Collaborative Data Management – Need of the hour!

Well the topic may seem like a pretty old concept, yet a vital one in the age of Big Data, Mobile BI and the Hadoops! As per FIMA 2012 benchmark report Data Quality (DQ) still remains as the topmost priority in data management strategy:

‘What gets measured improves!’ But often Data Quality (DQ) initiative is a reactive strategy as opposed to being a pro-active one; consider the impact bad data could have in a financial reporting scenario – brand tarnish, loss of investor confidence.

But are the business users aware of DQ issue? A research report by ‘The Data Warehousing Institute’, suggested that more that 80% of the business managers surveyed believed that the business data was fine, but just half of their technical counterparts agreed on the same!!! Having recognized this disparity, it would be a good idea to match the dimensions of data and the business problem created due to lack of data quality.

Data Quality Dimensions – IT Perspective

 

• Data Accuracy – the degree to which data reflects the real world
• Data Completeness – inclusion of all relevant attributes of data
• Data Consistency –  uniformity of data  across the enterprise
• Data Timeliness – Is the data up-to-date?
• Data Audit ability – Is the data reliable?

 

Business Problems – Due to Lack of Data Quality

Department/End-Users	Business Challenges	Data Quality Dimension*
Human Resources	The actual employee performance as reviewed by the manager is not in sync with the HR database, Inaccurate employee classification based on government classification groups – minorities, differently abled	Data consistency, accuracy
Marketing	Print and mailing costs associated with sending duplicate copies of promotional messages to the same customer/prospect, or sending it to the wrong address/email	Data timeliness
Customer Service	Extra call support minutes due to incomplete data with regards to customer and poorly-defined metadata for knowledge base	Data completeness
Sales	Lost sales due to lack of proper customer purchase/contact information that paralysis the organization from performing behavioral analytics	Data consistency, timeliness
‘C’ Level	Reports that drive top management decision making are not in sync with the actual operational data, getting a 360o view of the enterprise	Data consistency
Cross Functional	Sales and financial reports are not in sync with each other – typically data silos	Data consistency, audit ability
Procurement	The procurement level of commodities are different from the requirement of production resulting in excess/insufficient inventory	Data consistency, accuracy
Sales Channel	There are different representations of the same product across ecommerce sites, kiosks, stores and the product names/codes in these channels are different from those in the warehouse system. This results in delays/wrong items being shipped to the customer	Data consistency, accuracy

*Just a perspective, there could be other dimensions causing these issues too

As it is evident, data is not just an IT issue but a business issue too and requires a ‘Collaborative Data Management’ approach (including business and IT) towards ensuring quality data. The solution is multifold starting from planning, execution and sustaining a data quality strategy. Aspects such as data profiling, MDM, data governance are vital guards that helps to analyze data, get first-hand information on its quality and to maintain its quality on an on-going basis.

Collaborative Data Management – Approach

Key steps in Collaborative Data Management would be to:

• Define and measure metrics for data with business team
• Assess existing data for the metrics – carry out a profiling exercise with IT team
• Implement data quality measures as a joint team
• Enforce a data quality fire wall (MDM) to ensure correct data enters the information ecosystem as a governance process
• Institute Data Governance and Stewardship programs to make data quality a routine and stable practice at a strategic level

This approach would ensure that the data ecosystem within a company is distilled as it involves business and IT users from each department at all hierarchy.

Thanks for reading, would appreciate your thoughts.

 

Collaborative Data Management – Need of the hour!

Well the topic may seem like a pretty old concept, yet a vital one in the age of Big Data, Mobile BI and the Hadoops! As per FIMA 2012 benchmark report Data Quality (DQ) still remains as the topmost priority in data management strategy:

‘What gets measured improves!’ But often Data Quality (DQ) initiative is a reactive strategy as opposed to being a pro-active one; consider the impact bad data could have in a financial reporting scenario – brand tarnish, loss of investor confidence.

But are the business users aware of DQ issue? A research report by ‘The Data Warehousing Institute’, suggested that more that 80% of the business managers surveyed believed that the business data was fine, but just half of their technical counterparts agreed on the same!!! Having recognized this disparity, it would be a good idea to match the dimensions of data and the business problem created due to lack of data quality.

Data Quality Dimensions – IT Perspective

 

• Data Accuracy – the degree to which data reflects the real world
• Data Completeness – inclusion of all relevant attributes of data
• Data Consistency –  uniformity of data  across the enterprise
• Data Timeliness – Is the data up-to-date?
• Data Audit ability – Is the data reliable?

