By: Rahul Sachitanand
The Economic Times, Bangalore, India

The 21st century has been something of a nightmare for corporates worldwide. If the global recession didn't hurt their sentiments enough, an almost never-ending line of corporate scandals has shaken the corporate world. From Enron to Firestone to home-making maven Martha Stewart's underhand dealing and pharma giant Pfizer's troubles, non-compliance seems to have become an everyday occurrence, giving MetricStream, a software start-up a juicy bone to chew on.

Today a mind-boggling range of strictures governs the way companies conduct business. As an example, global banks today have to adhere to 370 laws on a daily basis. In manufacturing the complex web of compliance regulations has spun-off a $ 1 billion market. Eyeing the huge market potential, MetricStream has evolved two software packages - QualityStream and CorporateStream - to deal with quality and operational compliance and adherence to corporate governance regulations, respectively.

Shelly Archambeau, CEO, MetricStream, says the opportunity for the company is huge. "The areas we focus on include supplier quality, internal quality and adherence to industry standards, especially in the automotive and hi-tech industries. Regulatory compliance is another area. These include regulations from the US Food and Drug Administration in life science, medical equipment and biologics, USDA (food industry) and the Securities and Exchange Commission," she explains.

In addition, "With global outsourcing comes the responsibilities and compliance to regulations that need to be followed in the 'manufacturing countries' at well as in countries where products are sold and that makes it very difficult to manage without automated solution," she says.

With rigorous compliance norms, Archambeau says just a single or 'point' solution covering one section or department of an organization is today insufficient. "Companies are now looking for one-compliance solutions that can handle all their needs. The market for quality and compliance is expected to grow at 30% CAGR," she says.

Her views are backed by technology research firms AMR and Gartner, who say moving to a single enterprise wide platform is cost-effective. "In the past, point systems were adequate to address isolated compliance efforts, but as the number and scope of compliance requirements grows' isolated efforts become a business risk and increase costs," AMR research says in a recent study.

Demonstrating this, Gartner says a bank will spend 0.2%-0.4% of its pre-tax earning on getting compliant with single regulation. If it were to get in line with all regulation individually, the bank would erode its profitability.

"As regulatory regimes proliferate, a comprehensive compliance programme keeps regulations from depressing, " the agency states. While Archambeau may be very bullish on the compliance market, the company is self-evidently work in progress. It recently took over Zaplet to get its e-mail collaborative technology to the MetricStream fold. Archambeau says several other areas need to be covered. "We will continue extending our solutions to offer other areas of compliance including HIPAA, OSHA, EPA. MetricStream will pursue both organic and acquisitive growth opportunities, "she says.

Like many of its technology peers, India is critical to MetricStream's software development plans. The firm currently has about 50 people and plans to double this by end -2004. MetricStream India is a center for product development and support services.

MetricStream's customers include Hitachi Computer Products (America), Solectron, Albany Molecular Research and Adidas.