OfficeTiger, LLC - Company Profile, Information, Business Description, History, Background Information on OfficeTiger, LLC



475 5th Avenue, 16th Floor
New York, New York 10016
U.S.A.

Company Perspectives:

OfficeTiger's vision is to change the way the world does business by leading the new generation of industry-focused, judgment-based Busine ss Process Outsourcing (BPO) solutions.

History of OfficeTiger, LLC

OfficeTiger, LLC is a New York City-based global provider of business support services, with the work done in India and Sri Lanka. Althoug h a practitioner of offshore outsourcing, OfficeTiger does not simply transfer high-paying jobs from the United States and the United King dom to India and Sri Lanka as a way to save money for its clients. Ra ther, the firm tries to provide what it calls judgment-based Business Process Outsourcing (BPO) solutions. Indian workers, well educated a nd highly skilled, provide support to Western employees who can conce ntrate on higher value tasks and enhance their productivity. OfficeTi ger offers a variety of support services, including document preparat ion and desktop publishing, market research, financial analysis, and a full range of accounting functions. Clients include investment bank s, law offices, and consulting and accounting firms. OfficeTiger's In dia facility operates 24 hours a day, structured to provide quick tur naround on client requests. In addition to its corporate headquarters in New York, OfficeTiger maintains offices in London and Frankfurt, Germany. The company is run by co-CEOs Randolph Altschuler and Joseph Sigelman. Altschuler operates out of New York, while Sigelman spends most of his time in Chennai, India, where the firm maintains a pair of large offshore services facilities.

Cofounders College Friends in the 1990s

OfficeTiger was founded by Altschuler and Sigelman, both raised in Ne w York City and accepted at Princeton University. As freshmen they me t in the cafeteria and became best friends, and later went on to Harv ard Business School together. Afterward they both landed high-paying jobs on Wall Street with investment banks, Altschuler at Blackstone G roup Inc. and Sigelman with Goldman, Sachs & Co., working in Lond on. Late one night in 1999 Sigelman was working on a PowerPoint prese ntation and growing increasingly frustrated with the work coming back from the typing pool, fraught with fresh errors every time it was re turned. Sigelman called Altschuler in New York and discovered that hi s friend was enduring the same kind of clerical horrors. It was clear that typing pool employees and temps lacked the drive and focus nece ssary to turn out the kind of work business people required. The two men in their mid-20s felt that there must be a better way to provide business support services and a more dedicated source of labor than a rtists and out-of-work actors. Sigelman thought of India, which he ha d visited with his family as a child. He had always been impressed wi th the country. "You met people in factories or running the elevator who had the intelligence and spirit to do so much more," he told Kate Boo of The New Yorker. "We thought, why not release that tale nt?"

Founders Quitting High-Paying Jobs in the Late 1990s

Sigelman and Altschuler decided to launch a business to provide word processing to financial services firms on an outsourced basis, drawin g on the labor that India had to offer at inexpensive rates. It was a ll made possible by contemporary technology that allowed people in Ne w York and India to work together on a real-time basis. "No one thoug ht it was a viable idea," Sigelman told Business Week, "but we decided to do it anyway." They quit their jobs in 1999 and spent sev eral months working up a business plan. They named their start-up com pany OfficeTiger after the Princeton mascot, the Tiger, and lined up $18 million in funding from U.K. venture capital funds Mountgrang e Capital and Elwin Capital.

Since Altschuler was married, it was decided that he would remain in New York to build up the sales operations, while Sigelman would spend most of his time in India. In the beginning, however, both men came to India to establish the outsourcing operation. They had to negotiat e a difficult course in obtaining regulatory approval in India, steer ing clear of corrupt officials, before finally setting up in the city of Madras with its high concentration of talent. OfficeTiger also re ceived a ten-year "tax holiday" from the Indian government.

The company's first facility was just a sheet-metal shed. Its first s ervice line was Enterprise Document Services, offering to do PowerPoi nt presentations for investment banks and other firms and word proces sing for law firms. "We had virtually no business," Altschuler told The New Yorker. "At the time people thought it was crazy to be sending work to India. So we had a hundred people sitting in a room a nd we'd get one fax a day to type. When the fax came through, it was like a five-alarm fire. ..." Altschuler returned home to New York, op ened an office above a Dunkin' Donuts, and began pestering former Wal l Street colleagues to give their service a try.



As work began to come in and the Indian operation found its feet and performed well, OfficeTiger attracted repeat business. In a case stud y written for WorldTrade Executive Inc., Altschuler recalled, "We beg an to see a lot more opportunities. Bankers started saying, 'You know , I'd like to really understand some background on the companies that I'm going to be talking about in this presentation. Can you help me do some research on that?'" After OfficeTiger established itself in r esearch, clients asked if the firm could also provide some financial analysis. In this incremental way, OfficeTiger added more demanding s ervices. "We were really the first company that was focused on what w e call 'judgment dependent services,'" Altschuler explained. "So it w asn't just inputting a spreadsheet or doing a rote transactional task , but the professional had to step back and think, 'What is the appro priate thing for me to do here?' Even in a PowerPoint presentation, t he customers come to me and they've got an idea what they're looking for, but they're looking for me to really make the call."

