SAP launches ERP version for SMEs

G Sankaranarayanan / Chennai

SAP India, which has registered a licence revenue of Rs 114.2 crore in 2002 (according to IDC), has unveiled its strategy to take on the regional players, who at present dominate the enterprise applications market in small and medium enterprises (SMEs) in India.

In alignment with SAP’s global vision of becoming the number one player in the SME market in Asia-Pacific by 2005, the Indian subsidiary has launched a two-pronged strategy in August: one, the rollout of mySAP All-in-One, a prepackaged, industry-specific enterprise application (mySAP business suite) version for SME customers and the introduction of a channel partner programme.

The All-in-One package promises almost 40 percent reduction in implementation time and 30 percent reduction in cost. The package provides customers with one-stop solutions for all their needs, from hardware, software, implementation and support plus industry specific solutions. These solutions are offered for 23 industrial practices.

The company is also bettingbets on its newly launched network of empowered channel partners with local industry knowledge, who would jointly market, implement, and provide support to customers. Channel partners are different from value added resellers and implementation service providers in the sense that they can provide SAP licences, hardware and software and support services, unlike resellers, who can only sell licences, and implementation service providers, who have to confine themselves only to implementation.

Srinivasa Rao, industry head, Small and Medium Business, SAP India said that in a couple of weeks, SAP India will be announcing the names of the channel partners and the pricing for packages for each vertical segment SAP would be offering with them.

The company believes that the channel partnership programme, which was launched worldwide a year ago, will serve three purposes:

• Partners will bring in industry-specific knowledge to offer solutions
• They will strengthen implementation resources and,
• Help SAP build a community of partners.

There are around 500 partners globally.

SAP India, which has 59.6 percent marketshare (according to IDC) in India, registers around 20 percent of its revenues from the SME segment. "Over 50 percent of our new business enquiries come from SMEs, companies with a turnover of less than Rs 300 crore."

Rao said that SME needs are individually configured to micro-vertical standard solutions delivering value at an affordable price. "Today, an entire SAP solution including support services could be as low as Rs 25 lakh," he said, "This would allow scalability and flexibility to meet current and future challenges. mySAP All-in-One solutions come with built-in content, tools, and methodologies, bringing best practices to small and midsize companies, saving up to 40 percent in time and 30 percent of cost when compared to traditional implementations."

With the introduction of channel partners, the earlier concepts of implementation partners and value-added resellers are likely to be phased out gradually. Said Rao, "The channel partner strategy is backed by our existing partner who will move up the value curve by incorporating their domain expertise in conjuction with SAP’s industry best practices, incorporating new technologies, methodologies and tools, so that we can deliver value and affordability via one face/high touch partner model."

He said that SAP supplies software tools, documentation tools, and provides access to best practice repositories to customers. It has set up a business unit to ensure that partners are properly evaluated and trained in all aspects. The company has launched a channel partner portal that gives access to the kind of building blocks partners make across the globe. These blocks can be used by others for their customers.

Globally, SAP’s revenue from the SME segment is in single digits. However, sensing the future growth potential, SAP has appointed one executive board member exclusively for SME business. The global target is to increase SME revenues to 20 percent of total software licence revenues.