Role Model
Piloting Success
What do we do when we get bored of sitting in front of a computer?
Most of us stretch and yawn. But Anil Mhaske created the Rs 250 crore Datacare Corporation
By Sharmee Roy
It all began in 1992 with his first job at Grameen Junta Co-op Bank in Pune. While working there as a software programmer, Anil Mhaske, now CEO of Datacare Corporation, also completed his MBA in marketing. After working for one and half year at the bank, Mhaske got tired of his routine job. “I was bored of sitting in front of the computer. Also, when it comes to software programming you need to give personal attention, but with trading I thought I could hire people to look into the sales part while I concentrated on the management side of it,” recalls Mhaske.
He, however, had no funds to start a business. Enter Tony Garg, an ex-air force pilot, whom Mhaske met while working with Grameen Junta. Garg’s interest in software prompted him to help Mhaske. Soon, Datacare Computers came into being in 1993 with a capital of Rs 5 lakh.
Step by step
 Mhaske started his business as a corporate reseller in a 100 sq ft office in Pune. His first major order, for peripherals worth Rs 1 lakh, came from Kirloskar Cummins in 1994. “This order was the perfect beginning to my career,” he says.
With PCs being priced in the range of Rs 30,000, he kept a margin of Rs 5,000 to Rs 6,000 per PC. At the same time, he also dabbled in software training and started training local army units. He then moved on to train a few corporates in Pune, and managed to garner revenue of Rs 4 lakh in the first year of his operations.
The Kirloskar order was followed by another one worth Rs 10 lakh from an engineering college. However, it was his tie-up with Samsung for monitors that set the tone for his future activity in 1995 and marked his entry into the sub-distribution business. “Our name was recommended to Samsung by Redington, and it provided a huge boost to our business. It was one of the turning points from where our business grew steadily,” informs Mhaske.
The next big tie-up came in the form of HP, with Datacare adding printers to its portfolio. By this time Mhaske’s business had started to flourish, and word-of-mouth helped attract more vendors.
But just when he thought that nothing could go wrong, his business got a shock in 1998: one of the resellers who owed him Rs 35 lakh committed suicide.
“I got carried away by the success of my venture, and started giving credit to anyone and everyone, but after this incident I faced such challenging times that I even thought of quitting the IT business. Finally, I decided against taking such a step, and instead took the experience as a learning opportunity and decided to put in place a credit control policy to take care of such events,” he reminisces. Mhaske went ahead and appointed a person especially to monitor the credit system. As a result, the company now boasts of zero bad debts.
Business mix
The last three years have seen the company grow at a CAGR of 55 percent. Mhaske attributes this growth to a major channel expansion in 2005 in the upcountry markets of Maharashtra, as well as its entry into retail and services.
In the just concluded fiscal, Datacare registered a turnover of Rs 250 crore, up from Rs 175 crore in 2007-08, a growth of nearly 42 percent despite the slowdown. Nearly 70 percent of this came from distribution, 20 percent from services, and 10 percent from retail.
“In that year we outlined a vision to grow at a minimum 50 percent over the next five years, and formulated a three-pronged strategy for the same. First, we decided to expand our distribution business from being city-based to becoming pan-Maharashtra. Second, we realized that to seed demand in upcountry locations we had to back our offerings with strong support, hence we decided to focus on creating our own post-sales support infrastructure. Third, we decided to get into the retail business because while distribution gives volumes, retail contributes to profits.”
Following this strategy, Datacare moved into the interiors of Maharashtra across districts such as Aurangabad, Nagpur and Sholapur, and appointed dealers there. The company today has 1,500 active resellers in these upcountry markets, and has emerged as the largest regional distributor in the country.
“We developed new resellers across the hinterlands of Maharashtra by enabling entrepreneurs to take up IT reselling. When banks were not willing to give credit to these resellers without tangible security, we not only trained these resellers but also provided them with enough credit to kick-start and then grow their business,” Mhaske explains.
About the thinking behind Datacare’s services business he says: “With services our aim is to create our own network of centers, led by partners primarily in smaller cities where vendors don’t have local support, at a price the customer can afford. Additionally, we focus on AMC contracts with large companies and government organizations which are locally fulfilled by our local service partners. This has helped our partners generate a new revenue stream.”
Over the last two years the company has put in place a network of 50 of its own ASPs, and has signed up with 100 companies for AMC contracts.
Then last year Mhaske started three retail outlets, all in Pune, displaying multibrands. One these outlets spans 2,900 sq ft, while the other two are 600 sq ft and 250 sq ft Datacare also boosted its product portfolio by becoming Dell’s regional distributor for Maharashtra, excluding Mumbai, in 2008.
Systems-oriented
Mhaske believes that systems and processes are imperative for any organization to grow, which is why two years ago he went ahead and deployed BI with an investment of over Rs 60 lakh to automate the company’s processes. “Once you reach a certain size there is a compelling need for building strong systems and processes. I have seen many partners who are doing good business but are still lagging behind since they chose to ignore these systems. SAP has entirely changed the way we run our business. Not a single order is processed before being punched into the system. It has enhanced our inventory and credit management.”
With 300+ employees, Mhaske has devised an interesting way to appraise them. The company follows a card system whereby an employee who consistently performs well gets a green card, while an average performer gets a yellow card and an employee performing below par gets a red card. These cards are handed out to employees every month. Based on these cards, employees get their incentives and appraisals.
Yet another initiative is training employees in the art of management. This happens once or twice a month, when the company hires management professionals to train the staff.
In addition to this, Datacare has a systematic credit control policy where the credentials of a partner are verified with its accounts and market reputation.
Goals ahead
Setting a target of Rs 325 crore for 2009, Mhaske’s next plan includes increasing his retail footprint and opening new branches in upcountry markets. The company will set up three more retail outlets, of which one will be an exclusive Dell showroom. This is expected to be up and running in another 45 days.
The sub-distributor will open its branches in cities like Sholapur, Kolhapur, Aurangabad, Nagpur and Nashik. The long-term plan is for the company to go national. “By the end of 2010 our aim is to become a national distributor representing major brands in the market,” informs Mhaske.
Personal bytes
A Katrina Kaif fan, Mhaske never misses her movies. So is it her acting or her looks? He smiles. “She can barely speak Hindi but I like her expressions, and without doubt she is drop-dead gorgeous.”
A foodie, he likes most Indian cuisine, but Punjabi food is where his heart lies. His ideal weekend getaway is spending time with his family in his farmhouse situated outside Pune’s city limits.
Currently driving a Chevrolet Optra, Mhaske’s dream is to be behind the wheels of a BMW. He has also made plans for life after he retires—he wants to go trekking to explore nature. “I will have all the time in the world to do what I like.”
Meanwhile, the man never shies away from his duties as a citizen—he makes sure that he pays his share of income-tax. “I take pride in saying that I have cleared my accounts. I believe that everybody should do their bit and pay their taxes.” |