Known for its prowess in the logistics & transportation domain, the company wants to build up the lucrative SCM side of its business. By Prashant L Rao
The software product business is one that most Indian companies do not venture into and even if they do, the bigger players typically get a tiny fraction of their revenues from this source. However, selling software products, although a lot tougher than delivering low-cost services, has its own rewards in the form of sticky relationships, almost assured revenues from long-time customers and substantially higher earnings per employee.
Four Soft is a specialist in the transport & logistics field. It is now attempting to take on the big boys of the ERP world in the lucrative Supply Chain Management (SCM) arena.
A minnow compared to the multi-billion dollar giants of the ERP world, Four Soft is leveraging its expertise in the logistics vertical and using that to transform SCM in a rather unique way.
Rakesh Kumar Munigala, VP- Product Management & Marketing, Four Soft Limited, explained, “ERP systems do the logistics for a local factory. However, when you are talking about a large MNC, it sources goods from factories spanning the globe and it’s much more cost-effective and profitable, to consolidate shipments from multiple facilities in different countries, and ship them in one big consignment. Our solution lets them do that.”
The company’s already doing business with Panasonic where it helps the giant handle its outbound logistics. Now, it wants to get into SCM in a big way and sign up MNCs who need the kind of SCM/logistics expertise that it has in spades.
Four Soft started off by offering solutions for the Logistics & Transportation vertical. Over time, it has built up a strong customer base in Europe, US and Asia for that part of its business. This is, at present, the biggest chunk of its business. The company hopes that it will be able to tap the more lucrative SCM segment in a big way in coming years.
In terms of technology, the company’s solutions have been architected on top of the J2EE platform. Four Soft has tapped into the mobility zeitgeist and mobile enabled its solutions. In a sense, this has always been the case in the logistics vertical where, earlier, specialized PDAs were employed for tasks such as warehouse management. Today, smartphones are being employed for things like a FMCG salesperson on the field getting the real-time status of stock in his company’s warehouses enabling him to close the deal on the spot.
Another example of technology helping logistics companies optimize their business is with regard to IFRS where global companies often recognize revenue only on receiving the POD on a consignment. With a PDA, the courier person can scan the shipment’s barcode, take a photograph of the person accepting the delivery, the location can be captured using GPS and the customer’s signature captured on a touchscreen. In this manner, the POD, so to speak, can be captured instantly enabling that revenue to be booked at the time of delivery.
The other technology trend that has had an impact on the company’s solutions has been the Cloud. Four Soft offers its solutions both as on premise and through a SaaS model.
The company is looking to consolidate its business this year and focus on squeezing more revenue from existing clients. It has already improved its profitability by consolidating offices and the like.
Being a product company, it hasn’t faced the worst of the ongoing uncertainty in Europe or the slow economy in the US. The AMC business has continued to deliver unfettered by the turmoil although some decisions, in Europe though not in the US, have been deferred. Munigala remained confident that moving into SCM where the deals were more lucrative would help the company grow even in the tough economic climes that exist today.
