Bharat Goenka: creating a product that is simple to use
The company has continuously upgraded its product over the years, graduating from basic accounting software – PFA – to flagship Tally. ERP 9 (launched in 2009, it was the first ever ERP solution for SMEs), was followed by an array of versions under the ERP 9 series in subsequent years, with upgraded functionalities and technology.
Tally Server 9 (data server for growing enterprises) was launched in 2013 and, more recently TallyPrime launched in 2020 – this is a next generation business solution. Tally has played a major role in the country’s transition to the VAT regime (2004), and has also led the GST transition for SMEs in recent years. Buoyed by its Indian success, the company is carrying out VAT transitions in the Middle East as well and looking to replicate the Indian model to other overseas locations.
“Our big focus has been adding more and more features, capabilities and functionalities every year,” says Tejas Goenka, 32, managing director, Tally Solutions. “We moved from core accounting in the late 1990s to compliance domain (VAT, and then GST) in the mid-2000s and, over the years, have been building on that. Recently, we launched TallyPrime, the business solution for next generation businesses.
Now, we are aggressively looking to rewrite and redo our core technology, building it for what we think will be a more connected world and a connected environment. Besides, we are now looking to serve the massive landscape of small retailers or kiranas with something that will help automate them in a convenient manner.”
Both VAT and GST have been defining moments for the company, as they helped it strengthen its presence further in the market. Apart from introducing innovative and relevant products, the company also took a conscious decision to undertake a massive awareness drive in the market, which eventually helped it expand its customer base in a significant manner. In 2004, when VAT was announced, the company also disclosed it was undertaking several new measures and it went on to ramp up its capability in a significant manner.
Tally Solutions took a big bet and increased the organisation’s size, while increasing its head count by almost 10x. It also acquired a few companies and focussed on educating its customers and created its marketing efforts around that. It launched Tally 7.2, which was the VAT-ready Tally and that really helped the company move into another domain and another league. In 2016, Tally Solutions was shortlisted as a GST Suvidha Provider to provide an interface between the new GST server and taxpayers, and in 2017, the company launched its updated GST compliance software.
“The landmark moment in our history has been around the VAT timeframe, where we focussed a lot on educating customers – as to what VAT will be and how it impacts businesses,” explains Tejas. “The second landmark moment was with GST, where we took a similar approach and focussed on educating and providing the right tools to help businesses comply. In fact, these two events have redefined our approach completely and provided the much-needed momentum to commence our next growth phase.”
“We were never compliance-related software before, just accounting and inventory,” adds Tejas. “We moved into the compliance domain later. With this we were able to address the piracy problem to a large extent and also strengthen our distribution. We moved from 600 partners to about 18,000 partners in the short period of two to three years. A few years later, we launched our flagship product, Tally.ERP 9 and that ran for about for 11-odd years. It was the product with which we also started seeing the opportunity outside India.”
Tejas: adding more and more features
Superior customer experience
After GST was introduced, the company managed to reach about 450,000-500,000 new customers in addition to the 10 lakh-odd customers it already had. In the last four years, it has already doubled this to about 20 lakh customers and positioned itself afresh, growing at a CAGR of about 25 per cent.
Today, eight out of 10 businesses use Tally’s business software. It enjoys a customer base of over 20 lakh businesses (total: 14 million users) across 100 countries. Going forward, Tally has an ambitious plan to expand its customer base to about 1 crore in the next three to four years. Apart from SMEs, which have been its focus, Tally software is also subscribed to by several large companies belonging to the Tatas, Birlas, Reliance group, UB Group, Asian Paints, MRF and Britannia Industries. Several Central and state government agencies have also reposed their trust in Tally. In the last decade or so, the company has expanded its presence in overseas destinations and today 10-15 per cent of its customers are from the Middle East, South East Asia and Africa.
Apart from offices in India (regional offices in 20 major cities, while Bengaluru has a corporate office and an R&D centre), the company, backed by 950 employees (a products team of over 300-odd people), has opened offices in Kenya, Dubai, Saudi Arabia, Oman, Bahrain, Jakarta and Dhaka. Besides, it has partners in several countries in Africa – Nigeria, Uganda, Tanzania and Ghana, as also in other South East Asian locations. In fact, Tally boasts of having a robust network of over 28,000 partners, which ensures simplified distribution and easy availability of the product both in India and abroad. Moreover, these partners help deliver superior customer experience in sales, support and services.
