11 - Better Late Than Never

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DQI Bureau
New Update

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alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/5f3e4889f72f2f9f3036125262f8750f526dd61422c6fabb738d8b973c2b4c1e.jpg (12673 bytes)" border="0" hspace="2" vspace="2" align="left"> CEO:
ARUN SOGANI
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O size="2">nce again Unicorp surpassed expectations and crossed the Rs 300-crore mark. At Rs
314.60 crore and a growth of over 50 percent, the performance is commendable at a time
when the entire economy was going through a crisis.

On the domestic front, where 40 percent of its business
comes through channels, Unicorp had good success as far as sales were concerned. Its
overall hardware business went up to Rs 215.95 crores in 1997-97, a growth of over 43
percent over the previous year. Its Compaq business grew by over 70 percent in terms of
number of machines and by over 25 percent in terms of revenues. Among the major orders was
the Rs 10.5-crore order from Allahabad Bank for total branch automation. Other important
clients of Unicorp were TCS, Gap Int’l, Escotel, NIIT, and Jardine Fleming.

alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/fe277b29162b454e22a0a446c2aa6c9ba8e3aafd6b1d9b151ad4be4154981945.jpg (11396 bytes)" border="0" hspace="2" vspace="2" align="right"> size="2">The company also did fairly well with its own Unicorp range of computers. At
1,100 servers, and over 14,100 PCs, Unicorp’s business from own brand went up by over
149 percent in terms of numbers and over 200 percent in terms of revenues. Alongwith the
systems, Unicorp also sold about 4,000 dot matrix printers and 47 line printers, and
21,000 network interface cards. However, while the company did well with Compaq, where it
was primarily selling boxes, the company failed to achieve results with IBM PCs and
servers as well as Apple Macs.

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S T R A T
E G Y
  • To move into high-profitability areas like services,
    software development, and training.
  • To focus on banking, finance, and insurance sectors.
  • To focus on international markets and exports.
  • Classify market for Compaq and Unicorp products.

T A C T I C S

  • Offer a range of services to large clients.
  • Compaq server Unicorp nodes’ model.
  • More focus in non-metros through channels for SOHO and
    home market.
  • Leverage on existing exports markets to offer other
    services.
  • Set up Unisoft for software services and exports.
  • Look to high-end training in AS/400, ERP, Microsoft.
  • Adopt cost cutting measures.
  • O B J E C T I V E S

    • To move up the value chain to become a more profitable IT
      company.
    • To reduce dependence on distribution and low-margin
      businesses.
    • P E R F O R M A N C E  H I G H L I G
      H T S

      • Crossed the Rs 300-crore mark and posted an impressive
        growth of over 50 percent.
      • On domestic front, hardware business went up to Rs 215.95
        crore, a growth of over 43 percent.
      • Formed Unisoft for software development and exports.
      • Export of computers grew by 76 percent–from Rs 18.15
        crore to Rs 31.91 crore.
      • PRODUCTS AND SERVICES:
        Systems, Networking, Systems Integration, Maintenance color="#ff0000">* AGENCY OPERATIONS: Compaq color="#ff0000">* START-UP YEAR: 1986 color="#ff0000">* EMPLOYEES: 464 color="#ff0000">* DEALER OUTLETS: 89 color="#ff0000">* ADDRESS: 242-43 Udyog Vihar, Phase
        IV, Gurgaon 122001
        * TEL: 346379/80/83/85/87
        * FAX: 347636 color="#ff0000">

        * WEB SITE: COLOR="#000000"> www.unicorpind.com

        However, behind all the success there are
        confirmed reports that in its zeal to sell, Unicorp has considerable amount of money stuck
        in the form of receivables. This has, reportedly, led the company into a tight cash
        situation and financial crunch. The company had to raise substantial amount of money
        through various sources to meet the crisis. Cost-cutting measures are also being adopted
        and several committees have been set up to look at expenditures in various departments.

        Considering the decreasing margins in PC business:
        Unicorp has been for sometime trying to move into solutions and high-end machines.
        However, it could not sell any Sequent machines or any IBM AS/400s for which it was a
        distributor. Earlier, after it had performed wonders with Compaq, Unicorp was said to be a
        highly sought-after vendor among MNCs wanting to establish their brands in India. But it
        was primarily lack of performance because of which the sales tie-ups with IBM, Sequent,
        and Apple were finally discontinued.

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        Clearly, it is time for rethinking and consolidation at
        Unicorp. As a strategy to move away from distribution and box-selling, Unicorp wants to
        move up the value chain both in terms of the services they offer as well as higher
        margins. The company is planning a product mix, where only about 20 percent of revenues
        come from distribution activities, and wants to build up its own strengths in the areas of
        services, software development, and training to contribute the balance. The primary task,
        therefore, will be to enhance and strengthen the company’s focus on providing
        solutions in the high end. The company has identified banking, finance, and insurance
        segments as the key markets where it will target in the coming year. Toward that end, it
        has already tied up with ICS of UK, for banking applications, and another UK-based vendor,
        JBA Systems, for the ERP segment.

        In line with the decision to move up the value chain was
        the decision to form Unisoft for software development. With offices in Singapore and
        Dubai, Unisoft, which specializes in Oracle, Solaris, networking, and firmware, has
        already got over 50 people on board. Unisoft will be taking up both on-site as well as
        off-shore development work, and will stress on projects. As per plans there will be over
        200 people at Unisoft by the end of this year.

        The third line of high profitability business that
        Unicorp will do is training. To be started sometime in September this year, Unicorp’s
        training activities will be centered around Microsoft, AS/400, and ERP. The objective is
        not only to have revenues from this activity, but also build a pool of software
        professionals for Unisoft.

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        Unicorp’s hardware exports dipped last year due to
        the Asian economies’ meltdown, from Rs 54 crore in 1996-97 to Rs 31.91
        src="unicrop3.jpg" width="400" height="163" alt="unicrop3.jpg (21170 bytes)" border="0"
        hspace="2" vspace="2" align="right">crore last year. The encouraging point
        here is that while a bulk of export revenues in 1996-97 had come from export of SIMMs and
        the rest from computers, in 1997-98 export of computers grew by as much as 76
        percent—from Rs 18.15 crore to Rs 31.91 crore. And Unicorp plans to continue its
        thrust on exports to countries like the CIS countries, Vietnam, Hong Kong, Dubai, Sri
        Lanka, Emirates, Egypt, and Saudi Arabia.

        The current year will be action-packed for this Top 20
        veteran. Remixing its product portfolio, expanding its ambit of activities from
        box-centric to solution-centric, getting into new businesses like training and software
        development...will take a lot of doing. Which could be quite daunting if its reported
        financial problems continue, as all these activities will call for a significant amount of
        funding. In the middle of all this, the company has moved its corporate headquarters as
        well as manufacturing facility from Delhi to its 60,000 sq. ft complex in neighboring
        Gurgaon. Unicorp has a spare capacity of about 8,000 units per month and it wants to take
        up contract manufacturing.

        A full plate indeed for the current year.