e-Zsigma July 2004 Newsletter
Six Sigma SpotLight:Dr. Prasad Raje, Founder & CEO, Instantis, Inc. |
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Six Sigma SpotLight is a regular feature of the e-Zsigma newsletter, and allows us to introduce one of the global six sigma community's superstars. Dr. Prasad Raje is the founder and CEO of Instantis, (www.instantis.com), a technology company that has emerged as the leader in Corporate Performance Management (CPM) solutions with specific application to the Six Sigma high-impact business management strategies being executed by many global industries leaders today. The EnterpriseTrack solution from Instantis is used by leading corporations to manage their Six Sigma and other performance initiatives. In late 1993, Dr. Raje launched Internet Information Systems, one of a handful of companies that pioneered the development and hosting of websites for businesses - the Internet being in its infancy at that time - with customers like KLA-Tencor, Sun Microsystems and others. Prior to founding Instantis in 1999, Prasad was VP of Engineering at Castelle, a fax network appliance and software company, where he had broad executive duties, with direct responsibility for product development and technical support across multiple product lines and geographies. He led a group of 35 engineers to bring to the 6,000-strong customer base several new software and hardware product releases with revenues of $40M over two years. Previously, for six years he was a manager and engineer at Hewlett-Packard Labs, where he led efforts to develop VLIW processor micro architectures, including the HP/Intel Merced joint effort. Dr. Raje is an inventor with 8 US Patents. He holds an M.S. and Ph.D. in Electrical Engineering from Stanford University, where he was a CIS/HP Fellow, and a B.S. from the Indian Institute of Technology, Bombay, where he received the President of India Gold Medal in 1986 for being the top graduating student across all disciplines. While attending the 5th Annual Six Sigma Leadership Conference in June this year, we had a chance to meet with Dr. Raje and discuss with him the origins of Instantis as well as what the future holds for his firm and Corporate Performance Management solutions. -------------------------------- 1. News: "How does someone with a Ph.D, in Electrical Engineering from Stanford University find themselves founding as well as leading a successful Enterprise Performance Management technology company? That seems to be a long way from your days at Hewlett-Packard Labs and the 8 US patents you hold in that field. Can you share with our readers a few highlights from your journey and what led you to the creation of Instantis?" 1. Dr. Raje: "The journey for me has been a long one… I was raised in the environment of a family-run manufacturing business. I always wanted to be an entrepreneur - to create and grow a new business . Early in my career, while at HP (Hewlett-Packard), I was gaining important experience in a large corporation, but I did want to eventually move into a smaller company - this was always part of my career plan. Fortuitously for me in 1993, the (World Wide) Web (Internet) came along - I saw Mosaic for the first time - and my technical background as well as business understanding enabled me to see very early on that this Internet phenomenon would change the world in a very profound way. I knew that every company would be transformed by this technology, and there would be huge opportunities created for entrepreneurs like myself. At that time, I launched a company called Internet Information Systems (IIS) that enabled companies to build corporate websites… customers who included Sun Microsystems, KLA-Tencor, several mortgage companies doing $100M+ in mortgage loans through these web sites…. I built IIS from the ground up, having taught myself all of the software technology required to write and build all the content, operate as well as service our clients. Many of these clients wanted more than just a static website. They also wanted operational or transactional capability over the web. Over time, I realized that much of the backend programming that goes into these transactional websites was repetitious. Literally, in the middle of the night in 1999, I had the revelation that you should be able to automate the process of building web applications without the need to write Java code or SQL code from scratch. If you were able to define the user-interaction model, there would be a system underneath that would automatically generate the required business logic, database and web-interface. The idea for Instantis was borne out of my many years of experience with Internet Information Systems. I put together a tremendously strong founding and early management team. In late 1999, I raised a million dollars from prominent Silicon Valley angel investors that had known me while I was working at other companies. An additional fifteen million dollars was raised from professional venture capitalists in 2000. The transition of Instantis into Six Sigma or Enterprise Performance Management came when we were seeking a specific enterprise application product to apply our technology platform to, and we were fortunate to be approached in 2001 by McKesson who were seeking out a new system to support their Six Sigma efforts. McKesson had the foresight to recognize that Instantis had the ability to build exactly what they wanted using our robust technology