Data for Dollars | Rajesh Kalidindi from LevaData

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Rajesh Kalidindi 0:00
What happens is these teams are still using Excel and internal tools to manage such massive amounts of spend. And and that is why that is a massive opportunity in front of us.

Alexander Ferguson 0:19
Welcome, everyone to UpTech Report UpTech Report is sponsored by TeraLeap Learn how to leverage the power of video at teraleap.io. This is our Applied Tech series. I’m very excited to be joined by our guest. Today I am joined by Rajesh Kalidindi who’s based in Austin, Texas. He’s the CEO and founder of Levadata. Your HQ is based in San Jose, California. But I’m excited to have you on welcome Rajesh, good to have you on.

Rajesh Kalidindi 0:42
Thank you, it’s great to be here.

Alexander Ferguson 0:45
Now your product is a cognitive supply management platform. So for those out there, if you’re a leader of supply chain, procurement, or purchasing operations, this might be an intriguing platform you’re gonna want to check out. Now on your site, you state the AI powered system is on a constant search for opportunities to reduce costs, mitigate risk with built in tools for quick collaboration and decisive action. Help me understand just when you started, what was the problem that you saw and set out to solve?

Rajesh Kalidindi 1:16
Prior to starting lemonade, I worked in a large enterprise with one of the best supply chain run organization where I got trained for over eight years. And during that experience, it was very clear that it didn’t matter how much leverage you had in the market, or what great talent you had in the market, you would always leave money on the table or expose yourself to risk. And the reason for that is very simple, which is procurement teams which manage trillions of dollars out there, they are managing massive spend complexity, lots of suppliers, lots of parts to keep on top off, the market volatility does not make it easy, right things are changing all the time with our supplier shutting down some raw material pricing is going up, etc in the global environment that we see, which is pretty fluid. And what happens is these teams are still using Excel and internal tools to manage such massive amounts of spend. And that is why that is a massive opportunity in front of us to really change the game in performance both as a gross margin improvement with by reducing cost savings in a much more scalable basis. And secondly, also reduce risk with much more agility that we can bring to the table. And so those two things are especially pertinent today, when the whole pandemic situation what we’ve seen supply chains thrown all over the map in terms of disarray. And this is accelerating our solution and how we bring value to the customers every day,

Alexander Ferguson 2:42
the quantity of data that’s being created is only increasing. And thankfully, the access to that data is becoming more readily available. But it makes it that much more difficult to serve through it, I was looking at one of your case studies for Fitbit and where he was sharing in there, when you don’t have your people bogged down in the data, you actually get a huge amount of productivity. So help me understand how the technology then has developed and grown and how it works to go from Excel spreadsheets or however they would be using it to changing maybe even the behavior how you go around reviewing your supply chain.

Rajesh Kalidindi 3:15
So if you think about our typical procurement account personnel procurement leader or an individual procurement buyer, these folks spend a lot of time actually searching for information, whether it’s internally, you know, from different systems, or looking at multiple types of reports and figuring out what’s important, etc. And hearing from suppliers and so on. But imagine trying to do that across dozens of suppliers and you know, 10s of 1000s of bucks. So guess what happens, they’re going to focus their efforts on a small set of you know, high value items and hope for the best. And so here’s the team that was very focused on using Excel and all this traditional way of doing things. And what we were able to do is first systemize that base capability on top of it, build them a capability that allows them to get market intelligence at, you know, high velocity, where it’s a where the system is providing insights on hey, here’s a new opportunity that you can look at, or here’s a risk that’s coming down your way. And so now by seeing that information, not just saying, Hey, here’s here’s something I should be working on. But system the system guides them on what the potential impact is, what should they be doing about it and help you take action within the system by working with the suppliers through an RFQ process. So the ability to go quote and connect and collaborate with suppliers after making a decision again, compresses the time from the time you get the insight to taking action, building agility into the program. So you’re seeing more performance, and you’re also seeing more agility come into play as a result of this capability, which really took the team to the next level and punching above it with some of the larger players in their market space.

Alexander Ferguson 4:58
A lot of this type of stuff ability to review and be able to reduce costs when it comes to supply chain is being done already by other companies, but it’s more of a service based not using technology and platform. Do I have that? Correct?

Rajesh Kalidindi 5:11
That’s an astute observation. Yes.

