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| Home - CEO Spotlight - May 04 Issue |
CEO Spotlight: Deepak Verma, eCredit
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Angel Mehta: How has eCredit repositioned itself since?
Deepak Verma: Today, we are stronger, wiser and very proud of our heritage. We are focused on what we know how to do well - enterprise software to help large and mid-sized corporations become better at receivables management. This starts with credit and goes through invoicing, dispute resolution, payments, cash application, and collections. Today, we have the best offering in the marketplace for integrated credit and collections, as well as a strong management and sales team. And, we’re starting to see the results. We had solid sales performance in Q4 last year, and are running well ahead of plan so far this year. I believe we can maintain this aggressive pace of growth for the foreseeable future.
Angel Mehta: Describe what the action plan was to turn the company around.
Deepak Verma: We made three major decisions. First, we rebuilt our products in web-based technologies (J2EE). Our product line is now called “nFusion” and has been very well received by our customers. “nFusion” can be deployed at a customer site or on our ASP. This allows us to serve customers with either preference. Secondly, in April of last year we raised additional capital and brought in two new investors. Third, with the new investors on board, we decided to do a retained search for a very talented sales executive. Since we filled this position, we have a complete and very capable management team.
Angel Mehta: Walk me through the value proposition of the solution right now.
Deepak Verma: There are three critical areas that companies must consider when looking at our solution. Firstly, everybody is looking for productivity gains and we clearly deliver a compelling ROI on this dimension. The second area is exposure. We help companies reduce their DSO and receivables write-offs. Since the meltdowns of bigger companies like Enron, WorldCom and KMart, our customers and prospects are saying they really need to understand what exposure they have with their customers, even their large customers. If you do business with a multi-national corporation around the world, understanding your aggregate exposure to your customer is much more important today than it was 5 years ago.
Angel Mehta: Do companies in that situation today even have a clue what kind of exposure they have?
Deepak Verma: Actually, No. And that’s just where we come in. Think of a company that sells to many GE divisions around the world. With our solution, the company can understand and monitor GE’s financial health, establish and periodically adjust a global credit limit for GE, allocate this limit to different GE divisions, and roll up worldwide exposure at any given time.
So area # 2 is really trying to understand how much risk you’re carrying. The third area is to use credit to increase sales. One of our customers - Ryder – had an interesting challenge. They have a talented sales team, which was successfully selling truck leases to small and mid-sized customers. Unfortunately, many of these customers were getting declined by the credit team at Ryder. So what did Ryder do? With our help, they implemented a risk-based pricing approach to sales. They now accept customers with different risk profiles at different price points. Then they pushed this even further by pre-qualifying prospects based on their credit profile, and having the sales team target those that they know will qualify. As you can imagine, this has had substantial impact on their top-line.
Angel Mehta: Give me a sense of what stage this category of solution is in when it comes to Fortune 500 buyers. It doesn’t seem like a category that’s generated a lot of buzz… is that a good thing or a bad thing?
Deepak Verma: That’s a very interesting question. The way I’d put it is to say that if you were to survey 100 customer prospects – all big companies - and look at what do they do today you would find many of them in spreadsheet hell. This is not like supply chain management or CRM which are well-developed categories. The infrastructure is very poor in terms of what companies do to solve this problem. If the CFO says, “Okay how much exposure do we have to GE today?”, guess what happens? It generates 35 hours of work to figure out the answer. They get some basic data from their various ERP systems, and then they use spreadsheets. In other words, credit operations are largely manual even today. As a result they’re experiencing all kinds of pain and don’t know what to do to correct it.
So is it a good thing or a bad thing that ours is not a developed category? I’ll answer that by saying that we’re a small company, Angel, but we’re still considered THE market leaders in the space, which just goes to show that it’s still early in its development cycle. I don’t think companies think of this as a legitimate category today, although they’re all experiencing major pain in it. Now from a competitive perspective, the space is heating up. The ERP vendors are stepping in and talking about financial value chain management. That’s good news and bad news at the same time. The bad news is that it can, to some extent, lead to freezing of the market – and we have experienced that in some sales situations.
The good news it helps legitimatize the space. And from our perspective, a large ERP vendor would never be as good as a specialist because they spread their attention and investment dollars across many categories. All we do is focus on our space, and believe we are the best in the world at it.
Deepak Verma is CEO of eCredit. In his previous capacity, he has held various senior management responsibilities at eCredit, including strategy, business development, marketing, and product management. Before eCredit, Deepak worked on enterprise-wide strategic alliances for the Baan Company, and at McKinsey & Company, primarily in the areas of growth strategies and organization effectiveness. Deepak can be reached for feedback at: dverma@ecredit.com.
Angel Mehta is Managing Director at Sterling-Hoffman, a retained executive search firm focused on VP Sales, VP Marketing, and CEO searches for enterprise software companies. He can be reached for feedback at: amehta@sterlinghoffman.net
 
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