base. We delivered to McKesson the finished product in just 3 ½ months. With that experience, and looking to develop a replicable sales model, we researched extensively the Six Sigma market and we confirmed that what McKesson had needed was, in fact, a requirement for a large number of firms - that Six Sigma represented a vibrant product market that was already supported by several companies. We decided at that time to pursue a partnership model, developing relationships with well-recognized Six Sigma training companies such as Sigma Breakthrough Technologies (SBTI), which allowed us to rapidly gain the traction we have today in the Six Sigma market" 2. News: "With a client roster that includes Xerox, McKesson and North Shore-Long Island Jewish Health System, Instantis has succeeded where many companies have failed, in terms of developing and marketing web-based technologies that are well-suited for the Six Sigma or high-impact business management solutions market. To what would you attribute your success?" 2. Dr. Raje: "Instantis has spent a lot of time, effort and money building a very robust underlying architecture, and in doing so, have raised far more capital ($22M) than any other technology company in this market… this has enabled us to develop what I believe to be a superior underlying technology that allowed us to not only deploy our first version quickly, but more importantly, to rapidly innovate and enhance the capability and functionality of the product that puts us on a much higher acceleration curve in terms of product improvement than any of our competitors. Compared to where we were even six months ago, we are much further along, and our pace of growth of product feature, function, value and quality is accelerating. Secondly, I think it is because we are a dedicated Six Sigma software company - that is our sole focus. We are an enterprise-class software company focused on this market in a very serious way. We know the software business, how to write software, how to understand customer product requirements and translate them into feature function, and then deliver high-quality product. Thirdly, I think I can attribute some of our success to our partnership model where we are not in competition with Six Sigma training companies - we are complementary to what they do, and we have sought out and established very healthy partnerships based on bi-directional benefit. As a result, we have created a very strong eco-system of companies around us." 3. News: "In an article in by L. Scott Tillet in InternetWeek on December 8, 2000, you stated that, "Using the Web to collect information is becoming more important to sites formerly used as brochureware". This reference was made to Instantis's earlier SiteWand solution for automating business processes on a website. To what extent was this earlier experience leveraged in terms of the Enterprise Performance Management technology we see today at Instantis?" 3. Dr. Raje: "The underlying technology we developed before we became a Six Sigma vendor provides us with a very powerful technology base… it allows us to evolve feature functions much more quickly. It enables our developers to focus on the user requirements from the interface and business logic and allows us to render those requirements into functioning features 2x faster. It allows us to support different platforms, for example, what we developed for an Oracle database in a structured layer were easily and rapidly ported to Microsoft SQL Server, simply because this type of change doesn't impact the rest of the developers in the company. Another important aspect of the technology is scalability… that allows us to scale to enterprise-wide deployments with tremendous ease. We have a single, central database repository where we can have multiple instances of the middle tier business logic running so that hundreds of simultaneous users can be accessing the system with no performance degradation. We can also make rapid, on the fly changes to the business logic - our support people can actually go into a live, deployed system and make changes in safe and secure manner. Security is another infrastructure benefit we get - we don't have to rely on the average (software) developer to be security conscious - that security is ensured at the infrastructure level." 4. News: "In 1994, after earning your Ph.D. in Electrical Engineering at Stanford, you recognized the Internet's potential and started a small Web site business, which planted the seeds for Instantis. Can you tell us a bit about some of the ups and downs of leading a start-up technology company and the challenges you had to face, including the hunt for investment capital?" 4. Dr. Raje: "The challenges were even more basic than that. I remember in 1994 that you had to actually tell people what a URL was, what the Web was, and why they should have a website… that, in fact, it wasn't a government controlled thing and that they could own a commercial website. It was an evangelical challenge… I have examples of going to book publishing companies and showing them how they could sell their books on the Web, and they would say, "Why would we do that?… We have our traditional channels." Many of our customers were originally skeptical about the new technology, but by 1996, the majority of the world had woken up to the possibilities and potential offered by this new technology." Scroll up to right-hand side of page to continue interview... |
Dr.
