Fiscal lessons for the future

size="3">The
world has just witnessed an economic recession and its retreat acted
as learning chapters for all the industries across the globe.
Entrepreneurs learnt the lesson of how to manage the cash flow, fund
availability, on the other hand allocating and also keeping the RoI
on track when the market is squeezed and the space to sell is
diminishing. The period that just got over was strangling the arms of
small and medium enterprises. They had to be extra careful and
strategic for planning their business for the year ahead. Among
everyone, the fraternity of solution providers was also in the same
pool where they had to think and think again for deciding their
business roadmap, allocating the fund in the right technology and
investing in projects that would ensure a consistent and stable RoI.

size="3">When
top notch SPs from all parts of the country assembled to participate
in the SP Summit conducted by DQ Channels in the commercial
capital of Thailand, Bangkok, they got the opportunity to interact
with style="background: transparent none repeat scroll 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">Sanjeev
Singhal, Executive
VP-Finance and Accounts, Religare Enterprises. Singhal, with
his vast knowledge and experience shared his thoughts with SPs about
the fiscal lessons one needs to learn for future.

size="3">Singhal
said, “According to IMF, the world has witnessed a great recession
and the world economy slowed down from five percent in 2007 to 3.7
percent in 2008. India is expected to grow by 7.7 percent in 2010. As
far as the IT market is concerned, the volume of the business will
certainly go high but capturing a large market share would be a
challenge for the entrepreneurs.” While speaking to partners about
the focus areas they should have concentrated on, while planning the
business strategies, Singhal mentioned that SPs should enhance their
focus on total cost of ownership (TCO).

“ size="3">Last
year was very bad as there was fund crisis but now the credit flow
will smoothen and bank and financial companies would ease the fund
sanctioning process. Till now it was getting difficult for the
customers to get funds sanctioned from banks but the situation is
expected to improve soon. However, in IT business, pressure on
margins will increase and SPs will have to be smart enough to manage
different aspects of funds,” elaborated Singhal. Further mentioning
the ways and methods through which partners should be able to get the
funds comfortably, Singhal suggested that the SPs need to adopt
creativity and innovative methods in their business plans and the
budgeting process. “Creativity and innovation come from anywhere
and everywhere. We need to involve people and welcome their
suggestions. Solution providers need to be productive, they have to
right size their manpower and should keep a benchmark ahead of them.
These factors would help them in drawing a business that is
protective enough to face a tough situation,” he said.

size="3">Elaborating
more on the financial aspect of a company, Singhal added that SPs
need to distinguish their good and bad revenue and they should posses
a good costing system. Also, partners need to analyze their payroll
cost, rental cost and communication cost in order to curb the
non-required expenditures and if necessary they can opt for
contract-based manpower services.

size="3">Sharing
his view on the same, Ranjan Chopra, Team Computers mentioned that
the employer-employee relationship must be long-term and not contract
based. “I believe that one should build a long-term relationship
with his employees. They should strengthen their potentials that can
be used for the company's progress. A sense of ownership should be
there among employees, so they will have a sense of belonging for the
company. This would help in retaining people with potential and it
can be an excellent tool for executing company's plans and strategies
in future,” said Chopra. style="background: transparent none repeat scroll 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;">He
further added, “Last nine months have been an eye opener for all of
us. The business model is changing. Today, customers are more owned
by the vendors, as they directly approach them. Funding is
very essential to reach out to new levels.”

size="3">Singhal
pointed out that consolidation has to happen to revive the situation
and there are a number of options such as credit, lease finance,
factoring, commercial paper and non-banking financial companies
funding to do this. “Cash is king and the rest is generated, and in
order to do this, funding arrangement should be well planned,”
signed off Singhal.