OfficeTiger, LLC

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OfficeTiger, LLC

475 5th Avenue, 16th Floor
New York, New York 10016
U.S.A.
Telephone: (212) 629-9275
Fax: (212) 629-9276
Web site: http://www.officetiger.com

Private Company
Incorporated: 1999
Employees: 3,000
Sales: $100 million (2005 est.)
NAIC: 561210 Facilities Support Services

OfficeTiger, LLC is a New York City-based global provider of business support services, with the work done in India and Sri Lanka. Although a practitioner of offshore outsourcing, OfficeTiger does not simply transfer high-paying jobs from the United States and the United Kingdom to India and Sri Lanka as a way to save money for its clients. Rather, the firm tries to provide what it calls judgment-based Business Process Outsourcing (BPO) solutions. Indian workers, well educated and highly skilled, provide support to Western employees who can concentrate on higher value tasks and enhance their productivity. OfficeTiger offers a variety of support services, including document preparation and desktop publishing, market research, financial analysis, and a full range of accounting functions. Clients include investment banks, law offices, and consulting and accounting firms. OfficeTiger's India facility operates 24 hours a day, structured to provide quick turnaround 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 New York City and accepted at Princeton University. As freshmen they met in the cafeteria and became best friends, and later went on to Harvard Business School together. Afterward they both landed high-paying jobs on Wall Street with investment banks, Altschuler at Blackstone Group Inc. and Sigelman with Goldman, Sachs & Co., working in London. Late one night in 1999 Sigelman was working on a PowerPoint presentation and growing increasingly frustrated with the work coming back from the typing pool, fraught with fresh errors every time it was returned. Sigelman called Altschuler in New York and discovered that his friend was enduring the same kind of clerical horrors. It was clear that typing pool employees and temps lacked the drive and focus necessary 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 artists and out-of-work actors. Sigelman thought of India, which he had visited with his family as a child. He had always been impressed with 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 talent?"

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, drawing on the labor that India had to offer at inexpensive rates. It was all made possible by contemporary technology that allowed people in New York and India to work together on a real-time basis. "No one thought it was a viable idea," Sigelman told Business Week, "but we decided to do it anyway." They quit their jobs in 1999 and spent several months working up a business plan. They named their start-up company OfficeTiger after the Princeton mascot, the Tiger, and lined up $18 million in funding from U.K. venture capital funds Mountgrange 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 negotiate a difficult course in obtaining regulatory approval in India, steering clear of corrupt officials, before finally setting up in the city of Madras with its high concentration of talent. OfficeTiger also received a ten-year "tax holiday" from the Indian government.

The company's first facility was just a sheet-metal shed. Its first service line was Enterprise Document Services, offering to do PowerPoint presentations for investment banks and other firms and word processing 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 and 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, opened an office above a Dunkin' Donuts, and began pestering former Wall 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 study written for WorldTrade Executive Inc., Altschuler recalled, "We began 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 research, clients asked if the firm could also provide some financial analysis. In this incremental way, OfficeTiger added more demanding services. "We were really the first company that was focused on what we call 'judgment dependent services,'" Altschuler explained. "So it wasn't just inputting a spreadsheet or doing a rote transactional task, but the professional had to step back and think, 'What is the appropriate thing for me to do here?' Even in a PowerPoint presentation, the 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 team at a time to serve clients as they contracted services. The company established offices in a shopping mall in Chennai, and had no difficulty in attracting highly skilled people to occupy bank after bank of 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. Sigelman and Altschuler had one simple rule of thumb: Hire people smarter than themselves. OfficeTiger paid well above the market rate by Indian standards, about $1,000 a month, but a far cry from the $8,000 a month some of their employees might earn doing the same kind of judgment dependent work on Wall Street. It was that price difference as well as the work ethic of Indians, who were committed to performing even the most mundane task with "full sincerity," as the locals called it, that combined to make OfficeTiger such an immediate success in New York and London. In Chennai OfficeTiger quickly achieved a status afforded few employers. According to The New Yorker, "Workers were so pleased by their affiliation that they put it on their wedding invitations, just below their fathers' names."

There were some cultural miscommunications to smooth out along the way. To motivate the staff, Sigelman made the mistake of offering on-the-spot payments, not realizing that the employees considered it to be demeaning to accept wads of cash in front of others. Sigelman also had to contend with life at the hotel where he resided. He enjoyed a great deal of success recruiting employees from the reception desk, but had less luck, according to The New Yorker, in reprogramming "the hotel coffee-shop pianist, who, having realized that Joe is perhaps the only Jew in Chennai, routinely serenades him with 'Have Nagila' 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, however. Only Western business attire was accepted. Women were not allowed to wear saris, and men wore ties, sometimes passed from one shift 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 business were kept separate. Regardless, security issues were a major concern of all clients. The first step in providing security was the implementation of a thorough screening procedure, which was just as unforgiving as the testing process in weeding out unacceptable employees. In the end less than 2 percent of applicants found employment at OfficeTiger. When they reported to work, it was to a single point of entry, manned by guards who checked each employee. No personal belongings were allowed inside, and women were allowed to bring in a handbag only. Swipe cards were used to control access within the facility. In addition, if a client required, OfficeTiger maintained a secured environment within its secured environment, with more guards on duty to man another single point of access and a second set of swipe cards required. In addition, computer drives were locked, Internet access limited to people working directly with clients, and two levels of confidentiality agreements put in place, between OfficeTiger and its employees 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 firm Francisco Partners and earmarking the money for acquisitions to expand the company's range of service. Some of that money was soon put to use in the October 2004 acquisition of Devonshire, a British outsourcing company with some 200 clients in the financial, legal, consulting, design, and pharmaceutical fields. The funds also were used to establish an operation in Colombo, Sri Lanka, an effort to achieve geopolitical risk diversification. In addition, OfficeTiger expanded its Indian operation, opening a new 65,000-square-foot, six-floor dedicated building to supplement the original location in Chennai.

Company Perspectives:

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

OfficeTiger continued to pursue an expansion strategy in 2005, completing a pair of significant acquisitions. In a deal valued between $25 million and $30 million, OfficeTiger bought General Motors Acceptance 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 business. Some of OfficeTiger's clients were already involved in the equity 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 positioned to reap a large portion of that business. The increase in size also set up OfficeTiger to make a public offering of stock, something Altschuler and Sigelman had dismissed in the past. Moreover, the MortgageRamp acquisition was important to the future of OfficeTiger because it was becoming increasingly apparent that the outsourcing industry was ripe for a shakeout and size would not matter a great deal. OfficeTiger hoped to be one of the companies that emerged from the pack. It also was looking to new countries to establish operations and improve its geographic diversity, eyeing the Philippines and possibly Eastern Europe. "It's not about India," Altschuler told Securities Industry News. "It's about global sourcing."