Prasad Raje, CEO & Founder, Instantis, Inc. Click here to learn more about Instantis Continued from left panel... 5. News: "If Instantis could do it over again, what would you have done differently?" 5. Dr. Raje: "I think we might have focused on the Six Sigma market sooner. There was opportunity in some of the large early Six Sigma deployments… like Dupont, Ford and so on, who were seeking product solutions and there weren't any viable ones out there in the market. Instantis could have been that solution for those companies, and allowed them to avoid the pain of building an internal solution, which a lot of them did. Several companies that built internal first generation solutions are now deciding that they can get much better feature/function and value from a pure-play software vendor like ourselves. Software development, enhancement and support is after all not their core-competency." 6. News: "In an article published in Portals Magazine on January 28, 2003, you are quoted as saying that the Six Sigma software arena is "poised for takeoff". With over a year under your belt, how would you describe the flight so far? Has the take-off that you expected occurred, and more importantly, what do you see as the future for Instantis and its Enterprise Performance Management technology?" 6. Dr. Raje: "I think that in 2004, the momentum is certainly higher than in preceding years, so I see that prediction coming to fruition. Our experience over the first six months of 2004 in terms of companies actually seeking solutions, the sales cycles we are engaged in, the deals we have actually closed, is significantly higher - at least by a factor of two over 2003. I think this is a combination of three things. One is the upward moving economy and subsequent releases of corporate spending on software and information technology. Second, we are seeing the increasing penetration of Six Sigma across corporations and industries, which has resulted in increased demand for enterprise performance management solutions like Instantis. Third, our product is winning more competitive deals against direct competition. We are also expanding our footprint beyond Six Sigma to provide a single, centralized repository that supports other strategies and such as PMI initiatives, IT projects, and multiple project methodologies. Our ability to do that better than our competitors is a significant differentiator for Instantis." 7. News: "If I were to look at Instantis three years from now, how would it be different from what I see today?" 7. Dr. Raje: "Without giving away our specific product plans, I can speak at a high level, about the enterprise software business in general. So far, most enterprise technology has been focused on transactional software - salesforce automation (SFA) and CRM (customer relationship management) software, ERP (enterprise resource planning), supply chain, financial transactions and accounting software, and so on. We are now seeing the emergence of a new breed of enterprise software, which goes beyond the day-to-day operational needs of companies to broad-based, corporate, strategic needs. At the highest level of management within a company, the "C" level, its not as important that a particular invoice transaction was completed correctly… what is important at that level is that the corporate strategic goals are being achieved… that long-term improvement goals are being realized… that profits or revenues are growing… that customer satisfaction is increasing. In order to do that, you need to have complex initiatives in place. Six Sigma is an example of a complex initiative that is typically undertaken at the C-level, (CEO, senior leadership), for the purpose of transforming a company. Our technology enables the success of these complex initiatives. In that sense, we are a new class of software. Instantis definitely sees itself as leading, not just amongst the Six Sigma vendors, but overall in the enterprise software market… a vanguard of this new trend." 8. News: "Other concepts or terms that seem to come up quite often when discussing Six Sigma technology are Business Intelligence and Balanced Scorecard. How would you describe Instantis in the context of these two subjects?" 8. Dr. Raje: "Well, traditional business intelligence, BI, refers to the standard query reporting software companies. Instantis does not see itself as a query reporting software company, such as Business Objects or Cognos; we are not in that space. However, there is a well-established, new market defined by Gartner called "Corporate Performance Management", CPM, which we are essentially co-opting as Enterprise Performance Management, EPM. In a nutshell, Enterprise Performance Management is a three-part process. First, setting corporate goals at a high level and cascading this throughout the organization, and then second, executing improvement via initiatives like Six Sigma. We see ourselves as exceptionally strong, and growing stronger, in the execution aspect of EPM. And then, there is reporting, where the (Balanced) Scorecard and BI resides. Once you have executed projects or performance improvement initiatives, you need to be able to report on them or create a summary scorecard at various levels of the organization - that requires BI aggregation of the information, queries, generation of reports and graphs that show you where are compared to where you want to be. That is the enterprise performance management circle; Plan, Execute, Report.
We see Instantis as having dominant strength in the Execute component, while having required touch points into the other components of the corporate performance management circle." 9. News: "Are there any plans to take Instantis public in the near future?" 9. Dr. Raje: "This is an open question. Obviously, our investors want to get a return on their investment over time. Our present focus is completely on revenue growth and market share growth. As far as public plans, it depends on how we execute on our goals and how the public markets look at enterprise software companies like ourselves in the coming years."
Rod Morgan, e-Zsigma, Inc. -------------------------------- If you have a six sigma "superstar" you would like to have featured in SpotLight, send your submission to news@e-zsigma.com. Please include in your email; 1. a brief biography of the person you are recommending 2. the reason you are submitting their name 3. a photograph or "action shot" if you have one 4. your nominee's contact information (so that the e-Zsigma news team can obtain their consent as well as conduct an brief interview)
If you have any questions regarding Six Sigma Spotlight, please contact e-Zsigma at news@e-zsigma.com. Your feedback is always appreciated.
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