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An impressive Tally

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Ninety per cent of small businesses use Tally software for their accounting, says the company. What's the road ahead?

Bharat Goenka
Bharat Goenka

Bharat Kumar

THE brand has been built over 18 years. And predominantly through word of mouth and through advertisements on metal sheets nailed to the back of buses and auto-rickshaws. And if 90 per cent of small businesses use Tally software for their accounting, then the company must have done something right. Ask Bharat Goenka, CEO, Tally Solutions, what else he did to make `Tally' so widespread among India's educated masses, he is dismissive. With a shrug, he says, "You guys helped us".

But during the course of the conversation, it becomes clear that the casual exterior is just that... the exterior. Tally intends to do things it hasn't done in the past. And that too, aggressively... Does piracy bother you as much as it does some international brands in software?

Piracy is an issue. The assumption that piracy helps a particular brand of software become popular is a myth. People obtain pirated versions because the software is popular. But, having said that, I believe in the goodness of human nature. A prospective buyer does not buy pirated software (at a much lesser cost compared to market prices) because he wants to hurt a company or an individual. It is obtained easily. It is difficult to get to a place that sells the software he wants. And if he does get there, it turns out to be too costly.

The problem here is mine, not the buyer's. My job is to ensure that my software is easily available and is inexpensive enough.

Have you lowered prices in the recent past?

From Rs 22,500 a few years ago, it is now available for less than Rs 5,000. This is where the strength of the brand helped me. It helped reduce selling costs. Now, I want to make Tally available at about 50,000 outlets across India in the next year or so. In two years, we will be present in at least six major geographies outside India.

How do you manage your manpower? Given that you are different from typical Indian software biggies, in that you sell to the domestic market and you sell a finished product... ?

People in the team tend to have a sense of belonging. The work they do appears in a product that is branded and which has become well known over the past few years. Now, Tally is entering a completely new business.

We have been targeting small and medium sized enterprises in India. We want to sell to large companies. Our product development team will grow from 240 to 700-800 in the next year. This is significant since it stood at 90 for about four years till last year.

Since you have been well entrenched in selling a software product to mid-sized clients, will you look at other areas?

We already have a presence in training. Now, we want to expand our scope of operations there. We want to see at least one million students graduating from our 350-hour course. So far, only 70,000 students have completed it in 3 years.

Popular opinion has it that transparency brought in through the value-added tax (VAT) regime could send small vendors of personal computers out of business. The assumption is that grey-market vendors depend on tax evasion for margins... Will this affect your business?The small vendor of computers will continue to sell his wares. If the price differential, between a branded PC and an unbranded one is too low, he will switch to selling branded PCs. Businesses won't disappear.

On the other side, there is also debate on whether corporate India will buy a significantly bigger number of PCs because of VAT and the need for transparency in their operations.

There is always buyer inertia when it comes to adoption of technology. However, when a whole regime changes (as is the case with VAT), then the businessman would want a total revamp of his infrastructure. This could mean that more PCs would be bought.

Tally has been actively pushing the case for VAT, sponsoring Assocham meets on the issue, and all that. How do you benefit from direct involvement?Other than the altruistic motive, we feel it is important for us to work with chartered accountants' bodies.

bharatk@thehindu.co.in

(This article was published in the Business Line print edition dated January 10, 2005)
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