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Episode 124 · Enterprise · 51 min

Cost is the part you can control

Roughly 80% of any enterprise business process lives in documents, emails, contracts and approval trails that no ERP ever touched. That, Avaali argues, is where the margin is hiding. Eleven years and 300-plus large enterprises later the pitch is deliberately narrow: only the expense side of the P&L, only unstructured content, 40–70% cycle-time cuts. One East African FMCG put it in writing two years after go-live: 70% off its master-data process.

Data & digitisationGCCs & servicesSaaS & enterprise
SK
Srividya Kannan
Founder, Avaali · with Vishal Krishna
Cost is the part you can control · episode thumbnail
50:37
Said in this episode
▶ 2:45
80%
Share of a business process that is unstructured content
Her estimate, repeated later in the episode for operational processes specifically: the part that ERP, CRM and HRMS deployments never touched.
▶ 10:16
40–70%
Cycle-time and cost reduction Avaali claims to have delivered
Stated as the outcome range across 300-plus large enterprises; quoted twice on air, once as 40–60% before she corrects to 40–70%.
▶ 16:18
70%
Master-data cycle-time cut at the East Africa FMCG
From a written client testimonial at a September 2020 governance review, roughly two years after the mid-2018 go-live; the same review recorded 40% off the due-payment approval process.
▶ 35:46
10 → 4
People needed to process 60,000+ invoices a month
Her worked example of 40% cycle-time reduction: a ten-day, ten-person invoice process run by four, with the rest repurposed to more intelligent activities.
▶ 33:29
4–6 months
Average sales cycle to a signed deal
Followed by engagements of six to eighteen months depending on process depth; the consulting-led GBS builds run 12 to 36 months.
▶ 32:24
15+
Captive GBS operations Avaali has helped build
Of varying maturity across industry segments. This is the network she draws on to introduce incoming companies to GBS leadership, since Avaali is not a staffing firm.
The brief

The argument in sixty seconds

Srividya Kannan's claim is that enterprise software has been buying down the wrong problem. Structured data (the ERP, the CRM, the HRMS) gets bought, installed and audited, but roughly 80% of any business process actually sits in documents, emails, invoices, contracts and approval annotations with no audit trail, knowledge she calls a core enterprise asset that is somewhere lost in transit. So Avaali stays deliberately narrow: only the expense side of the P&L, meaning sourcing, procurement, supply chain, HR, contracts, AP and AR. Never the revenue side, never manufacturing, never the structured-data stack, on the argument that 80% of an operational process is identical across industries, which is how a 300-person firm serves the same accounts a 10,000-seat BPO would. The delivered numbers she cites are 40–70% cycle-time and cost reduction across 300-plus large enterprises; the East African FMCG that took the whole operating model at scale on day one sent a written testimonial two years after go-live claiming 40% off due-payment approvals and 70% off master data. Her second claim is that competition has stopped mattering: put every tier-one SI, boutique and niche player together and the ecosystem still falls short of hands. The stakes sit in the third. Growth is on every board's agenda but nobody controls it, while cost sits inside your own house. If India's captive GBS wave really is the next decade, the binding constraint is not talent or real estate but adoption, because a workforce that reads automation as cannibalisation will quietly sabotage it, as it once did with SAP.

Worth your time if you are

CFOs who cannot explain their own operational expense lines
Shared-services leaders standing up a captive GBS in India
Enterprise operators whose last rollout went live and got ignored
Procurement and supply-chain heads drowning in PDFs and email approvals
Founders selling a deliberately narrow service to very large buyers
Episode map

Where the conversation travels

Every block is a chapter, coloured by what it's about. Click any of it to jump straight to that minute on YouTube.

