Daksh: Scaling up the value chain

At a time when the Indian ITES industry is moving towards consolidation and evolving beyond the cost advantage syndrome, it is the innovative players who will survive. Being one of the few companies to have sensed changing market dynamics, Daksh eServices is poised to reap the benefits. The company’s growth chart is on course. From revenues of Rs 90 crore in 2001-02 the company has clocked Rs 150 crore for the year 2002-03, a growth of around 65 percent. The company estimates to grow at around the same rate to reach Rs 250 crore in the next fiscal.

Daksh is targeting high-profit segments such as banking, finance and insurance, high technology, telecom and e-commerce. A presence in all the important verticals has ensured a steady growth for the company. In addition to these, it is also eyeing the utility and airlines sector to further widen its portfolio. Within these verticals, the company is presently handling around 36 processes. With new customers being added next year, there are another 15-20 new processes in the pipeline.

Sanjeev Aggarwal

In terms of geographies, the company’s primary focus is on the US and European markets. Continuing its focus on these, the company now wants to explore beyond the UK market in the European territory. French and German markets are next on the company’s list. In addition to this, the company will also be targeting firms headquartered in the US and Europe, having operations in Singapore and the Australian market.

Though the company is operating in the same geographies as its competitors, one of the advantages it has over them is its de-risked revenue strategy. Instead of one or two anchor clients contributing to the bulk (80-90 percent) of business, Daksh has all its 10 customers contributing solidly to revenues. So, even if one customer goes, the loss to the business will not be drastic.

According to Sanjeev Aggarwal, co-founder & CEO of Daksh eServices, starting with up to 5 percent contribution at the beginning, clients generally contribute up to 30 percent of the business in a year’s time. The strategy of not depending too much on one client is standing the company in good stead as it encourages constant expansion of the customer base. In line with this strategy, its plan outlay includes adding at least one new customer every quarter. With 10 customers already under its belt, Daksh is targeting another four to six new customers this year.

Daksh has recently added two new centres taking its tally to five now. Of these, four are in Delhi and one is in Mumbai. According to Aggarwal, the first three centres are already choc-a-bloc with almost full utilisation of their capacities. The two additional centres are geared towards meeting growth in 2003. Presently with a 3,100-seat capacity it will be gradually adding another 1,000 seats in its new centres to cater to new customers.

Daksh’s operations include a combination of front-office and back-office work. Almost 80 percent of the work that Daksh is getting is front-office work, which includes customer care and technical support. Back-office work comprises the transaction processing kind of work. The company is looking at a sharper growth in its back office operations in 2003-2004. With this, the equation of their proportionate contribution to the business is likely to change to 70 percent and 30 percent for front-office and back-office respectively. On the front-office side, from the revenue standpoint, the company handles almost 65 percent voice and 35 percent Web-based queries comprising both e-mail and chat. As an indication of the company’s high-end focus, Aggarwal points out that within the front-office customer care and technology support business the most, i.e. 90 percent is in-bound. The strategy for the company is to scale its customers up the quality ladder; customers generally start out with a simple process and then move up to complex processes. Handling enterprise customers requires expertise and domain knowledge as it involves complex processes.

— Shipra Arora