“Necessity is the mother of invention”- this old adage serves good for Tally Solutions. Back in 1986, Shyam Sundar Goenka and his son Bharat Goenka was in the business of supplying machine parts to textile mills. But they were unable to find a relevant software to manage the accounts. Then they thought- why not develop our own solution? And so Bharat Goenka developed a MS-DOS app with a basic accounting functionality and named it ‘Peutronics Financial Accountant’. Little did the founders realised at that point in time, that Peutronics will become a major force and morph into Tally Solutions and find its way across thousands of micro, small and medium enterprises in India. Today Tally has more than a million customers who use different versions of its products. In 2009, the company launched its ERP product- Tally.ERP 9- a complete business management solution.
In a landscape that’s dominated by IT services companies, Tally is one of the few IT product companies in India that has carved a niche for itself by staying focused on its product play since its inception. In an exclusive interview to DATAQUEST, Tejas Goenka, Executive Director, Tally Solutions talks about being an IT product company in a services driven Indian market. Excerpts.
To start off with a larger context how would you reflect on some of the defining moments of Tally?
The biggest one that comes to my mind was one during 2004. We have been growing steadily over the previous 18 years and had been labelled as the poster boy of the Indian software products industry in the late 1990s. In an attempt to drive awareness and ease of access to legal versions across the country we made two acquisitions and expanded the company size by 10 times and dropped the market price over 5 times – this large change in short span of three months taught us how important core culture is to the company, how to organise the business at a large scale, and the equity of the brand in the market. We have certainly come a long way.
Being an IT product company in a services driven Indian market is not easy – in this backdrop, what worked in favour of Tally?
From inception we have been very clear that we wanted to be a product company and not a services company. This required us, and continues to require some hard decisions being made on a regular basis. When the company had just started, we did not have much financial backing, and all money coming in was highly valuable – as is the case with most startups. Back then too we would outright refuse to take any AMCs or any services money due to the clarity in the objective we set for ourselves. Even today, many people ask us why we don’t earn from services and AMCs, but our goals are clear to us.
Tally has been a predominant player in the micro, small and medium space- are you also targeting larger enterprise mandates?
The natural audiences are the micro, small, and medium businesses, but we do believe there is a section of larger business to whom we can add a lot of value today, and through our roadmap for tomorrow. The value we add today is that we are the most powerful yet simplest software for distributed businesses to use to manage their money and materials related requirements the best. In our roadmap tomorrow, we will be building up our product portfolio to bring tech innovations to these larger players like better centralised operations, contextual analytics, etc. all while keeping our core strength at the fore front.
Can you talk more about the IT adoption and decision making dynamics in the SMB space?
While IT adoption has grown in India, the businesses that we serve have consistently shown that their decisions are impulse driven and not compulsion driven – this is very different from the larger enterprises. The implication of this is that your entire sales process has to be designed to cater to this behaviour.
If you reflect on FY 16 – what is the appraisal of your performance?
Overall I think we did very well, we have started chasing high growth trajectories and are on track to achieve them. We continue to believe that we are far ahead of what the rest of our peers are at. Having said that, the goal we are chasing is very large – there is a lot to improve on customer experience, and a lot to innovate in our technologies. You will see a lot more from us across both these soon.
What is your assessment of the India IT products space – we do not see much action despite industry forums like ISPIRT trying to jumpstart product initiatives from this part of the world?
Good question. We are of course firm believers that India’s growth story is related to how well technology is being used to drive efficiencies in outputs and greater effectiveness in outcomes. Due to the large diversity of the market, we think that it is product companies that will make this difference. We do like to believe we have played some small role in the SME growth story in the last 3 decades as well. Having said all this, India is still an evolving country for product businesses – our tax systems are today are source of friction for such companies; products are inherently tradable items, and the infrastructure for this trade doesn’t exist. We have put in a lot of time, money, and effort to create this infrastructure but there is a long way to go. Until we recognise these problems, we certainly think that it will be difficult to create a vibrant ecosystem in the country.
Do you think Indian product companies suffer from perception issues – like global brands having a higher brand preference?
Not at all. We don’t see any global brands making an entry into India despite multiple expensive attempts, and we are very well accepted across more than a 100 countries today. Most importantly however, the brand equity we are lucky to command in the SMB allows us to believe that there is just no problem here. All you need is a great product, and a good way to reach it to the customer.
If you were to mentor an IT Product start up – what would be the 3 best practices you will suggest to them?
My suggestion would be : Focus on technology. Don’t assume your sales and distribution – the cloud will not solve this in India and finally be willing to throw away your code if you want to be a winner.
What are your key focus areas for FY 17 and your strategy?
Expand deeper into India, focus on product nativisations for key markets outside India and improve our customer experiences across the digital and physical channels.