The company has to compete with bigwigs in the infotech industry like HCL, and Hewlett Packard. But it is undaunted by this and is concentrating on retail markets. The company directly imports a range of Packard Bell Computers from the US and markets them in India. Computech was the first company to launch the 333 Packard Bell in India recently at a price of Rs 1.35 lakh.Informed computer users buy their hardware requirements from Computech International because the price it quotes is less than that of HCL. This is made possible as the company directly purchases the components from the US company instead of from intermediaries. This saves cost, which is passed on to the customers in the form of reduced price of the hardware.

Computech International does not have many dealers and offices. It has only eight offices in India and around 500 dealers. In the computer industry, how many dealers you have is not important, but how many quality dealers can give good after-sales services counts. While selling Packed Bell and Toshiba machines, customers have to be satisfied about the after-sales services they will get. The company is able to sell Toshiba machines as well at a discount of around 30 per cent to the competitors' price.

But the company is going in for economies of scale. It has invested Rs 6 crore in a new factory in Silvassa, which will double its capacity formanufacturing computer hardware. Manufacturing at Silvassa also gives the company sales tax benefits. But the company should concentrate more on software products, which give better margins to firms than the hardware business.

In the eighties, the company was concentrating only on software. It entered into the hardware business only in 1996 to become a complete solution provider. From here, the company wants to enter the big league through horizontal expansion and vertical expansion. It wants to establish contract EDPs for firms in India and abroad. Supply of hardware and software, networking, training, R&D, maintenance, contract EDP - all these activities will take the company hopefully into the big league. ERP offers a new vista for the company, which it can use effectively to push its turnover and profits.

The company has increased its core activities in software development and seismic data processing for oil exploration. Computech has a tie-up in software exports and marketing with the $25-millionM/s Amex Inc of the US. It is now trying to use this tie-up to develop enterprise resource planning (ERP) packages for mid-size companies in India and abroad. There is a misconception that ERP is meant only for multi-million turnover companies and not for mid-size firms. Computech is trying to shatter this myth. Only these kinds of innovative activities can take the company to a turnover target of Rs 300 crore in the year 2001.

What is more, the ERP packages will also be launched in the US. Amex Inc will market the products under one of its own brand names. Worldwide, the ERP product market is dominated by big names like SAP and Oracle. However, as the company is concentrating on the lower end of the ERP market and pricing its products at around Rs 5 lakh each, there may not be much competition. Computech developed its first ERP programme by deploying 40 programmers at an investment of Rs 5 crore over a period of three years. But its product is yet to be launched in India because of two reasons. First,there is the fear of piracy. Secondly, there is a doubt whether mid-sized companies will really go for an ERP package. Mid-size companies are mainly family-run firms in India with a distinct characteristic culture and workstyle. As ERP requires a change in the work culture, it is doubtful whether the mid-size companies can really change themselves to fit into the ERP culture. However, computech should one day or other in the near future be successful in expanding its ERP products in India also.

As a diversification drive, Computech signed an MoU last year with an Italian company M/s Dallestra to produce value-added, eco-friendly zeolite at an investment of Rs 60 crore. The deal entailed a buyback arrangement for two years up to 50 per cent of production. The initial capacity planned was 25,000 tonnes per annum (tpa).

At the moment, the corporate world is interested in finding out whether Computech International Ltd, or for that matter any computer company can introduce ERP for mid-sized companies inIndia successfully.

(The author is a manager with Indian Bank)