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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.

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