Fast Lane
Making IT work
How Sarita Khatri steers WOW Corp. at high speed
By Ray Marano
Smart Business | March 2006
When Sarita Khatri and her partner launched WOW Corp. in 2002, there was no shortage of admonitions from friends and professional associates about the wisdom of starting a business in a down market for the IT industry.
“Everyone was saying that this is not the time to start a business, and we were saying, ‘Why not take a chance?’” says Khatri, WOW’s CEO.
WOW, an acronym for Women of the World, provides consultants for IT projects and employs about 275 people; approximately 100 of them are in-house employees.
Khatri, her initial partner, Denice Stokes, and two other partners who have since come aboard have hushed the doubters. WOW posted $26 million in revenue in 2005, and Khatri anticipates hitting the $40 million mark this year.
With backgrounds in IT recruiting and early success in landing Deloitte Consulting as its first client through prior connections, finding projects wasn’t an issue at the outset. Khatri’s biggest hurdle was convincing IT consultants to sign on with WOW rather than with one of the large consulting companies.
Now, she says, WOW is challenged to create an organizational structure that will support a much larger and growing company.
Smart Business spoke with Khatri how she faces the challenges of growth at WOW.
How did you establish WOW in a down market?
The biggest challenge was to show our capabilities compared to other vendors that were available and that they had in place. We were a four-person company, so we definitely had to work hard to prove ourselves.
The year we started was a down market. The good thing was, you could find people at good rates, and that’s what the clients wanted. Our strategy was, we always looked for quality candidates at a low rate to keep our margins low and tried to present the candidates to the client in a very short turnaround.
We were working 24/7; our eyes were always on our laptops. At the time, there were eight vendors serving Deloitte, so we had to find our place among them. We were able to do that because we screened each and every candidate.
Basically, working hard and working on the requirements very closely and keeping our margins low and being there at all times for our customers was the strategy behind our success.
How did the IT slowdown work in your favor?
The quality people were out of jobs, and they were willing to work at a rate that they wouldn’t have worked for before, when the market was hot. One of our strategies was to find people who were local, so we didn’t have the overhead of travel.
We always looked for candidates who were local to the region where the customer was. That really helped us, and because there were so many people out of jobs, we really had success in catching that talent.
What was the most difficult challenge of fast growth?
The hardest part in the beginning, I would say, was convincing people to come on board with us, because we were a start-up. We didn’t have any problem hiring in-house employees for permanent jobs, but contractors, they would say, why should they go with us, why wouldn’t they go with a bigger company? So we had to convince them to come with us.
For the first couple of months, it was hard. They wouldn’t believe that we were a vendor for Deloitte.
How did you persuade consultants to work for you?
When the requirement comes out for a project, there are eight other competitors sitting there. If we were the first one to call them, it’s easier to convince them.
If somebody has already talked to them and they know that company, it was harder for us to convince them because we were a start-up company. We always wanted to be able to call the best candidate first.
So basically, you had to be on it all the time. You build a relationship with the candidates, and you keep in contact with them often so you are top of mind with them. We built a database of candidates, and when we got the requirements, we always had that database in front of us.
How has your business model changed since you started WOW?
When we started, we didn’t want to take on the overhead of hiring employees.
Last year was a big year for us, and our strategy was to hire more employees and not rely as much on contractors. We wanted to retain the talent on our payroll all the time. So we had to change our strategy.
How will you continue to grow WOW?
As the company gets bigger, there’s a need to build an organizational structure to support it. Every day, we learn new things. Our focus this year is fully building out our sales and marketing effort.
To keep the organization effective and efficient as it was when we had no overhead, we have built up our global business center in India to keep our costs down so we can still present candidates at the kinds of margins that we used to. We want to be as efficient and effective as we were in 2002.
How to reach: WOW Corp., www.wowcorp.com
