"Building institution is my number one priority"–Gopal Srinivasan

Chennai-based TVS Electronics Ltd (TVS-E), a leading peripheral manufacturer and part of $ 1.5 billion TVS Group, is rationalizing its business approach with the aim of building a premier business institution in the country. Being the chief architect of this project, Gopal Srinivasan, Director, is leading the initiatives, in what he terms as ‘from the back-end’ instead of calling it ‘from the forefront’. He believes that good institutions are built and driven by leaders who do it behind the screens.

Srinivasan is taking several new initiatives with the aim of making TVS-E, a leading name not only within India but even in the global market. The company is shifting gears and getting ready to operate in zero duty regime soon. Nurturing Electronic Manufacturing Services (EMS), the company wants to take advantage of the huge opportunity in BPO covering Contract Manufacturing Services (CMS), ESourcing Services (ESS) and Technology Maintenance Services (TMS) including Field Support Services (FSS) and Tech Support Services (TeS). Simultaneously, the company is strengthening its product portfolio and TVS-E brand in the market which will continue to contribute significant revenue and hold a major share in the turnover. Solutions Group is the other area where the company is working on sales effectiveness and customer relationship management solutions for the customer. To better understand the company’s new business strategies and roadmap, Asim Raina and

S Gopikrishna of The DQ Week, caught up with Srinivasan recently for an extended discussion.

What are the initiatives being taken to make TVS-E a premier business institution?

An institution is known by its team and TVS-E has inducted some leading industry veterans in the advisory board like Dr Sridhar Mitta, Srini Nageshwar etc who are adding value to the company. The company is also giving more weightage to professional courses while selecting people and we hold regular meetings among employees to share ideas and experiences, breaking the conventional work style and culture. There is a tremendous improvement because of this and women are given more opportunity in certain divisions (for example automotive), emphasizing performance and leadership in work.

What changes have you made in your channel structure and what are the new strategies for this community?

With TVS-E having all the three major national distributors representing its products, now our prime focus would be on building channel relationship and be close to the market. Meanwhile, we have empowered our Channel Managers by introducing direct reporting structure and cutting out two layers (hierarchy). Across the country, all the 38 Branch Managers will be directly reporting to only three Regional Managers, who will keep a close watch on the market develop-ments and movements. However, the three branches in Delhi will continue to function independently. This high empowerment gives tremendous attachment and closeness to the market. The process started from April 1 and during this AMJ, we will complete the process and before the end of this year we will have 50 to 60 branches across the country, following the horizontal reporting structure.

What prompted you to go in for such a drastic restructuring?

The main purpose of restructuring is to be close to the market and offer the right solution. We want to give more products in the next two-three years. TVS-E will keep expanding its product portfolio and be a leader in each segment. Recently, the company has increased its marketshare in DMPs from 31 to 40 percent. Similarly, in keyboards, we hold 25 percent of the market. We are making a big come back in UPS and more products are to be announced during this quarter.

TVS-E is also spreading its wings by setting up an International Marketing Development (IMD) team, for the ASEAN, Middle East, Africa, China, Europe and South East markets. There is a good potential for DMPs and supplies in these markets and by the end of this year, we will have significant business coming from international markets. TVS-E is also parti-cipating in many international trade shows such as Cebit, Gitex, Falcon and Computex, to increase the reach.

Within India, from this year, we will have exclusive focus on enterprises and govern-ments for large accounts and direct sales. The company has recently bagged a major order from IT Department in Delhi, worth Rs 10
crore.

What are the initiatives being taken on the EMS front?

Last year, our focus was mainly on automotive design and we had seven account managers in North America and over 200 people in Tumkur (Karnataka) factory working on automotive projects. This year, our focus would be on electronic design. Contract Manufacturing Services (CMS) is the other major area to bet on and there is a huge opportunity within India and in nearby markets. With more enterprises to be automated, PC penetration growing and teledensity increasing, India is poised for a big growth and companies like us can play a leading role. The hardware market in India will be at Rs 65,000 crore, in the next three years. With most of the hardware manufacturing happening within the country, India can be a hub for India itself with huge demand coming in. Motherboards, LCD monitors, set-top boxes, cellphones, to name a few, will be the killer products in the market. However, one should not make any mistake in delivery, price and quality, which will kill them. Inventory management is also going to be very critical as long supply chain equals death. Contract Customer Support is the other area where the company is focussing a lot.

What would be the ratio of revenue between the two business groups–Products & Solution (P&S) and Electronic Manufacturing Services (EMS)?

P&S swill be the major revenue earner with 82 percent, while EMS will contribute 15 to 18 percent in the total turnover. For the fiscal ended December 2003, the company achieved a turnover of Rs 262 crore, registering 19 percent growth over the previous year. TVS-E has got back to growth mode in 2003 after near flat revenues in 2002 and 2001.