Banking On Software

That was the time when real estate prices were moving southwards and revenues
from software racing northwards. A long-time director in Memon Cooperative Bank
with interests in construction, Mumbai-based Arif Allana sensed then that if he
had to make a success out of business, he had to enter software.

Enter software he did by doing a project on Oracle for New India Assurance.
Oracle saw the potential in Arif and appointed him as the third Oracle
Authorized Partner in the country in 1995. With this began Arif’s successful
journey in software which has made him the favorite of almost all major software
vendors.

"During the past seven years, I have not broken a single
relationship," says a proud Arif whose skills at building rapport with
vendors as well as customers has stood him in good stead. The crowning glory
came this May when Fiona was presented with the Best National Reseller award by
Microsoft at a summit held in Goa.

CORPORATE CUSTOMERS

The software project that Fiona did for New India Assurance was only a
stepping stone for Arif to get into packaged software. Today packaged software
forms the bulk of his business, which he sells mostly to corporate customers.
"Ninety percent of my business today comes from corporates," says Arif.

To remain close to his customers, Arif has established offices in Ahmedabad,
Pune and Bangalore and has plans to reach out to other metros as well. He has
established a country-wide channel network as well which includes over 3,000
partners who do regular business with Fiona.

"Corporate customers and our partners have remained loyal to the company
because they have liked the kind of after-sales service we provide to
them," says Premal Nanavati, Regional Manager, Fiona. He offers instances
of Fiona employees staying overnight at the customer’s site to install and
configure software when the same service could not be provided by the concerned
vendor.

Perhaps it is this dedication that has helped Fiona to get consistent
business from corporates such as Bennett Coleman & Co Ltd, Cheminova,
Goodlass Nerolac, Tata Consultancy Services and Patni Computer Systems, among
others. "Corporates keep coming back to us because of our competitive and
consistent pricing," points out Premal.

That Fiona is a low-cost reseller is affirmed by Raghuram JC who manages
purchases for Bennett Coleman & Co Ltd. Says he, "Fiona not only prices
its products competitively but also provides sound technical support."

HM Parikh of Goodlass Nerolac too is happy with the commercial terms offered
by Arif. "If Fiona can match their rates with faster delivery schedules,
they have the potential to grow even faster," he opines.

MULTIPLIER EFFECT

But one of the obstacles that comes in the way of faster growth, according
to Arif, is the local taxes. Though software carries no import duty, he is
concerned about the multiplier effect that local taxes have on the prices of
packaged software.

"We pay octroi and all local taxes. The result is that we tend to become
uncompetitive," says Arif. He points out that there are parties who evade
taxes and offer products at lower prices.

The existence of double taxation is another blow to software business. For
instance, a product billed in Maharashtra attracts a four percent sales tax, and
when it reaches Karnataka, again a four percent tax gets levied there.

STEADFAST GROWTH

Despite these obstacles, Fiona has shown a steadfast growth which Arif
started in a 150 square-feet office in Bandra, a suburb of Mumbai in 1995.
Within a year, the operations had to be shifted to a bigger place in Jogeshwari,
another suburb.

In February 2001, Fiona shifted to the current location which is a swanky
2,500 square-feet office in Andheri East housing 25 employees. While the company
moved from smaller to bigger places, the revenue too touched new peaks. If the
first year brought in Rs 25 lakh, the revenue for 2001-02 stood at Rs 40 crore.

Arif attributes his success to a right product mix. Says he, "Besides
maintaining a judicious mix of products, taking care of obsolescence is a key
element that has contributed to the success in this business." Fiona offers
a varied mix of products from all the major software vendors including Oracle,
Microsoft, Network Associates, Adobe, Macromedia, Symantec and Veritas.

Another factor that has contributed to Arif’s success is its sound business
practices. Fiona does business only on current-dated cheques. Outstation
shipments are done only on receipt of DDs. "Some call us conservative. But
I would rather be called conservative than lose money," opines Arif.

REVENUE FROM SERVICES

Being in software, Arif is fully aware of the potential that exists in
services and is very keen to improve his earnings from this segment. Currently
his revenue from services stands at nearly 10 percent which he wants to increase
to 15 percent in the current year.

Arif is looking at offering high-end services in database
management with technically qualified people. "I would make no
compromise," says Arif. "If I have to make one with respect to
technical competence, I would prefer losing such an order."

So, to equip his people with sound technical competencies,
Arif has invested heavily in getting necessary certifications from software
vendors. Importance is given to develop competencies at the team level, since
Arif’s philosophy is to build up Fiona as a people-oriented company with
increased focus on services.

With his sight firmly set on services, Arif is visualizing an
overall growth of 30-40 percent this year. "The market conditions are still
dull. Hence, expecting anything more than this would be unrealistic," he
asserts.

With his plans to expand to other major metros including
Delhi, Chennai and Hyderabad and his focus on offering value-added services,
perhaps Arif is underplaying the growth that is achievable. But then, this has
been his personal trait all through. He has kept a low profile, but at the same
time, built an impregnable software empire!

A DQCI Report