010:00–4:08 · Breath of life, and the 80% nobody automated024:08–8:32 · Three years that outran a whole career038:32–10:34 · Outcomes first, vocabulary later0410:34–13:15 · East Africa, edible oils, all-in on day one0513:15–16:33 · 40% and 70%, in writing, two years later0616:33–19:40 · Deciding and going live are table stakes0719:40–21:56 · From 2019's chatbot demos to ChatGPT0821:56–24:50 · Falling short of hands, not competitors24:50–26:23 · Invoices, JDs and the missing audit trail1026:23–29:37 · Why the captives are coming to India1129:37–33:13 · Evangelising the buyer on the borderline1233:13–34:59 · Four to six months to sign, then years1334:59–38:30 · Sixty thousand invoices, ten people to four1438:30–40:36 · Seven to fifteen stakeholders per account1540:36–44:12 · Resilience is a single source of truth1644:12–50:37 · Purpose, Velocious, and The Artist's Way0:0010:0020:0030:0040:0050:0050:37
Data & digitisationGCCs & servicesSaaS & enterpriseLeadership & orgAI & machine learningSales, GTM & growth
01Breath of life, and the 80% nobody automated 0:00 Avaali is named for the Sanskrit word for breath of life and logo-ed with a butterfly and a rose, but its thesis is unromantic. Large enterprises invest heavily in technology while the unstructured content and workflows that make up 80% of any business process stay manual, so Avaali automates that and only that, aimed squarely at the expense side of the P&L. 02Three years that outran a whole career 4:08 Eleven years in, Srividya says the last three taught her more than her entire prior career: the overnight shift to remote work, the resilience question it exposed, and a pace of change where GPT-4 followed GPT-3 fast enough to reset what is possible, dragging privacy, hallucination, deepfakes and authenticity along with it. 03Outcomes first, vocabulary later 8:32 Asked about transformation, she refuses the word (decide the outcome before naming the programme) and reframes Avaali's work as cost reduction and margin improvement on operational processes, delivering 40–70% cycle-time and cost reduction for 300-plus large enterprises. 04East Africa, edible oils, all-in on day one 10:34 The GBS pillar in practice: the largest FMCG in East Africa, holding 52% share in edible oils and soaps, made a board-led decision to adopt the captive operating model at scale from day one rather than piecemeal, with Avaali consulting on the roadmap for processes executed inconsistently across locations. 0540% and 70%, in writing, two years later 13:15 Avaali refuses to hand over a blueprint and leave, staying through 12-to-36-month engagements; the FMCG went live in mid-2018 and by a September 2020 governance review had put in writing a 40% cut in due-payment approvals and 70% on master data. 06Deciding and going live are table stakes 16:33 The investment decision and the go-live are the easy halves; the hard half is adoption inside organisations that are decades old, where users who read the tool as a threat to their jobs will sabotage it, as they did with SAP in Coimbatore's automotive cluster. That is why messaging and a visible win must start on day one. 07From 2019's chatbot demos to ChatGPT 19:40 Vishal recalls retail-tech chatbots that could barely answer a regional sales question before generative models blew the category open; her counterweight is data (where it sits, what it was trained on, whether it carries bias) and the fear of job loss from teams that have run the same process for decades. 08Falling short of hands, not competitors 21:56 She calls the competition question almost redundant (every tier-one, tier-two and boutique SI put together still cannot staff the opportunity) and defines Avaali by what it refuses: no revenue-side work, no e-commerce or customer experience, no IoT or Industry 4.0, no structured-data stack. 09Invoices, JDs and the missing audit trail 24:50 Unstructured content spelled out: PDFs, Word files, emails, contracts, vendor invoices, travel expenses, JDs, resumes, interview feedback, workflow annotations with no audit trail. Then the question underneath it: can a business process itself be a source of competitive advantage, delivered by 300 people rather than a 10,000-seat BPO. 10Why the captives are coming to India 26:23 Functional talent, digital talent and cheap space make India a base for captive GBS operations, a model two decades old just as AI is five. The reason it is accelerating now is resilience: growth is a top agenda nobody fully controls, while cost sits inside your own house. 11Evangelising the buyer on the borderline 29:37 Avaali often reaches out first, to companies that know the India story but not where to start, and works through evangelising, workshops and volume analysis into a roadmap it then implements, advising on technology and making leadership introductions from 15-plus captive GBS builds, but explicitly not staffing them. 12Four to six months to sign, then years 33:13 An average sales cycle of four to six months gives way to engagements of six to eighteen months and relationships that keep going (clients signed in 2015 and 2016 are still clients). Avaali can stay industry-agnostic because 80% of an operational process is the same in retail as in manufacturing. 13Sixty thousand invoices, ten people to four 34:59 The arithmetic a CFO signs off on: a process taking ten people ten days to push 60,000-plus invoices a month can run on four, with the rest repurposed to more intelligent work. She backs it with customer-validated case studies, the free Janus user group for source-to-pay, and the Illuminar publication. 14Seven to fifteen stakeholders per account 38:30 Deals run through seven to fifteen stakeholders: CFO for the GBS itself, chief procurement or supply-chain officer for the functional processes. In the 300-to-350-million-dollar revenue band, she says, these companies rarely need telling what to do, only getting onto the same page. 15Resilience is a single source of truth 40:36 Her C-suite checklist is unglamorous: find the redundancies, then guarantee that whatever happens the supplier invoice is processed, collections land on time, contracts are visible in their latest version as a single source of truth, and information cannot be tampered with. India is the captive base to run it from. 16Purpose, Velocious, and The Artist's Way 44:12 AI will touch every industry, job and society sooner than anyone expects; she left a finance career that treated her well because purpose fuels the energy, grew the firm from 50-odd people to 300, is building on the Velocious sourcing and supplier-collaboration IP launched in August 2020, and is reading Julia Cameron on creativity while returning to the Upanishads.
Timeline

