Future growth depends on proper management of funds

The one major issue confronting the channel community-especially
solution providers-is funds. For a majority of them, the issue is how to raise
money to fund future growth. And for some, the issue is how to manage their
funds in an efficient manner.

Let's for a minute look at the market in general. Overall, the
Indian GDP growth is more than 8%. And predictions are that very soon, the
growth will surpass that of China. As a result of this hot growth, the IT sector
is setting new standards in terms of overall growth.

Recently, NASSCOM said that the IT services is growing at 32%
and will continue this momentum for the next three-four years. In fact, exports
in this sector are expected to surpass $ 60 billion by 2010. Similarly, the
hardware sector is also growing at a good pace. The PC market is about

to touch the magical five million mark and the growth momentum will continue
unabated.

In such a hot and happening market, the biggest beneficiaries
are channel partners. They are reaping a virtual bonanza in terms of business
being generated. At last count there were close to 20 partners who's topline
was in excess of Rs 100 crore. Another 40 of them are in the Rs 50 crore to Rs
100 crore band. In fact, if we look at the top 100 partners in the country, all
of them are in excess of Rs 40 crore. And, practically the entire lot is growing
in double digits.

Now, the growth in topline is not too difficult as there is no
dearth of business. However, what is certainly difficult is firstly, the
availability of funds and secondly, proper management of funds. An overwhelming
majority of these partners have funding issues, which means that adequate money
is not available to fund higher growth. As a result, they are grappling with the
question where and how to raise money.

Then there are also some partners for whom availability of funds
is not an issue. Rather, the issue facing them is how to efficiently manage the
funds. Because, if the funds are not managed properly and efficiently, they run
the risk of ruining their bottomline.

So, the growth will happen on its own. However, the need of the
hour is not just plain vanilla growth in topline. The growth has to be there in
bottomline also. In fact, partners who manage their funds better will see more
growth in bottomline than topline. And that is the key to the success and a
bright future.

Asim Raina