Recovery audit company PRGX to service Indian firms

PRGX, the world's largest recovery audit company, plans to begin servicing Indian companies by the end of the year. The company, which set up an office in Pune last year to support its global clients, is expected to have “a market capability in India by the end of the year,” PRGX CEO, Mr Romil Bahl, told Business Line .

“The Indian retail market is a core market for us,” Mr Bahl, the former managing director of Infosys Consulting, the Bangalore software giant's US consulting subsidiary, said at a meeting in London this week. Atlanta, Georgia-based PRGX's business is largely a recovery audit company, “essentially analysing procure- to-pay transactions for client companies that have a large, and complex error-prone procurement environment, such as retailers or health insurers. The company, which works on a commission only basis, recovers those payments and typically recovers around 1 to 2 per cent of EBITDA for a company from the previous year the “money which goes straight to the bottom line,” says Mr Bahl, who joined the company as CEO in 2009.

Analytics and advice

The company also carries out analytics and advice for its clients. “This is a business driven by volume and complexity,” says Mr Bahl, explaining that the company focuses on the world's largest “and therefore most complex” firms. It has the world-largest retailer, Wal-Mart, among its clients. PRGX has found that while one company may be more error-prone than another, the rate of recovery has remained consistently at 0.1 per cent of sales over the past couple of decades. “Clients get it right 99.9 per cent of the time, but the average-sized retailer may have 10 to 12 million deals in any one year.”

Since taking over then-unprofitable PRGX, Mr Bahl has instituted a number of big changes, started by his personal tour of all the company's clients to learn more about what it was doing wrong and right.

“The theme that resonated was that they wanted us to do more with the data we have more insight and access to data than any other supplier — we have insights into every dollar they spend and can get to a line by line level of detail, which they often done have themselves ¦surely we could do more with it,” says Mr Bahl. The company has branched out into more services, including what it calls “profit discovery” — mining company data to find ways in which procurement and other processes could be done more profitability, as well as fraud detection. However, the company is intent on keeping on developing new products for its clients “hence the innovation unit set up in Pune, which along with its analytics department it plans to gradually expand.”

Centralising some of the analytic and other services to India has meant the company has been able to dramatically cut costs, raising the number of companies it is capable of serving from around 1,000 to 5,000.

That outsourcing component will continue to grow he says, with the company is considering teaming up with Indian BPO firms that service its international clients.

“There is so much focus on customer behaviour and what we can glean from buying patterns, but there has been nothing like that focus on business to business services” so we have a pretty unique opportunity.

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