Alexander Ferguson 5:14
What’s the fundamental change then in in a behavior of how it has been performed? Or it could be solved compared to using technology and AI powered solution?

Rajesh Kalidindi 5:26
Yeah, I think it boils down to the amount of information that you can process, the speed at which you can get that information and make decisions on it. So when you have services and outside firms helping you it’s a project, but then they’re gone after a period of time, and then you’re back to doing the things that you have been done. And so the idea is, how do you build systemic capability that is always on and it’s continuous, where you’re able to get this information at scale, but then not just overwhelming you with it, but telling you where you have to focus on at any point in time to take specific action and get results that that really move the needle. And so that capability is something that we drive with our solution, which is different from the traditional engagement with service providers.

Alexander Ferguson 6:15
Big difference of one time project, we’ll look at how we can save money here. But then you’re done versus always on always looking for opportunities to save money, is this, effectively a platform and a dashboard that the internal VP of operations or procurement is looking at it as a resource that they have available all the time?

Rajesh Kalidindi 6:34
Absolutely. And the beauty of it, when we started the company, we were really focused around this whole democratization concept, which is how do we democratize this not this at the leadership level, but every single person in the organization has access to the same information, insights and decision making capability associated with it, right. And so they’re empowered to essentially then those faster decisions and smarter decisions. As a result,

Alexander Ferguson 7:00
information is easily accessible, the right information, the right decisions and the data to back it up by anyone in the company. So less time for conversation more time for action. Exactly. Now, for those folks who want to be able to use this, is this then a typical SaaS business model? Is that a yearly subscription? Is it based on the percentage saved? How does your business model work?

Rajesh Kalidindi 7:21
Yeah, our standard engagement is essentially a subscription based model with yearly subscription. And typically, our customers with three year contracts or more. But the idea is because we are so I would say sure about our value and what we bring to the table every day, we also have another mechanism where we have a pay for performance model. So in that specific way, we stand behind what value we get. And we get paid based on that incremental value generated by by the system. And so we’ve had very successful implementations associated with that. And guess what most companies turn back and essentially go back to subscription, because they’re being as a lot more as they do this pay for performance to gain sharing, etc,

Alexander Ferguson 8:07
you feel strongly and that’s why, you know, you can can save now, to help me understand and our viewers, what’s the typical size of company and data points so that they know if someone is they are that type of company and say, Yes, I can use your service.

Rajesh Kalidindi 8:22
Yeah, most of our customers are having more than $500 million in spent, right. And so what we have done initially with that approach is essentially to get more data onto the platform, more suppliers onto the platform or parts into the platform, etc. And there’s a concept of community that we have built out across our customers. And so we have $95 billion of spend on our platform today. And our goal is in five years to get to a trillion dollars in span, that proprietary set of insights that you get out there truly drives a lot of the differentiation, you know, back to the network and the community that we support. So So essentially, we are looking at how we help them through that journey, bring the power of many into the mix, and essentially, you know, help them punchable their way.

Alexander Ferguson 9:13
Last question for you, for someone in this role of VP of procurement or global operations, what’s the word of wisdom that you can provide for them in the job and the problems that they have to deal with day to day day in and day

Rajesh Kalidindi 9:24
out? I think the procurement folks are those heroes, that that are usually unknown in their companies, because they they work on the frontlines and you know, especially in the pandemic as well trying to keep the supply going. And so often they’re doing the diving catches, they’re, you know, working crazy hours, they’re in a war room all the time, you know, working two things in and I would ask them to no matter how much how busy they are, it’s always important to kind of take a step back and see if there are ways in which they can really accelerate innovation, accelerate ways in which they can make teams a lot more agile a lot more efficient in what they do. So they’re not working on the tactical aspects of it, but do the strategic work. And that’s where, you know, companies like ours help in enabling that digital transformation, that it is not a threat. But it is an augmentation. It is a way to really elevate the procurement teams today.

Alexander Ferguson 10:22
Thank you so much rich for helping us get small insight into what you’re doing at lever data. For those that want to learn more, go over to levadata.com. And you’ll be able to explore more of the product to be able to get a demo and be able to get some some great insight. Stick around for part two of our discussion though, where we’ll be able to hear a bit more Rajesh’s background, his story, and some lessons learned as he’s built this company over the past six years. Thanks again, everyone, and we’ll see you on the next episode. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.

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