The number of employees of the company has come down from its peak of 225 to 150. The company claims that it has brought down its expenditure by more than 50 per cent in last six months.
In an exclusive interview with The Financial Express, ESS chairman and managing director Anil Bakht said that the company would be able to achieve Rs 50 lakh
profit on a turnover of Rs 8 crore in this financial year ending March 2002.
“Looking at the recession, we had taken a decision to reduce our cost burden early this financial year and implemented measures in two phases in June and September. The downturn also taught us to acquire or retain only those clients who were profitable,” said Mr Bakht.
There was a time when the company was spending substantial amount of money and effort to acquire clients and was also subsidising the projects sometimes, he said. “Some of the large ERP software players are still doing it because they have the financial muscle. But, we cannot afford to continue doing so and will have to be pragmatic in our market approach,” he added.
ESS, which was started in 1995, remained focussed on development of its own enterprise software product called Makess. Mr Bakht claimed that ESS was a national player in the ERP space and was competing with multinational ERP companies like SAP, Baan and JD Edwards.
“The large corporates have squeezed budgets but they still need software to improve their productivity. They are taking decisions in favour of ESS as it needs less investment and implementation efforts,” said Mr Bakht claiming that the company had won six new clients in the last one month including Hathway Cables, Polar Pharma, Sterling Tools, etc.
ESS has received two round of venture funding so far from Intel, Citbank and a Dutch development bank. The company got around $2.3 million in June 98 and $1.7 million in June 2000. At present, the venture capital firms together hold around 86 per cent stake in ESS. The rest is with the promoters.