Shankar: Well I have the usual background you'll find in most entrepreneurs. I got an MBA and had my start in IT strategic consulting with Ernst & Young, which got me into the area of re-engineering and business process strategy for IT in the early-1980s. Since then, I've been in different aspects of IT businesses. I started my own company in IT services in the early-1990s and after a couple of attempts decided on a product model in early 2001-2002, which has evolved over the last two or three years. Today I would describe our company as a leader in a new technology that we are creating: business process improvement software, which eventually automates extensive manual activities involved in data gathering, design modeling simulation, measurement, and monitoring of business processes. By automating this, we believe we are saving a significant cost for the enterprises that are spending $100 billion. I would describe my career as something that has come full circle. I started off with business process consulting and am now getting into the business of automating all the stuff that I did early on in my career.

OV: What are your short-term and long-term goals for Epiance?

Shankar: The short-term goal is to build a repeatable, scalable model. The last 18-24 months have been great because customers have found us rather than the other way around. That is good news because we appear to have satisfied some critical need for our customers, but have actually done so without any solid sales organization. My first step is to ensure that we have a product with a repeatable scalable sales model. The second thing that we are focused on in the short-term is to scale our products to an enterprise scale. Our success so far has been at department levels. So it means that we need to focus on scalable architectures that can take our product to the next level of performance as a true enterprise class product. In terms of revenue, I think we are talking about in the next 18 months getting back to 30-40 % net profit level at a higher revenue point.

OV: What are some of the challenges that you had identified when you were starting Epiance, and how have they changed today, given you have moved from a services to a software product?

Shankar: I think they are significantly different at different stages. I would think there are two essential stages. One, as a services business trying to transform our service into a product company, we have learned very critical lessons. It's not very easy because when you have a services model that is yielding revenue, you got paying customers, it's difficult for you to decide what kind of emphasis you can actually place on a product. One of the things we learned is that you never really know when your products are really done because you are constantly generating revenues with your services business. In fact, I think we stumbled at least twice, if not three times, with that so we really made the transition the third time. The biggest problem that you have is getting your organization properly synchronized and organized to sell products. So development of product and delivery of products in terms of quality expected, and the best business model, the kind we used in selling services and the kind of approach we had to use in selling products are completely different. On top of that, we did not realize at that time that we were trying to transform our model from a services to a product model, and our products were not in any of the conventional markets that existed. We were creating a new category. And we did not realize that at the time. One tends to look at examples that you can draw and you don't really have examples. So not having some reference model to look at and having to build it on your own is one of the biggest challenges because you never know what value you've actually gotten to. I think that one of the biggest learning that the company has been through is understanding the kind of value that we are providing our customers--seeing how we make a difference. That inspiration finally transfers itself into concepts of products and approaches to the market that we have to build.

OV: What do you think are the core competencies Epiance has today that make the company successful?

Shankar: Well I think the entire organization is connected by a common vision. If you ask anyone in the company what it is that you guys are doing, you will sense that people have a sense of history. Everyone understands and believes that we are creating a completely new market opportunity. People do understand that we are making a change in the way businesses are run. That has a very positive energy and unifies the entire company to certain common concepts and structures that we think are necessary for building the product. Second, I would think that having the right management team, which we have finally landed ourselves with after a lot of effort. That I think makes the biggest difference because you got people who have been there/done that in terms of scaling products, in terms of building scalable sales models, and so on. That is something that was not apparent to us at all, how one would build these things. These priorities have become critical at this stage of our growth. I think being a products company, you always have the challenge of what it is that you would do now and what it is that you would do at a later point of time and making sure that you have products to feed the market for the current and things to provide as capabilities going forward. Keeping these two balances is the biggest challenge.

OV: What should our readers be looking for from Epiance and from you?

Shankar: What I think one would look for from Epiance would be very clear successes that demonstrate in a way in which business processes can be improved without the kind of expense and time that is consumed by conventional methods. A clear demonstration of how this is done in at least five or six complex large-size projects is a good proof point. I think that people can expect that from us because we can transform the way in which the business of process improvement is done. In terms of what they can expect from me, I think I'm going to basically be focused on scaling the business along with the sales technology and focusing on the corporate culture, on the vision and how it evolves.

