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Wednesday, Sep 25, 2002

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Angling for business

Vipin V. Nair

When the small fry fight big fish in new waters of competition, this company senses a big haul. It's packed its gear to go fishing - to help the small firms find business.

Srikant Sastri

HOW to fight big fish, that too in absolutely new waters? This is one major issue that the small and medium-sized software companies in the country face today as they enter new geographies. Having focussed on their familiar and favourite market - the US - all this while, the small and medium companies are now finding it difficult to gain business from countries in Europe and the Asia-Pacific as they are completely new to the business environment in these places. But given the continuing economic slump in the US, they are left with little option but to go ahead, however alien the new territories. And then there is strong competition from larger companies who too are keen to tap these markets.

As the saying goes, one person's problem can be an opportunity to another. The problems that the Indian software firms face in the Asia-Pacific region looked like a great opportunity to Srikant Sastri, Managing Director of Solutions, a seven-year old, Rs 40 crore out-and-out marketing company. "We have been helping companies with our marketing services and we have had IT companies like HP, Seagate, Microsoft and Cisco as our clients for the Indian market," says Sastri, an alumni of IIT Kanpur and IIM Calcutta, who founded Solutions in 1995. So Solutions devised a marketing programme to help those software firms who need assistance in getting customer access in Singapore, Malaysia and Australia.

The genesis of this programme, called `Face2Face', is the realisation that small and medium-sized Indian software firms are rather unknown in these markets, though India's software prowess is well known. Besides, most of these firms do not have the resources to set up subsidiaries or offices in new markets to undertake marketing activities. "We have found that it is almost impossible for a small Indian software company to get access to customers directly. The only way to tap these markets is to partner with local software companies," Sastri says. And the local technology companies too, are on the lookout for partners who can do low-cost offshore software development.

Here is how Solutions seeks to play the role of a facilitator through Face2Face. In simple terms, Face2Face helps both Indian companies and companies in the Asia-Pacific region to find the right partner.

"We identify the expertise of our companies and match them with the requirements of IT services providers from Singapore, Malaysia and Australia. If a company in any of these countries shows interest in working with an Indian firm, we arrange meetings for them," Sastri explains. That may sound simple, but in order to do this, Solutions has had to do a great deal of research and other back-end work. Firstly, it selected 500 small and medium-sized software firms in India with turnover in the range of Rs 15 crore to Rs 100 crore. Then brochures were sent out, phone calls made and interviews conducted to learn more about their skill sets. "Finally 25 companies have engaged us to find partners," Sastri says. "It takes 2-3 long phone calls, a couple of meetings, including sittings with a Director or CEO of the company, before you are signed up."

On other hand, Solutions has also tied up with marketing firms of its ilk in Singapore, Malaysia and Australia who would provide details of companies there. Moreover, Solutions itself established a subsidiary in Singapore recently. "We expect to sign up with 15 companies each from these companies by middle of October," he says. Then Solutions will present its clients with a list of companies and facilitate meetings and discussions. The company will charge an Indian client a fee of $1,500 for each country. "We will refund the fees if we fail to bring the right partners within a stipulated time. However, it is up to the clients to strike a deal and we will not interfere in billing rates and other issues," Sastri says. And if a deal is struck, Solutions will also charge 3.5 per cent of the business transacted for the first year and two per cent for the second year.

Delhi-based TechSpan, one of the companies that has signed up with Solutions, finds this way of marketing a cost-effective means. Says Stephen Aranha, Executive Director of TechSpan: "Our focus market has been the US and we did not have a presence in other geographies. Setting up marketing offices in new countries is an expensive proposition and is also time-consuming. Hence we decided to engage Solutions." Aranha says the cost of doing marketing activities in a country like Singapore or Australia would cost a company about $ 100,000 per person per year. "Through Solutions, we will get to have dialogue with many potential partners in these countries who are also looking for offshoring," he says.

Sastri is hopeful that Face2Face will result in many a match-making in the coming months. Once the programme is a success in the three countries, he intends to expand to Japan, Korean and Taiwan in the near future to hand-hold Indian companies, a help many firms desperately need these days.

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