A ‘misfit' acquisition could lead a company into trouble — the case of Tally Solutions exemplifies this. Its two acquisitions in 2005 and 2006 were ‘culturally unfit' and dragged the company's growth, says Mr Shoaib Ahmed, President, Tally Solutions.

“Tally should have been an Rs 1,000-crore company by now, but instead will only be Rs 200 crore this year. We wanted to grow faster with inorganic growth but that did not succeed,” Mr Ahmed told a press conference here today.

In 2005, Tally acquired J.L. Informatics with around 200 people, and in 2006, acquired Vedha Automation with around 80 people. This helped Tally, which has been providing ERP (enterprise resource planning) solutions to small companies for the last 15 years, to become an 800-people company but the acquisitions proved to be a “drag on business,” he said.

Employees of the acquired company could not jell with Tally's senior people in the product development – the newer versions of Tally even got delayed. Despite this, Tally was still popular with smaller companies and continues to enjoy a subscriber base of nearly 5.5 lakh, nearly 1.5 lakh students have knowledge about Tally Solutions, he said.

Back in business

However, Tally is back in business after restructuring its employees and its channel partners in the last two years. It reduced its number of employees to around 550 from 800 and paid more commission to partners, who distribute Tally.

“We are now in a growth phase,” said Mr Ahmed. Tally will double its revenue to around Rs 200 crore by the end of the current fiscal and is optimistic of achieving Rs 500 crore in 2011-12.

The optimism is backed by large customer wins with Tata Steel being one of them with an order of around Rs 100 crore. Tata Steel has bought from Tally nearly 100 licenses to be distributed among its primary distributors for data transfer with the company. The scale of the project could reach around 4,000 licences, he said.

Tally is now going to medium and large-size companies to sell its products. It has won contracts from large companies such as Tata Steel, Epson and Kurlon. The Union Ministry of Rural Development has given an Rs 100-crore order, and has also won projects from various government departments in Tamil Nadu, Rajasthan, West Bengal and Andhra Pradesh, he said. Moving beyond ERP, Tally plans to include ‘supply chain visibility' that will enable by integrating a client's system with that of a vendor on issues such as inventory status and invoice, he said.

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