7 - Proof Of Concept

height="25" alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/90077a5fab3d5ba9702a4e6dcdfa5a9046c238157a7995952c60594d453cd509.jpg (2549 bytes)" align="right"> COLOR="#970026">

alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/a8a911d193b9fc23d362255a9ac10283387bf3165b8b736efd0c82ba82193fd6.jpg (11377 bytes)" border="0" hspace="2" vspace="2" align="right"> color="#FFFFFF">MD: RAMESH D GROVER

At Rs 442 crore and 77 percent growth, Godrej  Pacific

Technology Ltd (GPTL) has proved that it is  the mightiest force in IT distribution.

With almost all commodity products ranging from PCs, peripherals, software, and components

from all the leading vendors forming its product portfolio, GPTL has been following the

best global practices in the distribution business. The company has probably the lowest

cost structure in IT distribution in the country.

Everything the company did was right. The year before

last was the ‘year of adaptation’, as CEO Shailendra Gupta preferred to call it.

And adapt it did. Its investments in technology and the reengineering of its distribution

process paid off. The company’s growth has come through increase in marketshare on

its existing businesses and addition of new product lines. The company has acquired

leading marketshares–it is either # 1 or # 2 in all its product lines.

alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/310fe303944a64952a00d6f0b9a621bdd1b9526b36ca88aa1c674284e9bae945.jpg (10678 bytes)" border="0" hspace="2" vspace="2" align="right"> SIZE="2">The company started off as a printer distribution set-up. When the intent and the

model for distribution business was clear, it tied up with Tech Pacific, an Australian

distribution company, which brought in the discipline required to make it big in the

distribution business. In just around three years, GPTL has added on significant product

lines and has demonstrated growth in almost all of them. PC peripherals, including

printers, now account for under 50 per cent of the total business. PC servers, desktops,

and notebooks from HP, IBM, Compaq, and Digital worth Rs 60.4 crore were sold last

year–a 174 percent increase in its channel sales of PCs compared to last year.

Similarly, software licenses from Microsoft were

worth Rs 32.07 crore and CPUs and multimedia kits brought in Rs 64.5 crore. Networking

products worth nearly Rs 18 crore were sold through its channels. All these were

comparatively new product lines that were added in the past two years. It is believed in

the industry that the ultimate test of any product for its commodity value and market

acceptability is to put it through GPTL’s channel.

To its vendors, the company brings tremendous value.

Realizing this, most key IT MNCs operating in India have chosen GPTL to distribute their

products. The company provides them access to extensive channels, geographical

penetration, and addressability to various customer segments. The company is appreciated

by the vendors for its base of high-caliber manpower with comprehensive understanding of

the distribution dynamics. The company’s strong financial capability also makes it an

ideal partner for potential MNC vendors.

GPTL has been able to focus on five distinct channels

and increase the capacity and output of each. These are systems integrators, value-added

resellers, box movers, software dealers and resellers, and OEMs. The distribution

operation is supported by state-of-the-art information systems comprising up-to-the-minute

online status of product movement from any part of the country. This is enabled by using a

VSAT network to connect all its warehouses and an integrated distribution management

solution.

A highly channel-oriented company, GPTL has worked hard

to ensure pro-channel policies in all areas of decision-making. As a first step toward

enabling a shift in mindset in order to apply customer care benchmarks to the channels as

well, the company has started calling its dealers–internally as well as

externally–as "customers."

There has been high focus on key deliverables to

channels. High availability of products, almost always ex-stock, fast delivery, and prompt

supply of spares throughout the country are major benefits that GPTL’s dealers enjoy,

besides favorable credit policies, hassle-free transactions, efficient information

support, and reliable warranty support.

As IT products and services become more and more

commoditized and volumes ramp up, it will be interesting to see how GPTL remodels its

distribution strategy. Predictably, one way would be to use substantially the channels

that its other white goods JV, Godrej-GE, has created, and create cost and logistics

synergies with the alternative channel. In which case it will have to strive consciously

for congruence between its current practices, which are more suited for a

channel-to-business-user paradigm. In case it decides to go its own way and expand upon

its current strengths, the main challenge would be to manage a very large and diversified

distribution set-up, the likes of which the Indian IT has seldom seen.

alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/0c1b8f617b1c411b8d16d88277349df8009c4e8172145e75b4f5472d0e12929a.jpg (22931 bytes)" border="0" hspace="2" vspace="2" align="left"> size="2">By focusing on the channel, GPTL has proved one major point to the Indian IT

businesses–that it is possible to add value without actually ‘making’

something. To that end, GPTL’s early advantage will enable it to stay in the lead as

far as the distribution business goes.

In the coming year, GPTL will emphasize on further

streamlining channel interaction, reducing the cost of distribution, and identifying

opportunities for value addition. The company is also seeking portfolio expansion to fill

gaps, particularly in the area of storage products and components.