The company has managed to establish the country’s largest and most profitable partner ecosystem in a market where it successfully competes with large players as also a big chunk of small and regional vendors like Marg, Busy, Zoho and Cleartax. Tally is priced at Rs18,000 for single users and Rs54,000 for multiusers. Besides, there are annual subscriptions of Rs3,600 and Rs10,800, across these two categories. The subscriptions help customers receive upgrades/modifications to their software on a regular basis.
“We have been using Tally since 1995 and the product has surpassed all our expectations by continuous enrichment of the software capacity, enabling users to adhere to and comply with the legal and mandatory requirements of applicable laws,” acknowledges V.M. Krishna Kumar, partner, Kumar & Sudhakaran, a Kerala-based CA firm. “While accounting, statutory and compliance are our most used features, the several reports generated are a value-add for us. Tally has provided a user-friendly, cost-effective business management solution with constant upscaling of user modules.”
One attribute that has helped Tally software immensely in enhancing its popularity among businesses is its multi-user functionality. “We launched the world’s first and still the only multi-user version, which allowed us to get about 500,000 multi-user customers, who have absolutely no IT background which would enable them to use software,” recalls Goenka, while narrating the journey of Tally.
“Today, they are able to run software without having a client server type of model, which most software providers tend to use. No factory has an IT manager and they outsource IT; so, if anything goes wrong, they must be able to recover everything themselves – another landmark achieved in the late 1990s and early 2000s. During 1998-2000, we launched our first multi-user version, which started making us popular even amongst the large organisations. Several MNCs were using the product and, so, we could customise the product for these MNCs. Though our focus on SMEs remained, this really opened up the market.”
Sheela: never allow yourself to be in a comfort zone
Shyam Sundar Goenka had a small wooden bobbin manufacturing unit (used in textile mills) in Kolkata. He moved to Bangalore as the business environment in Bengal had deteriorated due to the Naxal movement. In 1969, he set up a similar kind of unit for wooden bobbins in one of the industrial estates in Bangalore, where the state government was also offering incentives to attract businesses. The SSI unit would supply these bobbins primarily to Binny Mills (almost 70 per cent of the production) and some of the other textile units in south India.
In the early 1980s, the textile bobbin business of the Goenkas started facing the brunt of the market slowdown. By mid-1980s, the bobbin business was facing a major crisis, as Binny Mills, its major customer, had to shut down its operations in Chennai due to a cyclone. That was when the Goenkas seriously started looking for other business avenues.
Meanwhile, during the course of his business, Goenka Senior wanted to automate his accounting operations but found the then available accounting software to be complicated and difficult to use. He asked his son to work on that and come up with a solution. Goenka had just completed his graduation (mathematics) and joined his father’s business. He was a child prodigy who had been taking an interest in computer and related subjects since his early days. Sensing his interest, his father bought him an IBM PC on which there were small programs that he would keep fiddling around with and learning on.
The Goenkas realised that there was a big void in the market and that this was an avenue that could be pursued as a business in the future. Moreover, the IT sector was gradually shaping up in India. After six months of relentless efforts and multiple rejections by his father (who, though hardly versed with computers and software, was very certain how they should work), he came up with an accounting software, which was written without using code and hence was simple and could be used by anyone. This MS-DOS-based codeless software was PFA and the entity was Peutronics. Thereafter, the Goenkas never looked back. The PFA software became a big success, as small businesses (and even large companies too) found it convenient and simple to use.
“Initially, my father was searching for a business product for our own textile business,” recalls Goenka. “However, he later decided to take it as a business altogether and he looked to shut his existing business. He examined multiple products, but couldn’t make sense of any of them. ‘When I’m buying a car, I want to be a driver and not a mechanic’ was his contention. Similarly, he was looking for a product that would help him run his business – not his computer! Every product he was looking at required him to change the way he thought about his business. So, because I was interested in software, he asked: Can you do something? So, I tried to solve his problem. After six months, he concluded that the product should be something that the country should also use.”