 

Business Problems – Due to Lack of Data Quality

Department/End-Users	Business Challenges	Data Quality Dimension*
Human Resources	The actual employee performance as reviewed by the manager is not in sync with the HR database, Inaccurate employee classification based on government classification groups – minorities, differently abled	Data consistency, accuracy
Marketing	Print and mailing costs associated with sending duplicate copies of promotional messages to the same customer/prospect, or sending it to the wrong address/email	Data timeliness
Customer Service	Extra call support minutes due to incomplete data with regards to customer and poorly-defined metadata for knowledge base	Data completeness
Sales	Lost sales due to lack of proper customer purchase/contact information that paralysis the organization from performing behavioral analytics	Data consistency, timeliness
‘C’ Level	Reports that drive top management decision making are not in sync with the actual operational data, getting a 360o view of the enterprise	Data consistency
Cross Functional	Sales and financial reports are not in sync with each other – typically data silos	Data consistency, audit ability
Procurement	The procurement level of commodities are different from the requirement of production resulting in excess/insufficient inventory	Data consistency, accuracy
Sales Channel	There are different representations of the same product across ecommerce sites, kiosks, stores and the product names/codes in these channels are different from those in the warehouse system. This results in delays/wrong items being shipped to the customer	Data consistency, accuracy

*Just a perspective, there could be other dimensions causing these issues too

As it is evident, data is not just an IT issue but a business issue too and requires a ‘Collaborative Data Management’ approach (including business and IT) towards ensuring quality data. The solution is multifold starting from planning, execution and sustaining a data quality strategy. Aspects such as data profiling, MDM, data governance are vital guards that helps to analyze data, get first-hand information on its quality and to maintain its quality on an on-going basis.

Collaborative Data Management – Approach

Key steps in Collaborative Data Management would be to:

• Define and measure metrics for data with business team
• Assess existing data for the metrics – carry out a profiling exercise with IT team
• Implement data quality measures as a joint team
• Enforce a data quality fire wall (MDM) to ensure correct data enters the information ecosystem as a governance process
• Institute Data Governance and Stewardship programs to make data quality a routine and stable practice at a strategic level

This approach would ensure that the data ecosystem within a company is distilled as it involves business and IT users from each department at all hierarchy.

Thanks for reading, would appreciate your thoughts.

 

Collaborative Data Management – Need of the hour!

Well the topic may seem like a pretty old concept, yet a vital one in the age of Big Data, Mobile BI and the Hadoops! As per FIMA 2012 benchmark report Data Quality (DQ) still remains as the topmost priority in data management strategy:

‘What gets measured improves!’ But often Data Quality (DQ) initiative is a reactive strategy as opposed to being a pro-active one; consider the impact bad data could have in a financial reporting scenario – brand tarnish, loss of investor confidence.

But are the business users aware of DQ issue? A research report by ‘The Data Warehousing Institute’, suggested that more that 80% of the business managers surveyed believed that the business data was fine, but just half of their technical counterparts agreed on the same!!! Having recognized this disparity, it would be a good idea to match the dimensions of data and the business problem created due to lack of data quality.

Data Quality Dimensions – IT Perspective

 

• Data Accuracy – the degree to which data reflects the real world
• Data Completeness – inclusion of all relevant attributes of data
• Data Consistency –  uniformity of data  across the enterprise
• Data Timeliness – Is the data up-to-date?
• Data Audit ability – Is the data reliable?

 

Business Problems – Due to Lack of Data Quality

Department/End-Users	Business Challenges	Data Quality Dimension*
Human Resources	The actual employee performance as reviewed by the manager is not in sync with the HR database, Inaccurate employee classification based on government classification groups – minorities, differently abled	Data consistency, accuracy
Marketing	Print and mailing costs associated with sending duplicate copies of promotional messages to the same customer/prospect, or sending it to the wrong address/email	Data timeliness
Customer Service	Extra call support minutes due to incomplete data with regards to customer and poorly-defined metadata for knowledge base	Data completeness
Sales	Lost sales due to lack of proper customer purchase/contact information that paralysis the organization from performing behavioral analytics	Data consistency, timeliness
‘C’ Level	Reports that drive top management decision making are not in sync with the actual operational data, getting a 360o view of the enterprise	Data consistency
Cross Functional	Sales and financial reports are not in sync with each other – typically data silos	Data consistency, audit ability
Procurement	The procurement level of commodities are different from the requirement of production resulting in excess/insufficient inventory	Data consistency, accuracy
Sales Channel	There are different representations of the same product across ecommerce sites, kiosks, stores and the product names/codes in these channels are different from those in the warehouse system. This results in delays/wrong items being shipped to the customer	Data consistency, accuracy

*Just a perspective, there could be other dimensions causing these issues too

As it is evident, data is not just an IT issue but a business issue too and requires a ‘Collaborative Data Management’ approach (including business and IT) towards ensuring quality data. The solution is multifold starting from planning, execution and sustaining a data quality strategy. Aspects such as data profiling, MDM, data governance are vital guards that helps to analyze data, get first-hand information on its quality and to maintain its quality on an on-going basis.