OV: What do you think are some of the current trends that will bode success for Epiance?

Shankar: You might have heard IBM's CEO Sam Palmisano in a speech, where he focuses the entire organization at IBM on business process transformation services. He anticipates this as the single largest thing that corporations are going to be focused on and he is betting his entire business on this. That, I think, is a very definite indicator of the kind of approaches and things that other people in the business are talking about. HP is talking about business process improvement; it's not using business process improvement, its using the work of ultra engineering. You hear many companies talking about relative engineering and essentially looking at process improvement for the more holistic point of view. Enterprises are most focused on spending their monies to obtain value from investments they have already made; they're not focused on looking at new enterprise applications or investments they have to make, they're looking at how they can extract value by focusing on processes, given the investments they already laid out. I think these are all very positive trends. Everyone is focused on trying to measure the outcome from IT investments made, and the only way that you can do that is by making sure that companies focus on business processes. Applications have traditionally ignored the human dimension. They have traditionally been unable to understand the business processes that companies actually use.

OV: The economy seems to be improving, but how are you going to execute on selling to your customers? How do you extract dollars from budgets and get the new sales? You mentioned that enterprises aren't spending on new stuff, they want to get more from their investments but there seems to have been this mandate, especially over the last couple of years, of not wanting to spend on anything, even if it's essential to some extent.

Shankar: If you look at all of our current customers, the biggest single thing is that we have saved companies from their current IT budgets, which means that investing in Epiance is not an additional commitment of a dollar, it is actually helping you release additional dollars from your existing IT budget to pursue other IT initiatives. So that is what I think interests corporations and customers about what Epiance has to offer. They have an immediate here-and-now savings on their existing IT budgets because we bring about efficiencies and cost savings in the way in which things are currently done. That is a starting point. Going forward, our proposition grows even stronger because we are talking about how they can really extract all the unrealized value from their past investments. If you go and ask a customer for investment in SAP, less than 30 percent of customers would say they have realized anything close to what they wanted. Less than 10 percent of corporations who invested in Seibel will say that they have realized the expected value. So getting back all that value with very marginal investments is a big thing for corporations. You're talking about successive values that can be derived from an Epiance investment. Initially saving your IT budgets, then extracting unrealized value from the past investments, then looking at process improvements -- aligning it to your corporate objectives and having measurable improvements in your process productivity, in your business productivity, in your business metrics. But I think these are successive improvements that can happen. The first thing we provide in terms of telling them that we can save them cost right away is the efficiencies.

OV: As a CEO, what is the biggest challenge you face today you think?

Shankar: Executing on the vision. It can easily be sidelined by going after numerous opportunities that our products afford. Unfortunately, our products can be applied in so many areas, that our biggest challenges is in choosing the right one. That is dependent upon the kind of vision we are pursuing of automating a significant part of previously manually conducted activities. That means we have to go offer specific opportunities in a specific fashion. Our repeatable scalable model has to line up to this solution, the kind of architecture that we have to build has to line up to the solution, etc. So the biggest challenge I have as a CEO is to make sure that execution lines up to the vision of the opportunity.

OV: Shankar, thank you very much for your time today. I'm sure that our readers will enjoy reading about Epiance and yourself in the upcoming issue of the Outlook Ventures newsletter.

About Epiance: Epiance is the premier provider of business process improvement software solutions. The foundation for Epiance's solutions is Epiplex, the award-winning, patent pending software suite. Epiance software automatically captures ongoing business processes, enabling businesses to rapidly document, measure, analyze, monitor, and improve business-critical processes. With offices in North America and Asia, company global customer base of more than 45 customers includes Merrill Lynch, Morgan Stanley, Aetna, USAA, The Hartford, SBC, Mitsubishi, Toyota, Nippon Steel, Cannon, Microsoft and IBM. For more information, please visit the Epiance website at http://www.epiance.com