The arc, briefly

Eleven years of one process firm, and the unstructured 80% of enterprise work it goes after.

1996Deep Blue takes on Kasparov. Srividya dates the point from there to argue that none of this is new: AI has been around five decades and the captive business services model more than two, so what changed recently is pace, not category.
2013Avaali starts, named for breath of life. The bet is that enterprises kept buying structured systems while roughly 80% of any business process stayed in documents, emails, contracts and approval annotations with no audit trail. The pile of unstructured data around 2013 is what raised the question.
2017Fifty to seventy people. The size of the firm when Vishal last met her, seven years before this recording, already refusing the revenue side of the P&L and working only the expense line items.
Mid 2018East Africa goes live all at once. The largest FMCG in the region, holding 52% share in edible oils and soaps, decided at board level to take the captive operating model at scale on day one rather than piece by piece, across procure-to-pay, collections, contracts, vendor onboarding and parts of treasury.
Aug 2020Velocious ships. Avaali's own source-to-pay and supplier-collaboration IP, ERP agnostic, sold on SaaS or on premise, and now running inside several large companies.
Sep 2020The client puts the numbers in writing. At a governance review two years after go-live, the East African FMCG recorded 40% off its due-payment approvals and 70% off master data.
2021-24Three years that outrun a career. In the stretch since the pandemic she says she learned more than in her whole prior career: the overnight move to remote work, the resilience question it exposed, and GPT-4 arriving fast enough behind GPT-3 to reset what is possible.
TodayThree hundred people against a market short of hands. More than 300 large enterprises served with claimed cuts of 40 to 70% in cycle time and cost, over 15 captive centres helped into existence, and her read that every tier-one, boutique and niche integrator put together still cannot staff the work. The binding constraint is adoption: a workforce that reads automation as a threat will quietly sabotage it, as it did with SAP.
Takeaways

Ideas to carry out of this hour

01

The margin is hiding in the unstructured 80%

Enterprises invest heavily in technology, but the unstructured content and workflows inside business processes stay manual: documents, emails, annotations, approvals. Srividya's estimate is that 80% of any business process has an unstructured-content element. That knowledge is an enterprise's core asset and it gets lost in transit because nothing captures it. Avaali's whole model is to automate that lifecycle and stitch it into the ERP, CRM and HRMS, so the end-to-end process delivers cycle-time, cost and margin outcomes rather than a document repository.

▶ 1:59▶ 2:16▶ 2:30
02

Pick the expense side of the P&L and stay there

Her finance background shows in the segmentation: Avaali reads an enterprise P&L and works only the operational expense line items (sourcing, procurement, supply chain, HR, contracts and legal, sales and marketing operations) while deliberately staying out of manufacturing and largely out of R&D and quality. It refuses the revenue side entirely: no customer experience, no e-commerce, no IoT or Industry 4.0, no work on the structured-data stack. The claim is that the narrowness is the moat, deep functional process knowledge plus emerging technology and nothing else.