Collaborative Data Management – Approach

Key steps in Collaborative Data Management would be to:

• Define and measure metrics for data with business team
• Assess existing data for the metrics – carry out a profiling exercise with IT team
• Implement data quality measures as a joint team
• Enforce a data quality fire wall (MDM) to ensure correct data enters the information ecosystem as a governance process
• Institute Data Governance and Stewardship programs to make data quality a routine and stable practice at a strategic level

This approach would ensure that the data ecosystem within a company is distilled as it involves business and IT users from each department at all hierarchy.

Thanks for reading, would appreciate your thoughts.

 

Hexaware sees strong order pipeline; 20% growth: Nishar

Atul Nishar, chairman, Hexaware, says that we remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve.

Atul Nishar, chairman, Hexaware , says that we remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve.

He also says that currently there are five deals in the pipeline and one is in the advance stage. The deals are spread across from the United States and Europe, and across major verticals like capital markets, travel and emerging verticals. And in the last nine quarters the company has signed seven large deals.

Below is the edited transcript of his interview to CNBC-TV18.

Q: Hexaware recently had a deal and there have been reports or analyst notes which suggest that the company is in conversation with potential clients for four deals and one is in advance stages. Do you think something could fructify in the near-term?

A: Currently, there are five deals in the pipeline and one is in the advance stage. The deals are spread across from the United States and Europe, and across major verticals like capital markets, travel and emerging verticals. And in the last nine quarters we have signed seven large deals.

Q: Are billings under pressure even if the deals are coming? Are they coming from tight fisted managements?

A: In over last two years, we have marginally improved our average billing on both on onsite and offshore. We don’t see any pressure on pricing on the IT industry. Repeatedly, we have guided that our pricing should be assumed to be stable.

The important point is that the client want value, greater performance, result oriented projects and fixed priced or greater commitment by off shoring companies.  Clients do want to cut their costs and get more value, but they also know if it is all done at the cost of the service provider, it will not sustain that particular situation.

Q: How much do you think is Nasscom’s 13-14% growth target under threat? What might it fall to half or high single digits?

A: Nasscom has guided for 11-14% and it is a wide enough range. In the industry we saw that some companies like mid-sized companies and companies who are scale players have also done very well. It is a mixed reason. We have seen more client specific issues coincidence for downsizing for whatever reason that may dent revenue that doesn’t mean they will not be able to grow in future.  

Q: Do you think Nasscom will hold the lower end of their 11% range?

A: That is the current optimism. So, there is no reason to believe that there is material change from the guided number.

Q: The one concern around Hexaware has been for some time that you have seen an improvement in margins, but going forward it would come under pressure because in Q3 wage hikes are expected to shave off margins to a certain extent. How do you respond to that?

A: In Q2, ours being calendar year, Hexaware reported 22.9% EBITDA which was higher than Q1. We gave normal 10% increment to all our off shore employees. The impact was absorbed in our margin and in spite of that the margin improved.

We also absorbed the significant visa costs that traditionally come in that quarter. In the coming quarter there will be onsite increase in wages. For off shore workers the date of increment is April 1 and for onsite employees the date is July 1, which remains unchanged. And we feel with this we can guide stable margins.

We are proud that at Hexaware, we have grown at higher than the industry average at good margins. We don’t believe in taking new deals by compromising on margins in any manner.

Q: So at this juncture you don't want to change your guidance of 20% dollar revenue growth any which way, up or down?

A: We remain quite positive on growing at 20% or more. We feel that if the situation improves with US elections and no debacle in Europe then the environment could only improve. 

 

 Watch Video

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show »

 

 

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Short-term contracts give mid-cap IT cos new lease of life

With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Midcap IT players may get a new lease of life. With the duration of outsourcing deals getting shorter, deals worth nearly USD 85 billion are up for renegotiations this year, reports CNBC-TV18’s Shreya Roy.

Over the last few years, uncertain times have forced IT companies to go in for more short-term contracts. For mid-cap IT companies, this may have been a blessing in disguise.

Data from outsourcing advisory firm TPI says that around 700 contracts will be up for renegotiations this fiscal year, compared to 530 last year.

“There is a significant reduction in the tenure of contracts as they were originally signed. Compared to 10 years ago, when 500 of these were being done, there are 1000 a year. The tenure has gone down to five years instead of seven, so a lot of deals are naturally coming back to the market as renewals. In itself, this is a very large opportunity,” said Siddharth Pai, partner and MD at TPI India.

