A look at Tally's ERP strategy

by Abhinna Shreshtha    Sep 13, 2010

Tally ERPHow do you survive and grow in the ERP market, which is plagued by competition between global heavyweights including Oracle and SAP? This is one question anyone would want to ask Tally, one of India’s few indigenous software developers. However, Tally seems to be confident to garner a sizeable market with the new version of its ERP solution.

At the recent launch of Tally.ERP 9 Series A Release 2.0, all the presentations made by the company officials on the product only dealt with financial data. This shows that Tally cannot think beyond accounting or its solution, even though it’s labeled as an ERP, is just a repackaged accounting solution with some new features. Even Shoaib Ahmed, president of Tally Solutions admitted that, Tally has a tradition in accounting and this is a mindset that needs to be changed.

The ERP market in India is filled with a number of small and big players. Contending with the likes of Oracle, SAP, Microsoft, etc. are other vendors like Sage, Infor, Ramco, QAD, etc. The market leaders are undoubtedly SAP and Oracle, so how Tally intends to compete in this space is an intriguing question.

So far, Tally has focused on the small office and home office (SOHO) segment. Hence it is not surprising that of the 250,000 companies using Tally ERP, a majority of who fall in the SOHO category, while the remaining are large enterprises. Explaining this trend, Avinash Sharma, president, Tally Solutions said, “Our typical customer is a small organization; he does not need fancy features in his ERP. The most important need for his company is to automate financial data and so this is what we provide him”.

Though Tally has been successful in penetrating the SOHO space, it needs to change its strategy when it plans to tap the large enterprises next year. Explaining the change of startergy, Ahmed said, “Our approach towards ERP is to identify the key pain areas for each category of customers (small, medium, and large) and create solutions that focus on that particular issue.”

He further added, “We have discussed SaaS internally but at the end of the day we need to see whether through SaaS we are solving the customer’s requirement or our own delivery problem. I feel that we already solved the customer’s problem a long time back by making Tally a light product and easy to install.”

In an interview to CXOtoday last year, Bharat Goenka, CMD of Tally Solutions had stated that the company had little faith in cloud computing. Even Sharma dismissed cloud computing as a priority at present. “From a practical aspect, the price of ownership, security, comfort, etc. needs to be provided to the client. We can do it anyway we want and not necessarily through the cloud,” he said.

For years known for its accounting solution, Tally has taken a big leap by entering the ERP arena. So far things are moving pretty much as planned for them, but how much it plans to sweeten its ERP offering with value additions, different modules, post sales service, etc. is yet to be seen. The company currently has third-party partners who develop applications for business intelligence, analysis, etc. for its ERP solution. Therefore, this ecosystem also needs to be nurtured so Tally customers can get access to more useful applications.

As the bigger players start expanding their horizons and as Tally seeks to explore greener pastures, a ‘David and Goliath’- esque collision is imminent. How successful Tally is will depend a lot on how ready the company is to break away from its roots and embrace technologies and concepts that are perceived as the future.