▶ 3:02▶ 3:18▶ 23:29
03

Outcomes first; 'transformation' is a word for later

Asked directly whether the work is transformation, she declines the term. Using words like digital or transformation before establishing what goals you are supposed to accomplish will not meet the purpose. The frame she substitutes is what outcome are we solving, and only then how we get there. On air the outcome is quantified as 40 to 70% cycle-time and cost reduction across 300-plus large enterprises.

▶ 9:45▶ 10:01▶ 10:16
04

The buyer who goes all-in on day one gets the audited numbers

The largest FMCG in East Africa, with 52% share in edible oils and soaps, made a board-driven decision to adopt the captive operating model at scale immediately rather than piecemeal, a choice she attributes to clarity of thought, while conceding there is no universally right answer since it depends on where an organisation sits in its lifecycle. The scope stretched from procure-to-pay and record-to-report through collections, contracts, vendor onboarding, AP, AR and parts of treasury. Two years after the mid-2018 go-live, a September 2020 governance review produced a written testimonial: 40% off due-payment approvals, 70% off master data.

▶ 11:39▶ 11:58▶ 16:18
05

Going live is table stakes; adoption is the real project

Making the investment decision and going live are, in her words, largely table stakes that many companies still struggle with. The bigger challenge comes when the rubber hits the road and decades-old organisations have to actually change. If users believe a solution will cannibalise their jobs they will sabotage it, the pattern she watched with SAP rollouts in Coimbatore's automotive cluster that were quietly unused six months later. It cannot be carrot and stick weighted to stick: they have to want it, which makes day-one messaging and a visible personal win part of the delivery, not the marketing.

▶ 16:33▶ 17:22▶ 18:23
06

Competition is redundant when the ecosystem is short of hands

She says the question she is asked most, who is your competition, has become almost redundant: take every tier-one, tier-two and tier-three SI, every niche and boutique player, put the whole ecosystem against the opportunity, and it still falls short of hands. Her conclusion is collaboration rather than threat. It is also a quiet argument that consultancies which deliver only a blueprint leave the hard part undone, which is why Avaali stays through implementation, training and change management instead of exiting at the roadmap.

▶ 21:56▶ 22:11▶ 22:43
07

Growth is on every agenda; cost is the part inside your house

The resilience case for captive GBS is control-theoretic rather than patriotic. Growth is one of the top agendas and absolutely important, but geopolitics, wars and shocks mean nobody entirely controls it, whereas cost is determined by how your own processes run, which is inside your home. Make the business process itself a source of competitive advantage and you can deliver it at lower cost with more predictable outcomes and real governance, transparency and visibility, whatever the market outside is doing.

▶ 28:17▶ 28:32▶ 28:49
08

Industry-agnostic works because operational processes are identical

Avaali serves retail, manufacturing and everything between without verticalising, and the reason is structural rather than commercial: 80% of an operational process (accounts payable, invoice-to-pay, HR, contracts) is pretty much the same whatever the industry. That sameness is also what lets 300 people serve accounts a BPO would throw ten thousand at, since technology, not headcount, solves the scaling problem. The productised end of it is Velocious, Avaali's own ERP-agnostic sourcing and supplier-collaboration IP, launched in August 2020 and sold on SaaS or on-premise.

▶ 34:28▶ 34:43▶ 46:54
The numbers, drawn

What the episode measures

Every figure below was said on air, with timestamps included and caveats kept.

What the East Africa captive actually saved

% cycle-time reduction
Due-payment approval40Master data process70
As stated in conversation: figures from a written client testimonial given at a September 2020 governance review, about two years after the mid-2018 go-live.▶ 16:18

How long an enterprise change actually takes

months (upper bound of stated range)
Sales cycle to sign6Implementation phase18Consulting-led GBS36
Upper bounds of the ranges given on air: 4–6 months to sign, 6–18 months to deliver, 12–36 months for the consulting-led captive GBS engagements.▶ 33:29

The 80% no ERP ever touched

what one business process is made of, by her estimate
20% 80% unstructured 20%: ERP, CRM, HRMS. Bought, installed, audited. The 80%, as she spells it out PDFs and Word files Emails Contracts Vendor invoices Travel expenses JDs and resumes Interview feedback Workflow annotations
Her estimate of what sits outside the structured stack, given first for any business process and repeated later for operational ones. The artefacts below the bar are her own list. None of them carries an audit trail, which is why she says the knowledge goes lost in transit.▶ 2:45