For many IT players, this may be just what the doctor ordered. After all, renewals account for almost 65% of the outsourcing market. Advisory firm Everest estimates that by October 2013, deals worth nearly USD 85 billion will be up for renewal.

These include a contract between HP and Bank of America, a mega deal from Shell group which is currently with AT&T, HP, and T-Systems, a blue cross blue shield deal with Dell and Manu Life's deal with IBM.

Many of these contracts are expected to be broken up into smaller chunks, as outsourcers are looking increasingly towards multi-sourcing. Analysts say this could work in the favour of the smaller players, especially those like Mindtree and Hexaware, which have been focusing on developing niche capabilities to help differentiate from larger players.

 

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show »

Hexaware Technologies :Riding High! --nirmal bang,

Riding High!
Hexaware Technologies Limited (HTL) is a mid-sized IT company mainly catering to the capital markets (BFSI) and the airline (transportation) sector. It also focuses on enterprise software provided by PeopleSoft and Oracle. Recent large client wins has bought back the focus on this company which has good expertise in the niche areas. 


Investment Rationale

 Improved Revenue visibility due to large wins in the past 5 quarters

The deal wins of over $ 625 mn which HTL has gained in the past 5 quarters is commendable. HTL’s efforts of mining the existing clients in the gloomy days are paying off now reflecting in the incremental revenue streams it has earned. These long term deals give enough revenue visibility for CY12. In addition, HTL is negotiating almost 4 deals above $25mn which are in the pipeline.

 Margins moving northwards – room for further heights
EBIDTA margins have improved 812 basis points in the past 5 quarters led by drastic control in the operating costs. The company has in addition utilized its offshorablity lever in its advantage by moving almost 14% of work offshore during the same period. Currently, onsite: offshore mix stands at 53:47, utilization in early 70’s and plans to hire freshers would further aid the margins going forward. We expect HTL to report EBIDTA margins of 20% + in CY12E and CY13E.

 Proficiency in niche segments paying off
HTL earns 60% of its revenues from the Capital Markets and Travels industries and almost 30% of revenues come from enterprise solutions in terms of its service lines. In enterprise solutions, 60-65% of its revenues are from PeopleSoft where other software vendor’s focus is less.

 Guidance Revision of 20% on USD revenues for CY12E

On the back of good deals won recently, the company has revised the revenue guidance in USD terms to 20%. We feel this is a little conservative and the company can easily beat the guidance for CY12E.
Valuation & Recommendation

We expect HTL’s revenues to grow at a CAGR of 25% and adjusted profits to grow at a CAGR of 21% over CY11-CY13E. Margin improvement would remain under focus and we expect HTL’s EBIDTA margins improving by 313bps to 21.2% in CY13E from 18.03% in CY11. At CMP, the stock is trading at 10.4x and 8.6x for CY12E and CY13E respectively. On the back of improved financials and good revenue visibility, we recommend a BUY on the stock, assigning a target multiple of 11x for CY13E EPS with a price target of Rs. 147 which is a potential 28% upside.

Risks to our Rationale:

 Concentration in Discretion spending Revenues
Hexaware derives more than 50% of its revenues from Enterprise solutions and Business Intelligence and Analytics which could get affected in economic downturn. However, the recent deal wins re-affirms the revenue visibility for the company for CY12E.

 Industry Risks of wage pressures, rupee appreciation and competition
Rupee depreciation has acted in favor of the company and Industry per say. Any severe reversal of the rupee trend would affect the prospects of the firm.

 Exposure in the European Region
The company has 28.4% exposure in the European region and few of the major deals have been signed with clients in this region. Looking at the current economic scenario prevailing in the Euro zone, any delay in commencement of these deals or cancellation may impact the margins severely.

Valuation & Recommendation
We expect HTL’s revenues to grow at a CAGR of 25% and adjusted profits to grow at a CAGR of 21% over CY11-CY13E. Margin improvement would remain under focus and we expect HTL’s EBIDTA margins improving by 313bps to 21.2% in CY13E from 18.03% in CY11. At CMP, the stock is trading at 10.4x and 8.6x for CY12E and CY13E respectively. On the back of improved financials and good revenue visibility, we recommend a BUY on the stock, assigning a target multiple of 11x for CY13E EPS with a price target of Rs. 147 which is a potential 28% upside.

Hexaware Q2 net rises 48% on higher revenues

Software service provider hexaware technologies has reported a 48 per cent increase in net profit at Rs 89.03 crore for the second-quarter ended june 2012 against the same period last year.

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Hexaware bets on UK, new verticals to lead mid-tier IT growth

Infosys, TCS and Wipro may be getting cautious in their outlook, but not hexaware technologies

.

After nine quarters of positive growth, the mid-tier leader is confident of a 20% year-on-year (yoy) growth in dollar revenues for fiscal 2013.