Bengaluru: The covid-19 pandemic has created new opportunities for analytics and automation startups that have witnessed a growth in business, as clients focus on cutting costs and improving productivity amid hit to their businesses.
In the past four years, about 90% of enterprises have experienced a turn that upset normal operations, and organisations with a higher adoption rate of contemporary technologies including artificial intelligence (AI) and robotic process automation (RPA) will have a competitive advantage, a Gartner report has said.
Despite analytics including AI being part of “discretionary spend”, there has been an increase in demand for such solutions during the current downturn.
“This was not the case during the recession of 2008-09,” said Srikanth Velamakanni, co-founder and group chief executive, Fractal Analytics. “AI is still discretionary but most of our clients in the last three months have come up to us and said that though it is discretionary, it is mission critical. It is super important to us and we are actually going to expand,” said Velamakanni.
“We have grown around 25% year-on-year in Q1 FY20.”
Analytics startup Tredence, founded by former MuSigma executives, has also seen an uptick in business as customers look at ways to drastically reduce costs, chase demand and prepare to bounce back.
“There has been an increase in new deals this year much of which is inspired by the covid-19 downturn. So far this year, we have acquired as many new clients as we had in the whole of last year,” said Shashank Dubey, co-founder and chief analytics officer, Tredence.
Automation Anywhere, a niche player in RPA, believes the slowdown is an opportunity for companies like them. According to their recent survey of over 5,000 senior executives mostly from India, over 50% of them are expected to invest in intelligent automation this fiscal as part of their digital transformation mandate.
“Covid-19 has created the perfect storm for organisations to accelerate digital transformation and to embrace intelligent automation, combining RPA, AI, machine learning and analytics,” said Milan Sheth, executive vice president (IMEA), Automation Anywhere.
‘We are witnessing a surge in interest for intelligent automation among our existing customers as well as we are onboarding new customers across industry verticals. The advantage of intelligent automation is that organisations can deploy software bots to handle many repetitive tasks freeing up human workers to focus on innovation,” Sheth said.
RPA startup UiPath believes automation has come out as a “silver lining” for various enterprises in the last 3-4 months. “We have seen 20% growth y-o-y since February. This is much higher than our last quarter or even the same quarter last year,” said Manish Bharti, president, UiPath India & South Asia.
While the demand for analytics and automation has been seen across verticals, these startups are witnessing an increased interest from retail, consumer packaged goods (CPG), fitness & healthcare, and the banking, financial services & insurance (BFSI) segments. While the BFSI sector is using automation to supplement processes for high-volume tasks, the healthcare sector is turning to automation to reduce paper trails in services like insurance.
The slowdown has also forced firms to re-think their business models. While these analytics startups are not seeing any pricing pressure, customers are demanding pricing models that are more outcome-based and transparent.
“Our clients are showing great openness to take brave bets as long as we are ready to engage them with the outcome based revenue models,” said Dubey.