Future Fiscal Lessons

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 on how to manage 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. Among everyone, the fraternity of solution
providers was also in the same pool where they had to think hard before deciding
their business roadmap.

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 Sanjeev Singhal, Executive
VP-Finance and Accounts, Religare Enterprises. Singhal shared his thoughts with
SPs about the fiscal lessons one needs to learn for future.

Singhal said, "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 marketshare would be a challenge for the entrepreneurs."
Singhal mentioned that SPs should enhance their focus on total cost of ownership
(TCO).

"Now the credit flow will smoothen and bank and financial companies would
ease the fund sanctioning process. 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. "We need to involve people and welcome their
suggestions. SPs need to be productive, they have to right size their manpower
and should keep a benchmark ahead of them," he said.

Sanjeev Singhal EVP-Finance & Accounts, Religare Enterprises

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 communica-tion cost in order to curb the
non-required expenditures and if necessary they can opt for contract-based
manpower services.

Sharing his view on the same, Ranjan Chopra, Team Computers mentioned that
the employer-employee relationship must be long-term and not contract based.
"They should strengthen employees' 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," said Chopra. He further added, "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."

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.

Amrita Tejasvi

amritat@cybermedia.co.in