BUSINESS DRIVERS:Greater The Technology Usage, Bigger The Business

The writing on the wall is very clear. If you want to consistently grow in your business and provide value-addition to your customers, use technology to the maximum. Be it a call center, VSAT and leased line connectivity and Web-enabled business transactions. The usage of these technologies has enabled bigger companies to grow bigger, year after year.


Look at the leader of them all, the No 1 in the CI Silver Club, Tech Pacific. The distributor has a call center, which can ensure that an order is fulfilled within eight hours flat. Its comprehensive B2B web site is at the beta testing level and 100 partners are already using it. Tech Pacific has VSAT connectivity as a back up for the Web, which is run on leased lines. Costs are doubled all right, but this is done to ensure that value-addition to partners is guaranteed.


The result is that the revenue gap between the No 1 in CI Silver Club, Tech Pacific, and No 2 Redington, is widening. The figures make the picture very clear. There was a gap of Rs 302.6 crore between Tech Pacific and Redington in 98-99 which increased to Rs 422.5 crore in
99-00.


This, however, does not mean Redington does not use technology for its operations. It very much does. But perhaps the usage has come a little late in the day and it is not comprehensive enough.


Redington has in place JBA’s System-21, an ERP that helps the company to manage its stocks, inventory and delivery. Its branch offices are connected with warehouses via leased lines with back-ups. But connectivity with channel partners right now is through telephone lines. Call center and Web-enabled business transactions are only at the drawing plan stage.


So is the case with Ingram Micro. Though it has shown the highest growth in the CI Silver Club, it has a lot of catching up to do with the No 1 Tech Pacific from technology usage point of view. For instance, a call center is yet to be in place. Ingram is looking at the evolving business models and would then decide whether it wants to go for a call center or not. This could possibly happen early next year.


But the in-house ERP solution IM-Pulse which drives online real-time information access and inventory control, has enabled Ingram to control its inventory efficiently and manage its deliveries to partners in a time-bound fashion.


Ingram’s branch offices and warehouses are connected through ISDN and leased lines. However, the company is still not Web-enabled. It hopes to carry its business transactions to the Web by early next year when members of IM-Pro Club will be first Web-enabled for their business transactions. Later, the facility will be thrown open to all channel partners.


Systems integrators thrive on technology


Next to the three pure distributors in the CI Silver Club, there are two technology-savvy companies Wipro and HCL, who by virtue of their systems integration and reseller business have made it to the CI Silver Club. And technology is playing a very prominent role in their business transactions with channel partners.


Take the case of Wipro. It is aiming at 100 percent paperless communication by the year-end. It has a Web-based operating system for its channel partners in metros enabling them to place orders online.


An in-house developed ERP system called SIMEX helps Wipro to respond to the needs of its channel at peak efficiency. Its Pondicherry factory, 12 warehouses and branch offices are connected through VSATs.


In the case of HCL too, business transactions have been supplemented with a web strategy. Complete B2B support and customer service is provided through the Web. Channel partners can log on to the HCL site if they have a problem in rectifying a machine. Partners can also find out the stock status on the Net. There is a 24-hour on-line shop on the Net. The inquiries posted on the Net are passed on to the dealers.


HCL has nine call centers across the country where in and out-bound tele-calling is done by dedicated personnel. In-bound tele-calling could be a response to an ad, which is passed on to the dealers. Out-bound tele-calling involves calling up particular databases. Leads developing out of these calls are also passed on to the dealers.


A pure systems integrator like Datacraft, which is at the 11the position in the CI Silver club, is highly technology-driven. Intranet is used to position the company as an e-commerce organization. ERP, SCM and ERM are extensively used. SAP was implemented last year for all business processes.


The other systems integrator Ashtech is in the process of setting up its call center-enabled B2B website meant only for its customers. The company is in the process of Web-enabling all its services.


Another systems integrator, Allied Digital, has got into e-business with its web site
www.oldpcindia.com. This is a site wherein customers can buy second-hand IT products at low prices. Allied also established a call center at the beginning of 2000, which is used to solve problems that users or resellers face.


Technology usage by second-rung distributors


Coming back to the other pure distributors in the CI Silver Club, who include Compuage, Savex, Priya, ACI, Aditya, OA Compserve, Wellwin and Supertron, technology implementation in these companies has been done only to a limited extent. Compuage, for instance, employs the software package FACT for accounting, inventory control and MIS. The company is evaluating various ERP packages for a possible usage.


Savex has an in-house ERP package to cater to the typical Indian way of doing business with local levies and post-dated cheques being factored in. But nothing else much. Priya has networked all its offices across the country automating their business processes. But rest is at a planning stage. Two call centers are being planned, one each in Mumbai and Bangalore. The company has no immediate plans to set up an e-commerce site.


Priya provides online support to its partners through www.priyagroup.com. The company first wants to put in place proper logistics before it embarks on e-commerce. All of Minicomp offices are networked. Its Intranet enables it to track orders and other business transactions. The company plans to set up a B2B site for its channel members by the year-end.


Aditya’s offices are on email and connected on ISDN lines. Again no ERP or major connectivity initiatives. These are at exploratory level and some action is expected only next year.


Rashi Peripherals has plans to set up a call center at Mumbai within a few months and similar facilities will be made available in other metros as well. However, promoters of the company do not have very high hopes for technologies like ERP or CRM.


Mediaman is at the level of MIS getting done efficiently. The package consolidates its invoices and entries. The company aims at real time transactions by 2001. Datapro uses the Internet for communication and transfer of commercial documents.


Thus, except for the top two pure distributors of the CI Silver Club, the rest have to ramp up quickly with respect to usage of technology to keep up with the market demands. This does not mean that growth will not be there for these companies. Growth would very much be there.


But it will not be a technology-driven growth. In the process, the technology-driven biggies would become even bigger, indirectly dwarfing the growth of small-to-medium distributors.


The CI Team

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