Deskera’s cloud-based enterprise computing software is helping people such as Sushi Tei’s David Ng store and deliver their goods more efficiently.

When Shashank Dixit, founder of enterprise computing company Deskera, first visited Singapore in 2008, he slept on the cold hard floor of Changi International Airport.

A customer in Mumbai wanted him to implement the software at his Singapore office but did not pay for his hotel. “The floor of Changi Airport is better than most hotels in India. There used to be a food court in Terminal 1, where I could I get a decent vegetarian meal for a dollar,” Dixit recalls the experience fondly. “Sometimes, I stayed for 10 days.”

From 2008 to 2012, Dixit made many trips to Singapore to hawk his software to small and medium-size enterprises (SMEs). “I sold door-to-door. I know some tie-wearing guys who won’t do that. But it was the best thing I could have done.”

He found that while Singapore had a first world economy, many SMEs still used third world processes.

“They do the same things many SMEs in mainland China and India do and their processes are not any more sophisticated,” says Dixit.

The SMEs turned Dixit down because, at that time, the software did not have enough functions. So, Dixit had to build up the program one function at a time. “Each time they said Deskera couldn’t do this or that, I went back to India and developed them.”

Deskera is now a cloud-based integrated business platform that helps carry out many of the mundane and tedious tasks at work. These can range from book-keeping and stock-checking to payroll and human resource management. It can also file IRAS Board-approved taxes, manage employees’ appraisals as well as company projects. By using cloudbased solutions, users are spared the hassle of hardware complexities such as upgrades and breakdowns of physical servers.

Last year, Deskera raked in revenue of $14 million; this year, it is expected to bring in more than $30 million. It has also more than 40,000 paid users, mostly from Singapore, Malaysia, Indonesia and India.

But what makes Deskera successful is its affordable price of US$65 ($91) per-user-permonth price tag, making it the go-to solution for the Asian SMEs. Its customers include Sushi Tei and SATS Creuers, as well as MNCs such as Google and Starbucks. Deskera also has a partnership with StarHub and Google to provide better security for customers.

Dumping school for start-up
Dixit’s dream to start his own company writing enterprise software took shape more than 10 years ago, right outside his university dorm in Kanpur, India.

“The campus was located right in the middle of the cotton-manufacturing hub of India and there were lots of small-scale companies in the surrounding area, which were growing,” he recalls.

The owner of one of the companies approached Dixit when he was a third-year student and asked him to build software to enable his two offices in different places to work on a common set of accounts.

“What we built then was similar to the-cloud- computing of today, where you could get the latest accounting data from different offices,” he explains.

Word spread quickly, and soon other companies were approaching him for help. In six to eight months, he was coding software for dozens of companies for free.

The following year, he dropped out of university. “You go to university to study and get a job, but I got a job already in my own company. So, I left,” he explains.

He managed to persuade four other IT guys — one of whom was his childhood best friend — to work for him in a dingy flat, although he still could not persuade people to pay for his work.

“At that time, no one wanted to buy accounting software from a kid,” he says.

But that did not deter Dixit in the least. He says, “At some point, I figured out that the product would be hot. Enterprise software is very slow to catch on, but success is proportionate to hard work.

“On the contrary, consumer software such as Facebook grows quickly. But chances of failure are also very high. Just look at MySpace. Your effort is never proportionate to success. Luck is.”

So, for the next six years, he lived without a salary. “I prayed to God and got help from friends and family.” Meanwhile, his mother paid his rent.

In the end, he also found a way to charge his customers. “I realised the software I made needed maintenance. I came up with a proposal for the companies to pay me INR100 to INR200 a month,” he says, “I got 500 paying customers this time round and it was enough to get me by.”

Trial by fire
Still, Dixit admits achieving success with Deskera has not been easy. He remembers how challenging it was to break out of India to the rest of Asia.

“In those days, there were no investors. Trial by fire, I’d say. But now, it is easy. [Investors] throw money at you.”

Investors began showing interest in Deskera about three years ago. That was about the same time Deskera could do most things SMEs wanted and sales quickly hit a sweet spot.

“Today, we have close to 90% of processes you need in a company, thanks to the countless times I was rejected,” he says. Deskera now has country-specific GST services and language-specific functions. In addition, the company partnered IBM, Hewlett-Packard and NEC to provide more complete solutions to customers.

But Dixit is not stopping there.

“Next, I want to create a project plan software. If an employee goes to the project office, for instance, he can be tracked on the employer’s phone,” he says, “It is not about monitoring. It is about improving accountability.”

SME boom or bust?
More than 80% of Deskera’s revenue today comes from its four major markets — Singapore, India, Indonesia and Malaysia — and most of its customers are SMEs.

Singapore’s released recently annual SME Development Survey found that 47% of respondents did not expect revenue growth this year amid a lacklustre global economy. This is up from 40% last year.

SMEs are also facing a manpower crunch. The local employment growth rate is expected to slow dramatically to 20,000 a year for the rest of this decade from 95,000 in 2014.

