A Perfect Partnership

For Bangalore-based R S Shanbag and Sampath Kumar of Value Point Systems, success has come through managing their working capital well and competitive pricing. The two now hope to mould the company into one of India’s premier value-added resellers.

“We operate on our strengths and not on other’s weakness.” – R S Shanbag R S Shanbag started Value Point Systems Pvt Ltd in 1991 as a one-man outfit in a 50 square feet room with an initial investment of Rs 1.5 lakh. Three years later, Sampath Kumar, Shanbhag’s classmate and childhood friend, joined the business. And since then, there has been no looking back for the two.

Today, Value Point is a decade old and has about 26 employees on its payroll. The company has moved into a new 2,500 square feet office and has successfully been able to spread its market reach. It is a channel partner for HP, Compaq, IBM, Intel and Microsoft. With a clientele of over 5,000 customers, the duo hope to become India’s premier corporate Value Added Reseller (VAR) by April 2005.

“The secret of our success is simple. We provide good service support that keeps customers satisfied and therefore loyal,” says Sampath, who is now Executive Director of Value Point. About 60 percent of Value Point’s business comes from software technology parks, another 20 percent from corporate organizations, 10 percent from finance and stock brokering firms and the remainder from the SOHO market.

Makings of a great team

Sampath, who comes from a business background and specializes in marketing, feels that he and Shanbhag make a great team because Shanbhag’s experience in the service department complements his own marketing skills. Value Point is growing at the rate of 80 percent every year. In 1996-97, The company recorded a turnover of 1.6 crore, which jumped to Rs 3.5 crore in 1998 and in 1999 it stood at Rs 6 crore. Now Shanbag and Sampath hope to double their sales turnover and touch Rs 11 crore this fiscal year.

The two initially had to invest a lot of time and effort in building a service strong network and a loyal customer base. Almost all of Value Point’s revenues were initially ploughed back into the business. Shanbag and Sampath decided early on that they would practice stringent economic thrift and work with low amounts of working capital.

“We are looking at rapid business growth, so we take our prices and service commitment seriously,” explains Sampath. When Value Point was set up a decade ago, the IT market was still climbing the growth curve, and was a comparatively young industry. However, Shanbhag was confident of their mutual capabilities and decided to trust his business instincts. “We operate on our strengths and not on others’ weaknesses,” says Shanbhag.

Opposites attract

One of the reason why the two have been able to forge an enduring business association is that they have practically grown up together. Sampath and Shanbag went to the same college, shared lodgings and were a perfect foil for each other’s abilities and skills. Shanbhag, an Internet buff, is heavily into yoga and the ‘Art of Living’.

Sampath on the other hand, is a sports freak. Indoor games like carom, snooker and chess are some of his passions. He has also represented his college in carom and snooker tournaments. Unlike other joint-partnerships, their relationship has steered clear of rough patches. In their decade-long association, the two have not been through any major crisis and have managed to weather all most storms well.

Feasibility checks

“Before executing a new business plan we undertake a thorough feasibility study and only then do we proceed with the project. There is therefore no question of a crisis situation arising, because we cover all our bases,” says Shanbhag, whose statement is seconded by Sampath. Value Point has just three marketing personnel. “The rest of the staff comprises of the support and administrative team. The high staff strength in the support team,” says Shanbag, is indicative of the emphasis Value Point puts on support services.

Another feather in Value Point’s cap is an employee retention rate of almost 98 percent. “Employees are like family to us. We are accessible over telephone to all our employees at all times,” he says. That employee satisfaction is highly valued in the company is apparent. There are employees like Sudarshan, Assistant Manager, Marketing, who has been with Value Point for six years now.

“I joined here as a college fresher and basically wanted excitement and good money. Within a year I left, without giving any intimation to the company,” he says. However, says Sudarshan, he regretted his decision almost immediately after leaving the company. “I was really humbled when Shanbhag asked me if I were interested in joining Value Point again,” he recalls. Sudarshan says he realized then that there is nothing more important for him than working with someone he is comfortable with.

Kishore Madgaonkar, Manager, Technical Support, adds that Sampath and Shanbag are respected by their employees because they have been growing individually and have helped others grow too. Shanbhag and Sampath have been able to successfully drive their business building, at the same time, enduring relationships and a stable customer base. A steady rate of growth coupled with intelligent business decisions may well see the company achieve its dream of becoming the country’s premier VAR.