Everything Avaali will not do

the expense side only, in the lines she names
In scope Refused outright Sourcing The revenue side Procurement Customer experience Supply chain E-commerce HR IoT and Industry 4.0 Contracts and legal Structured-data stack Sales and marketing ops Manufacturing
She reads an enterprise P&L and works only the operational expense lines, staying largely out of R&D and quality as well. The narrowness is the argument: deep functional process knowledge plus emerging technology, and nothing else.▶ 23:29
Worth keeping

Lines that stay

The amount of learning that I have had in the last three years would be far more than the learning I've had throughout my entire career.

▶ 4:37

The people who are actually users of that solution need to see a purpose in using it, and need to see a win in it for themselves. If they believe this is going to cannibalise their jobs, they're going to sabotage it.

▶ 17:22

I keep getting asked who is your competition, and I think those questions are now almost redundant — if you take all of this ecosystem together and try to address the opportunity there is, we will still be falling short of hands.

▶ 22:11

Growth is important, one of our top agendas, but that's something you can't entirely control. Cost is something within our control, because that's the way our processes are run.

▶ 28:17

We learn from our customers more than we can ever give them back — and that's the reality.

▶ 30:37
Clips that travel

Short on time? Start here

CFOs who cannot explain their own operational expense lines

The 80% no ERP ever touched

The founding observation in three minutes: why enterprise knowledge gets lost in transit, and why Avaali reads the P&L before it reads the tech stack.

1:45 → 4:08 · 2 min ▶ Watch clip
Shared-services leaders standing up a captive GBS in India

East Africa, edible oils, and a board that went all-in

The episode's one fully worked case: 52% market share, scale adoption on day one, and the written testimonial two years later claiming 40% and 70%.

10:34 → 16:33 · 6 min ▶ Watch clip
Enterprise operators whose last rollout went live and got ignored

Why they sabotage the software

The most honest stretch: SAP quietly unused in Coimbatore, why stick beats nothing, and what day-one messaging has to buy from the user.

16:33 → 19:40 · 3 min ▶ Watch clip
Founders selling a deliberately narrow service to very large buyers

Falling short of hands

Competition declared redundant, then the list of everything Avaali refuses to do. A clinic in defining a company by its exclusions.

21:56 → 24:50 · 3 min ▶ Watch clip
Boards weighing an India capability centre

Growth you cannot control, cost you can

The resilience argument for captive GBS in India, and the reframe that makes a back-office programme a board-level agenda item.

26:23 → 29:37 · 3 min ▶ Watch clip
Glossary

The jargon, unpacked

Unstructured content
The documents, emails, PDFs, contracts, invoices, resumes and workflow annotations that carry a business process but live outside the ERP's structured tables. Around 80% of any process, by her estimate.
GBS (Global Business Services)
A consolidated shared-services operating model that runs an enterprise's back-office processes centrally; two decades old as a concept, and the pillar Avaali builds roadmaps for.
Captive GBS / GCC
A shared-services or capability centre the enterprise owns and staffs itself rather than outsourcing. It is the format most companies coming to India now choose, and the one Avaali designs but does not run.
Operational business process
Her term for everything on the expense side of the P&L excluding manufacturing: sourcing, procurement, supply chain, HR, contracts and legal, sales and marketing operations.
Procure-to-pay (P2P) and record-to-report (R2R)
Standard finance process chains: P2P runs from raising a requisition to paying the supplier, R2R from recording transactions to producing financial reports. Both were in scope for the East Africa build.
Master data
The core reference records an enterprise runs on: vendors, materials, customers, cost centres. This is the process where the FMCG client reported a 70% cycle-time cut.
SI (system integrator)
The tier-one to tier-three firms that implement and stitch together enterprise technology. The competitive set she argues is collectively too small for the demand.
Velocious
Avaali's own ERP-agnostic sourcing and supplier-collaboration product, automating the RFI/RFx and procure-to-pay lifecycle; launched August 2020 and sold on SaaS or on-premise.
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