To counter the tight labour market and a slowing economy, many SMEs are turning to automation and IT to raise productivity. According to DP Information’s chief operating officer Lincoln Teo, 68% of SMEs in the SME Development survey invested in technology and innovation, up 64% from last year. Among two-third of firms affected by the tight labour market, 74% said they planned to improve productivity by cutting off low-value jobs and enhancing their human resource capabilities.

Dixit saw that one way to boost productivity was by using enterprise software such as Deskera to automate back-end office processes such as payroll and inventory management. Competition in the field of enterprise resource planning is keen, though. There are Germany’s SAP, Australia’s MYOB, as well as Oracle and Salesforce from the US. All four are bigger than Deskera, have global reach and can cater for more diverse industries than Deskera. For instance, Oracle has enterprise software specifically for engineering companies.

Still, Dixit argues, their solutions are a lot more expensive than what SMEs can afford. “It is very hard to build a suite of applications and sell them at a price suitable for SMEs,” he says. Deskera’s selling point therefore must be its affordability.

Deskera customers agree. Both F&B chain Sushi Tei and data management company PTC System say many vendors are charging their enterprise software packages by the number of licences. “If you want to have four or five staff in the office to access the software, you have to pay for four or five licences. That is not feasible to us. Deskera comes in one price,” says Sejal Adani, finance manager at PTC System, which started using Deskera in August for human resource management.

Many software vendors also cater specifically for the manufacturing industry, which makes it more difficult for companies in non-manufacturing areas to use their software. “To be fair, there is other software that can do what Deskera can do, but some are more than double Deskera’s price and, if you want additional functions, most times you end up paying even more,” says Janice Lee, Sushi Tei’s assistant director of administration and finance. She adds that Deskera’s software was also designed to be easy to use, as there was another F&B client before Sushi Tei.

Stock-taking made easy
Sushi Tei uses Deskera for inventory management. When the company bought a 2,000 sq ft warehouse near Lower Delta Road in 2013, they decided they needed a software to facilitate orders from their outlets to the new warehouse, as well as from the warehouse to their suppliers.

“We wanted a cloud system because it is instantaneous and our storekeeper and our restaurants can keep track of the stock being ordered. We used to use Excel spreadsheets to keep record of stock and fax invoices to each other. There were a lot of discrepancies,” Lee explains.

“The system also allows us to monitor order and re-order patterns over a period of time, which helps us purchase stock more effectively and reduce wastage,” she says, adding that Sushi Tei’s warehouse is now entirely operated by one storekeeper, David Ng, thanks to the enterprise software. Ng is also Sushi Tei’s driver.

Lee admits it takes a lot of time and money to fully integrate the entire software into the company’s day-to-day operations though. “You need to train your staff, you need to troubleshoot and you have to talk to the software vendor about your needs time and time again.”

For these reasons, many SMEs just abandon the idea of implementing a new system altogether, she says. A research by insurance firm QBE shows that only 38% of smaller SMEs are concerned about planning for their businesses. Most are more concerned about growing profitability as abuffer for difficult times.

“For companies to automate to increase productivity, you need someone to push really hard in the company,” says Lee.

Locally, it is SPRING Singapore that encourages SMEs to increase their productivity by giving them vouchers and grants. To be clear, the grants are not meant specifically for enterprise software solutions but productivity solutions.

For example, SPRING’s Innovation and Capability Voucher supports bite-sized productivity solutions, while the Capability Development Grant supports larger-scale enterprise software projects by defraying up to 70% of certain costs. Sushi Tei took the latter grant when they bought Deskera’s software.

Asian giant
Dixit’s next mission is to turn Deskera into an Asian enterprise software brand to be reckoned with. “Name one Asian enterprise software brand that is well known. Even in India, there isn’t a single brand in this space. We hope to become the Twitter for enterprise software. Not the cheapest, but the one that provides the best value for money,” he says.

That is because many SMEs expanding overseas tend to go for the more established names. Singapore’s Atlas Sound & Vision (ASV) adopted an SAP system in 2013 to sync different processes from sales to accounts.

Sherwin Siregar, CEO of ASV, says: “We use SAP because we wanted a robust and established system whereby we can leverage their experiences to serve our needs. SAP is the largest in the market, so we took it.” He admits that the system was expensive, costing them close to $700,000 in total.

Dixit says one way to increase the mindshare for smaller and younger players such as Deskera is to do an IPO. The purpose is not to raise funds, which he has enough of, but the general perception is that a listed brand is seen to be more trustworthy in Asia. Alternatively, he could follow in Oracle’s footsteps and go on an acquisition spree — the US firm has acquired nearly 100 companies since 1994.

Ultimately, what should work in Dixit’s favour is the growing demand among SMEs for cloud-based solutions. In Asia-Pacific, demand has been rising in the last few years. Frost & Sullivan research estimates the market in Asia-Pacific was worth US$25.7 billion last year and will grow more than 20% from 2014 to 2019 to reach US$65.2 billion. Even Siregar has hinted that they are looking for cloud-based software, though Deskera is not yet on their radar.

In any case, Dixit remains undaunted.

“The SME market is huge,” he says. “We do not want to be the fastest-growing. We want to be the company that, decades from now, is still going to be No 1.”

This article appeared in the Enterprise of Issue 708 (Dec 21) of The Edge Singapore.