Nupur: contributing to the world of entrepreneurs
Tally grew by leaps and bounds. While Goenka focussed on the product development side, his father, a commerce graduate from Kolkata, was instrumental in creating awareness and selling the product in the market. He would move around, taking a computer along with him and give demonstrations to customers.
“Though my father was not software-savvy, he was good at highlighting the benefits of the product and convincing his clients. Our most popular product, Tally 4.5, really changed things for the company and, today, 20-25 years later, customers still wonder if any new product is as good as Tally 4.5,” says Goenka.
Over the years, like any robust organisation, Tally also underwent a transition. The father and son duo took the company to new heights. In 2002, Goenka’s father, then chairman and managing director of the company, passed away at the age of 70 and Bharat Goenka became managing director, with wife Sheela Goenka succeeding her late father-in-law as chairperson. In 2019, Bharat’s son Tejas, who had joined the company as executive director in 2011, was elevated to the post of managing director.
An engineering graduate (an alumnus of University of Pennsylvania), Tejas spearheads the Research, Engineering, Product Management, Strategy, and Business Development functions. He focuses his efforts on bringing in greater strategic and operational effectiveness across the organisation.
Meanwhile, Goenka’s daughter, Nupur, 30, is also part of the core management. She is the Executive Director at Tally Solutions and guides Corporate Finance, Corporate Information Systems and Cloud Operations in the company. She is also the Managing Director and Co-founder of Clustr, a big data and analytics subsidiary of Tally Solutions. A Northwestern University alumnus, Nupur holds a bachelor’s degree in Cognitive Neuroscience and Business Studies.
“Our focus and time has been going into creating and defining a future and contributing to the world of entrepreneurs by giving them the tools to run their business, and supporting them in adding value to the world. We have always focused on building foundational technologies to achieve this,” says Nupur.
“I have been blessed to have had a very interesting and enriching journey with Tally and I’m very grateful as the dreams and aspirations of the company has permitted one to explore uncharted waters. I believe one of the most important ingredients of our success would be a message to both my children and the leaders who are now at the helm and steering the ship, never allow yourself to be in a comfort zone. We must work hard and be willing to unlearn and take new risks if we want to realise our destiny,” states chairperson Sheela.
Tally is all set to commence its next growth phase now, where it is looking to focus on the connected environment. Besides, it is also putting up an ambitious plan to tap the massive landscape of small retailers (kiranas) in the unorganised sector, where it is looking to automate them (billing software). There are about 70 million mom-and-pop shops in India today and they are the ones the company want to be associated with in the coming years.
Tally has set a target of taking its customer base to about 10 million businesses in the next three to four years
A defining decade
“We see the next decade as a defining decade,” forecasts Tejas. “One of the things we are doing is changing our underlying technology to cater to what we believe will be a much more connected world. We believe that ERP can go even beyond the organisation and build integration with other systems to be able to give information in one place so that better decision-making can actually happen and better operations can be done. That is the foundation on which we are building our future. With this foundation, we will be looking at a few more areas on which we want to focus.”
“Secondly, we have big aspirations in the retail market in India,” he adds. “While saying this, I feel sad for the kiranas. We have been able to change access to accounting software for so many million businesses, which wouldn’t have had that access otherwise. We will work on the ability to reach out to the kirana stores, which have never really had the chance to optimise or automate. That is another area we want to build up.”
Moreover, the company wants to move more aggressively outside India. “There is large opportunity in the markets mentioned – the Middle-East, South Africa and South-East Asia,” believes Tejas. “They are similar in their way of doing business; they are supply-constrained markets rather than demand-constrained ones. We have an opportunity to take the lesson that we learned here and expand in those markets as well. This is broadly how we are looking at the future; we have this underlying belief of how the industry will move and how we can move the industry forward.”
Tally has positioned itself quite well in the market and looks as if it’s on its way to achieve its set target – an expansion of its customer base to about 10 million businesses in the next three to four years. The company has already proved its mettle in the past. VAT and GST have been the defining moments for it, as it took full advantage of the opportunities which presented themselves. In the last few years, the company has ramped up its capability significantly; it now looks to be ready for exploring other emerging opportunities in the market. However, it remains to be seen how it executes its strategy and action plans in the market in the coming years.