THE GAMES MNCs PLAY

Most of you who had read my resume would know that I dwell in IT space, directly managing two companies, one in System Integration and the other, in software development.

Some of the recent developments that had happened in the SI Company that I run propel me to post this blog.

There is this MNC whom we represent in this part of the world. Though times had changed, this company is still in colonial mode. It will effect business only after receiving hundred percent advance, be the customer private or government. However as any other self-conscious company, it doesn’t mind going directly to the customers, bypassing the dealers. On one such occasion this company went to a major Bank and negotiated prices at ‘bone marrow’ levels. The Bank wanted multiple installation of the product across 150 branches and would pay only after completing the installation. In the fairness of things, it would take minimum ninety days to complete the process to receive payment. But how can our MNC supply without getting hundred percent advance? This was where the play came to effect.

The company’s local area manager (AM) calls me and asks me to attend a conference call with the regional manager (RM) based at Bangalore. Now the RM comes on to the line and very condescendingly tells me that he, based on the recommendations of the AM, he had decided to gift us this order worth INR 6 million. For us to execute the same, we would be given four percent commission. Whereas my principal would take the order directly, my company has to pay full amount as advance to it as coverage money. The money would be credited to us after we install the items at all these individual branches located at Godforsaken places across the country and after that, collect the payment from the bank’s HO and send to it. Many times in the conversation, he mentioned the GIFT aspect to me and the New VALUE that they had seen in us (!)

At the lowest rates of 1.5 % per month, by the time we collect the payment and get reverse credit from the principals, we would have incurred 4.5 to 6% expense on the interest itself (for three months). Now add the cost of installation, travel and follow up expenses. That would be another 2 % minimum. In effect, we would spend 6.5 to 8 percent to earn 4%. HOW DOES THE EQUATION LOOK? So much for its channel management! What are we, guinea pigs?

There is yet another case:

Some time back, we went into a jam with an institutional customer to whom we had supplied the most well known MNC IT company’s product. One year later to the supply, the customer realized that they ordered the item with a particular component but what had come inside was another. After verifying this, we went back to the company but it said that there is no chance for the mistaken delivery from them. Having not bothered to open up and verify at the time of delivery, with great difficulty, we organized the entire bunch of documents and communications of the past and submitted to them and then only the company relented. But said that it is a product technical issue. We asked as to why we were not taken into confidence when they decided to supply with a wrong component, they gave us a lame excuse which we are yet to understand. Now what? The customer wants the replacement (mind you, there are 50 numbers).We were advised by the principal that we buy this component from it by paying upfront and give to customer and it would compensate us just half of the amount (the other half is our share of the penalty) over a period of time in the form of commissions on new deals. It was unable to help us in any which way.

Now, we are the ones who had billed the item to the customer. If there is litigation from the customer, we are the one who will face the music. It is our goodwill that goes into dustbin. Eventually we had no other alternative but to oblige the customer. How does it look?

Before starting my entrepreneurship I had been working in IT marketing for about 15 years in reputed Indian companies and I too had handled dealers and channel partners. If there was a deal that had gone wrong due to our mishandling, I had always fought for the customer within my system. I do not know if that is ever possible for these MNC employees. These sales guys are paid fat salaries and immense incentives and they are used to the comfort and therefore, they have no other alternative but to sing the song for their companies all the way. ‘Customer, go to hell, dealer will take care”, That is the dictum these companies and its managers adopted.

And all these MNCs, in their annual reports will mention in BOLD GOLD letter about the highest customer satisfaction index that they had achieved over the year (who does the audit for them, I wonder!). And also the CSR (corporate social responsibility) that they have undertaken for the poor and for the environment, the earth, moon and the stars. The stakeholders sing ga ga for these MNCs and it’s shares goes the bull way!

Who suffer? The small time, small town reseller & dealer for whom this is the only livelihood. He is always sandwiched between the customer & the principal. He is the doer, sufferer & of course, the sucker.

Amen to that!