Palo Alto based Caralta Corporation announced early this month that it has acquired Noida, UP/Delhi-based GMID Associates Private Limited. The acquisition gives Caralta Corporation important complementary Predictive Analytics and Decision Sciences skill sets, with a world class team and technology infrastructure, to deploy to a global market place.
Pankaj Kumar Jha, co-founder at Gmid Associates, talks with Analytics India Magazine on this merger.
[dropcap size=”2″]AIM[/dropcap]Analytics India Magazine: Congratulations on securing the acquisition from Caralta. Can you brief us about the size and other requirements of this acquisition?
[dropcap size=”2″]PKJ[/dropcap]Pankaj Kumar Jha: Thanks Bhasker. This is a merger of two private companies with complementary skill sets and offerings- Gmid brings in the core technologies expertise like scorecard analytics, predictive modeling and Caralta has access to larger markets and ability to scale with expertise in big data and ETL. Both companies will combine forces with unique services and product offerings in the global market place.
AIM: How was this deal secured? Please brief us about the procedure along with the timelines from initial talks to final merger agreement.
PKJ: Both parties have commonalities from Global Logic (GL) and common educational backgrounds from IITs, Harvard and Stanford. Both teams have strong successful background serving Fortune500 companies. The teams were introduced through a former HR head from GL in August last year. The final agreement happened in the last week of January.
AIM: What according to you is the motive of Caralta in securing this acquisition? What are the long-term benefits that Caralta see out of this acquisition?
PKJ: When Caralta was looking at the value chain in analytics they saw a hole. While Caralta offered strong services in data gathering, ETL, data visualization and big data, they saw Gmid’s strong predictive analytics background as a perfect fit. Gmid has been acquired to strengthen the core offerings of Caralta in the data value chain and establish them as a unique analytics services and product company to satiate data analytics needs of the global enterprise.
AIM: What are the expectations from this merger? What can we anticipate from this Partnership over the next year?
PKJ: As a global data analytics company, we want to offer unique products and services to our customers that solve our client’s decision sciences problems most effectively and quickly. Gmid has the deep analytics expertise and domain knowledge of sectors like banking, telecom, insurance and retail. With Caralta coming on board we will be able to move toward productization of some of our services offerings. Over the next couple of years, we want to leverage this merger and establish ourselves as thought leaders in the decision sciences industry.
As a next step in our evolution with this partnership, we are now leveraging our scorecard analytics knowhow to solve business problems for nontraditional industries and pushing frontiers of applications of decision science technology in unique ways.
AIM: Please brief us about some business solutions you work on and how you derive value for your clients out of it.
PKJ: Over the last few years, we have successfully deployed solutions to solve critical business problems across consumer facing industry verticals like banking, financial services, telecom, retail and insurance. Our unique skill set are in picking large amount of business data from our clients, performing statistical analysis, apply our scorecard solutions on the data to derive actionable insight to solve business problem of our clients. We also advise and help our clients to integrate data analytics solutions into their decision management system.
We helped world’s largest telecom company to devise their collection strategies. We built a scorecard to output risk score of all customers in collection. These scores are being used by the company to decide the treatment strategies (Calling frequency, sending SMS, notices etc). It helped them a lot in optimizing their limited collection budget and maximizing the revenue. Other than this recently, we helped banks and auto loan companies to predict the likelihood of fraud at loan disbursal level itself.
AIM: Please brief us about the size of your organization and what is hierarchal alignment, both depth and breadth.
PKJ: We have multiple offices in India and United States. Caralta team in United States will focus more on marketing and sales whereas India centre will be developed as a knowledge centre. If you look at the press release that went out, we have customers across the globe- the US, UK, SA India and Australia. We aspire to become a flexible and globally distributed organization and serve the global marketplace efficiently. Also we are aggressively hiring and reorganizing teams to deliver maximum value for our clients.
AIM: Would you like to share any example of an Insight that generated a huge positive impact for your clients?
PKJ: A large subprime auto financing company in the US was facing huge losses in early charge offs due to bad debts. We developed an application fraud prediction system that goes deeper than the credit ratings and not just separates good customer from the bad ones, but also suggests ways to elevate credit profile of a potentially risky customer. With this implemented, the client was able to reduce its write off losses by huge margin 9% even without increasing reject rates.
AIM: What are the most significant challenges you face being in the forefront of analytics space?
PKJ: Data analytics is going through the major change. Now business is moving from the service model to product model. This is the biggest challenge that we are facing today. We need to evolve with time and find ways to create products in analytics spaces. With this merger now we have that capability in team. Other than this finding right talent at optimal salary and retaining them is perennial challenge for all startups.
AIM: What kind of knowledge worker do you recruit and what is the selection methodology? What skill sets do you look at while recruiting in analytics?
PKJ: We look for four types of people. People with technology/ platform expertise – for data gathering/ massaging basically the ETL layer, then we look for people with strong mathematical and statistical background to work on the modeling team, we actively look for people with strong business development backgrounds especially in data sciences and fourth are the domain experts, people who have deep expertise in specific problem areas.[pullquote]The triumvirate of storage, fast processing power and network bandwidth creates the perfect storm for historical data based artificial intelligence systems to become real time machine learned systems. And that’s where the action is going to be.[/pullquote]AIM: How do you see Analytics evolving today in the industry as a whole? What are the most important contemporary trends that you see emerging in the Analytics space across the globe?
PKJ: Businesses across the globe are at a stage right now where they now realize that they have to leverage their deep data pools to strengthen their positions. So analytics and decision sciences are no more a “nice to have”; they are now “must haves”. Businesses are now mature enough to move from descriptive analytics solutions to predictive analytics and leverage these insights for their benefit. The analytics eco system is also moving from the old world of client/ service apps to cloud and mobile based technologies. The software world is also moving towards data.
AIM: Besides this acquisition, what else can we expect to hear in near future?
PKJ: We expect to acquire at least two more companies with complementary skill sets this year. Soon we will be announcing the addition of an international business leader to our board.
AIM: Anything else you wish to add?
PKJ: We are very excited with the way Analytics industry is shaping up worldwide. The technology growth in recent years has also helped the decision science to handle volumes of data, which was underutilized earlier. We aim is to create analytics based decision making as a key differentiator for our clients vis-à-vis their competitors.
[spoiler title=”Biography of Pankaj Jha” style=”fancy” icon=”plus-circle”]Pankaj holds a masters degree in statistics from the prestigious Indian Institute of Technology Kanpur. The award winner at Citigroup is known for his models for parameter setting & customer profiling, and has worked on a plethora of assignments for Credit Card and Retail Assets including normalization, early card collection, roll forward, application fraud, churn, early collections for personal loans and two-wheeler loans, bad debt, and many more. His segmentation techniques brilliantly captures the Pareto Principle and repeatedly ensures that his target customers appear in the top performance buckets when validated.
Pankaj has considerable expertise in the areas of Customer Segmentation Scorecards, Clustering in non-availability of target cases, and Portfolio Analysis for loans. He has demonstrated excellent abilities of solving complex business problems with a data-intensive-approach notably Generalized Linear Models (GLM), usage of surrogates by data mining techniques, and creation of innovative fields for model usage. His ability to convert non-linear behavior of resources into linear models give him the edge to conceptualize both costs and efforts of an organization into effective techniques of linear and logistic regressions.
A learner and perfectionist in work, he is particularly fond of Tolkien’s Lord of the Rings and wish to imitate the ability to design systems with business rules and control points embedded so nicely that all operations behave optimally and as planned.[/spoiler]