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Why we invested in ScrumStart

Published on: March 21, 2018        Author: Alok Kumar
IN 2009, when I was roped in by Sears to start their IT captive in India, I had hardly any understanding of what captives do and why any company would like to have their offshore captive company. My experience was that of a CIO, and I did not have experience of working in an IT services company. The CIO of Sears that time, Timothy Kasbe probably took a gamble in selecting me for the job.

After struggling for few months, I learned everything from the elements and through sheer experience while the journey of Sears India unfolded over next few years. My first set of hiring was a mixed bag of success and failure. Getting the best people was a challenge as no one wanted to come for an unknown company. However, I was successful in collecting a good team who then helped me shape up one of the most successful IT captives in India for Sears. In seven years of my journey with Sears and having closely interacted with every stakeholder, we learned some invaluable insights. Such insights and knowledge were only possible for my team and me because we did everything with an open mind and did not have any bias to start with. We experimented, failed and excelled in those simple things that matter a lot for investing companies. We could see significant opportunities being openly ignored and missed while in some cases the benefits were way beyond expectations. The outcome was an average of hits and misses that was possible only due to the effort of leadership and experienced individuals from both sides of the geography and was termed as ‘Highly Successful,' but I knew that the benefits could have been much more.

Why we invested in ScrumStart

Taking only the savings as the key benefit, Sears saved much more than what they planned from their Captive. The ROI started from the first year itself and grew leaps and bounds every year. It was in later years that we realized that it is not just the cost that matters, but it is just the beginning. The benefits that a captive can give to their investing companies are way beyond the cost advantage, but the only handful of IT captives can even think beyond cost advantage. Most of the companies struggle with their captive at every step, and most do not even start that in favor of the existing IT vendors who are always skeptical of a captive taking away their opportunity with the client.

In my seven years of captive experience, we realized that third-party IT services model and a Captive model, both have limitations on many key areas, and we did not see many companies getting the best out of both the models due to these fundamental issues. While these issues appear simple, they are highly complex to solve, but if cracked, accelerates the benefits beyond any known benefit either of these two models have been able to generate so far in general.

When I started SRKay, a Private Equity investing firm in 2016, my first investment was in ScrumStart, a venture dedicated to helping companies get best out of their vision of captives and came with a ‘ScrumStart Virtual Captive model' that since have been highly successful. ScrumStart became profitable right in the first year and had grown fast since then.

In the upcoming blogs, I will detail out on what ScrumStart Virtual captive has done and why it can be a game changer for companies looking to accelerate their benefits with captive vision.