The success and growth of Indian information technology (IT) service firms over the last decade has been built on the 'linearity' model of operation, wherein revenue expansion implied a proportionate increase in human resources. While the linear business model has served companies well in the past, its long-term sustainability is now being questioned on the grounds of organisation size, manageability, and rising costs. Zyme Solutions Inc (Zyme), a fully outsourced hosted data intelligence service provider to the high-tech vertical market, has enjoyed spectacular growth over the last few years by building its business around a non-linear business model. Prof D V R Seshadri spoke to Chandran Sankaran, who founded Zyme in 2004, about how the Zyme business model was conceptualised and grown. Sankaran's previous experience in consulting and enterprise software enabled him to see that it was possible to build a business by encapsulating deep domain knowledge in a software platform. Simultaneously he was attracted by the business model of outsourcing, realising that the traditional model of enterprise softwaredfirst building a software application and then trying to educate customers on how to use itdwas not working. Zyme combines the standardised platform aspect of a software business with the end-to-end business process value of a services company. Zyme helps customers derive benefits such as incentive cost optimisation, in channel inventory management, revenue accounting and audit risk compliance. While in theory the model may appear easy to replicate, Sankaran is confident of his company's first-mover advantage in the domain and the market space. The shift to a non-linear model, according to Sankaran, would require ITES companies to change their mindset fundamentally, from focusing on the pool of people to the market problem, and defining, building, and selling the solution footprint.
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