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Valuepoint Systems makes tactful maneuvers

Anup Varier and Yogesh Gupta | Nov. 19, 2013
Whenever the winds of business changed, Valuepoint made sure that it caught in its sail.

For R.S. Shanbhag, chairman, and MD of the over Rs 270 crore ValuePoint Group, it all started one winter evening in 1991 with a six by four store room in his cousins house, a landline on his desk, ten thousand rupees in his account, and a deep-set desire to create jobs. After a brief stint as an employee in multiple cities, Shanbhag decided to settle in Bangalore and start his entrepreneurial journey.

My first customer was the National Public School Group. It gave me an advance to supply desktops and setup its computer lab, says Shanbhag. That was just the kind of start a budding entrepreneur needed. Many of the parents who came to know of the company after Chairman put in a word of appreciation for the good work he had done too added to his client list. This went on for a couple of years.

The market was highly disorganized with non-standard distributors who were prone to procuring materials from unauthorized sources and selling in the grey market. By 1993, the effects of liberalization had started to kick in and the market opened up for IT with the entry of the big technology vendors like Intel and HP. Shanbhag knew that this was the moment that could make or break him. He reached out to his childhood friend Sampath Kumar and started a venture that has been successful ever since.

The year 1996 proved to be yet another turning point with the split in the partnership between HP and HCL. HP needed a partner who could execute orders that were getting piled up. We latched on to the opportunity and tied up with HP for a partnership which is still going strong, says Shanbhag. It was smooth sailing from then on till the dotcom bubble burst.

The economic uncertainties of the time led Shanbhag to the think beyond technology sales and generate parallel sources of income by diversifying the business. By 2003 I had decided to move out of the transactional business and do something that will complement Valuepoints strengths, says Shanbhag. With interests in diverse fields such as language translation, litigation support, and educational services, the Valuepoint Group today has eight subsidiaries and associate companies, with over $2 million (about Rs 12.2 crore) in investments that has been raised without any external funding.

Shanbhag attributes the success of the groups diversification efforts to his involvement in bigger deals which helped him better understand the painpoints and challenges faced by organizations. This led me to think of other ways in which we could help those organizations and I started seeing allied opportunities in fields beyond IT, he says.

Growing the Army
Moreover, in 2004 one of Shanbhags acquaintances, Gururaj A., joined Valuepoint from Compaq and brought an aggression that completely changed the sales outlook of the organization. Till then, we hardly had a dedicated sales effort and relied mostly on word of mouth business, says Shanbhag. Within the next 15 months Valuepoint breached the Rs 100 crore mark in terms of revenue. During this time it also continued to add newer products and services to its portfolio. However, from 2008 the box business was beginning to get increasingly unsustainable. As was the behavior of the entire channel back then, we were acting as fulfilling centers that would get the bill of material, coordinate with principals, supply the necessary materials, and do the necessary break-fix services, says Shanbhag.

 

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