There is a clear trend of SaaS (Software as a Service) becoming the most preferred deployment option for Spend Management Solutions.
We also see a lot of companies in India going for spend management and strategic sourcing solution to create a positive impact on their bottom line.
What help or expertise do you offer in procurement? Often there are internal clashes and differences of opinion. Does this work as an advantage to provide a relatively neutral view?
Internal clashes typically arise due to one reason. People believe that they know the best in the category or commodity they manage. In fact, in most of the cases, they do know more about a particular item, category or market. The job of a consultant like Zycus is to augment their knowledge with best practices, processes, technology and new vendors to realize sustainable savings. In many cases, customers are pleasantly surprised when they get better discounts and terms from their existing vendors when they start using strategic sourcing services from Zycus.
Zycus puts a lot of emphasis on getting internal buy in on the entire process from all relevant stakeholders. It normally doesn’t take more than one sourcing event to turn every one into a believer.
Do you have a shortlist of partners with whom you associate. Do you take inputs from the client on the vendors they are comfortable working with?
Zycus works with a variety of partners, which include large global consulting and system integration firms, small boutique spend management consulting companies and IT resellers in specific geographies.
Zycus does not impose any suppliers on our clients. The entire supplier selection process is very objective and transparent. Client is involved in every step of the process and Zycus collaboratively chooses the supplier along with the customer.
Explain to us your business model. How is it different in India?
Zycus offers spend management software and services. Software is primarily sold as a SaaS offering and is available on yearly subscription. We see the need in India is a bit different with clients looking at a combination of software, best practices and content (supplier information, templates etc). We typically lead with strategic sourcing offering in India, where we take a chunk of our client’s spend, identify sourcing opportunities, run sourcing events and deliver hard savings to the customer. The big difference here is that in the entire process a lot of knowledge transfer happens in the form of best practices and process. This knowledge can be used by customers to run their own initiative in the future using spend management software.
What is the future for Spend Management? What is the payback time usually?
Since time immemorial, people buy goods and sell goods. Procurement is the base of Commerce and now more and more organizations realize the importance of technology in this space and how it can help them reduce cost and risk and improve their bottom line performance. One reason for this sharp rise of spend management market is the phenomenal ROI it delivers. In most cases, spend management can deliver a 10X ROI in as low as 6 months. In some cases, we have seen 20X ROI in a few weeks.
Brief us on your clients. Which are the verticals you cater to?
Zycus has customers across multiple verticals, geographies and sizes. While we cater to the breadth our core strength lies in Manufacturing, Pharma, Banking and Financial Services. We have also done a lot of business with Government and Public Sector organizations across the globe.
| Agriculture |
3.45 |
| Manufacturing |
37.93 |
| Education |
3.45 |
| Communication |
3.45 |
| IT Services |
3.45 |
| Financial Services |
17.24 |
| Transportaion |
6.90 |
| Home |
3.45 |
| Utilities |
3.45 |
| National and International Government |
3.45 |
| Healthcare |
6.90 |
| Services |
6.90 |
You got a good break with your contract with GE. Tell us more about it and how your company has evolved since then.
Post GE, Zycus got excellent customer references which helped Zycus gain a good hold in the market with U.S market recognizing Zycus as a key player in the spend data management domain. Zycus finally stood independent in 2005 when the fund from Citibank private equity and GE capital was paid back.
Thereafter, the expansion plans grew to Europe and APAC region with strong product development adding Strategic Sourcing and Contract Management Solutions to the product suite.
Technology market is highly dynamic and it is imperative to be futuristic in both thoughts and action to maneuver the business to the path of success. A sea change was being seen in the trend and we moved towards the SaaS direction and transformed solutions into complete SaaS based models. For the Indian Company to be truly global, the SaaS platform was most suited to provide the much needed impetus to reach the global markets.
End to end process automation is facilitated by Spend Management Solutions. The innovation in this space is substantiated by introduction of technologies like UNSPSC classification for high quality of data standardization, Artificial Intelligence used in Spend Analysis solution for more intelligent categorization along with Web 2.0 technology to enable greater user adoption.
We understand your interest is in providing easy-to-use solutions. Comment on the intuitive SaaS-based offering.
Software as a Service model has created a very low investment opportunities for the companies to adopt new technologies into their processes. It is more convenient and time saving for customers to learn and improvise. With lesser investment in infrastructure and faster implementation, Zycus is able to deliver high quality solutions with close to zero down time and 24 by 7 tech supports.
Emory University has selected Zycus’ Spend Management solutions to transform and automate their strategic sourcing initiatives. What are the typical solutions you could provide for universities?
Emory University has chosen Zycus Spend analysis and Strategic Sourcing. Their main challenge was uncontrollable spend and there was not traceable spend data to tighten control on the existing spend. Along with changing demand for various goods and services, Emory University also wanted to accommodate their additional budget on research. Our easy to use solutions mainly helped them track their spend data along with streamlining their P2P process. Also enabled the university to have a real time insight into the changing demand and spend pattern across the departments. Our solutions are flexible and used across all verticals.
Would you look at eventually becoming an e-procurement agency? What kind of growth would you opt for organic/inorganic.
The growth will definitely be organic in nature. The Spend Management cycle will be complete with P2P solutions which include e-Procurement. So Zycus, will eventually incorporate e-Procurement solution into its offerings but we will not become an eProcurement agency.
What is your employee strength. Any expansion plans? In which divisions?
Currently, our employee strength is 350-400.We have recently added 140 employees in the sales and marketing department across all of our offices globally. In the near future we will add approximately 100 in the R&D and engineering team. We are focusing mainly on our marketing and sales strength to penetrate further into the markets along with a robust R&D, product development department to continuously deliver and innovate in our offerings.
You have competitors like Ariba. What would be the edge you offer? Would you compete on cost?
We see Ariba in more than 90% of the deals we win. We believe our main differentiator is our product and the great user adoption it facilitates. We have had successful wins in the past because of our strong proof of concept and excellent sales responsiveness.
India has a mentality of opting for consultants for such options. How do you compete with the typical consultants?
For the Indian Market, we have Strategic Sourcing Services which is a service oriented approach. We provide our expertise in commodity sourcing along with our Strategic Sourcing Solution to provide our Indian customers a mix of consultancy and process automation.
What are the opportunities and challenges in this business in India and Europe?
The opportunities in both of these markets are immense. There has been a lot said and done in the Supply Chain domain. But post recessions companies have opened up to realize the need to tighten control on spends and pro- actively manage spend. India and Europe pose to be two of the biggest emerging markets in this Industry.
The biggest challenge in Europe is in terms of language diversity and the high reliance of the European customers on local vendors.
Indian Market still has high resistance to automation and considers automation as a threat to labour. This is a myth that needs to be broken. This process automation is just an enabler for better spend visibility and higher savings.
Tell us about your partnerships with companies like Wipro and Infosys? How many such partnerships you have. How much of revenues do such partnerships bring in?
As mentioned earlier, Zycus works with a variety of partners, which include large global consulting and system integration firms, small boutique spend management consulting companies and IT resellers in specific geographies
Comment on your marketing.
Our marketing efforts are primarily focused on building the base for spend management in the emerging markets and establishing the Zycus brand in matured markets like U.S. As this segment is quite niche, we channelize our strategies towards optimum customer service and quality in our products.