OfficeTiger began to add staff at a rapid clip, hiring employees a te am at a time to serve clients as they contracted services. The compan y established offices in a shopping mall in Chennai, and had no diffi culty in attracting highly skilled people to occupy bank after bank o f cubicles. According to The New Yorker, the company sometimes received "fifteen hundred applicants a day, many of them accompanied by parents who pray as their sons and daughters take one test after another in the hope of earning an interview." Only a small percentage of applicants, the cream of the crop, would find employment. Sigelma n and Altschuler had one simple rule of thumb: Hire people smarter th an themselves. OfficeTiger paid well above the market rate by Indian standards, about $1,000 a month, but a far cry from the $8,00 0 a month some of their employees might earn doing the same kind of j udgment dependent work on Wall Street. It was that price difference a s well as the work ethic of Indians, who were committed to performing even the most mundane task with "full sincerity," as the locals call ed it, that combined to make OfficeTiger such an immediate success in New York and London. In Chennai OfficeTiger quickly achieved a statu s afforded few employers. According to The New Yorker, "Worker s were so pleased by their affiliation that they put it on their wedd ing invitations, just below their fathers' names."

There were some cultural miscommunications to smooth out along the wa y. To motivate the staff, Sigelman made the mistake of offering on-th e-spot payments, not realizing that the employees considered it to be demeaning to accept wads of cash in front of others. Sigelman also h ad to contend with life at the hotel where he resided. He enjoyed a g reat deal of success recruiting employees from the reception desk, bu t had less luck, according to The New Yorker, in reprogramming "the hotel coffee-shop pianist, who, having realized that Joe is per haps the only Jew in Chennai, routinely serenades him with 'Have Nagi la' when he sits down to lunch, even when his companion is a Kuwaiti investor." There was no compromise in terms of dress at the office, h owever. Only Western business attire was accepted. Women were not all owed to wear saris, and men wore ties, sometimes passed from one shif t to the next, since not everyone owned one.

Because OfficeTiger landed the business of competing firms it had to go to great lengths to make sure teams assigned to handle their busin ess were kept separate. Regardless, security issues were a major conc ern of all clients. The first step in providing security was the impl ementation of a thorough screening procedure, which was just as unfor giving as the testing process in weeding out unacceptable employees. In the end less than 2 percent of applicants found employment at Offi ceTiger. When they reported to work, it was to a single point of entr y, manned by guards who checked each employee. No personal belongings were allowed inside, and women were allowed to bring in a handbag on ly. Swipe cards were used to control access within the facility. In a ddition, if a client required, OfficeTiger maintained a secured envir onment within its secured environment, with more guards on duty to ma n another single point of access and a second set of swipe cards requ ired. In addition, computer drives were locked, Internet access limit ed to people working directly with clients, and two levels of confide ntiality agreements put in place, between OfficeTiger and its employe es and between clients and OfficeTiger personnel.

Acquiring Devonshire in 2004

By 2004 OfficeTiger was generating annual revenues of $20 million and adding employees at a rapid pace. The company received an influx of cash in June 2004, raising $50 million from private equity fi rm Francisco Partners and earmarking the money for acquisitions to ex pand the company's range of service. Some of that money was soon put to use in the October 2004 acquisition of Devonshire, a British outso urcing company with some 200 clients in the financial, legal, consult ing, design, and pharmaceutical fields. The funds also were used to e stablish an operation in Colombo, Sri Lanka, an effort to achieve geo political risk diversification. In addition, OfficeTiger expanded its Indian operation, opening a new 65,000-square-foot, six-floor dedica ted building to supplement the original location in Chennai.

OfficeTiger continued to pursue an expansion strategy in 2005, comple ting a pair of significant acquisitions. In a deal valued between &#3 6;25 million and $30 million, OfficeTiger bought General Motors A cceptance Corporation Commercial Services' Atlanta-based MortgageRamp Inc., the addition of which was expected to increase sales by about 35 percent and add greatly to the firm's real estate back-office busi ness. Some of OfficeTiger's clients were already involved in the equi ty side of real estate, but MortgageRamp brought with it clients from the debt side of the industry as well. Services to this sector were expected to begin shifting overseas, and OfficeTiger was well positio ned to reap a large portion of that business. The increase in size al so set up OfficeTiger to make a public offering of stock, something A ltschuler and Sigelman had dismissed in the past. Moreover, the Mortg ageRamp acquisition was important to the future of OfficeTiger becaus e it was becoming increasingly apparent that the outsourcing industry was ripe for a shakeout and size would not matter a great deal. Offi ceTiger hoped to be one of the companies that emerged from the pack. It also was looking to new countries to establish operations and impr ove its geographic diversity, eyeing the Philippines and possibly Eas tern Europe. "It's not about India," Altschuler told Securities In dustry News. "It's about global sourcing."

Principal Subsidiaries: Devonshire; MortgageRamp Inc.

Principal Competitors: WNS Global Services; ICICI OneSource Lt d.

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