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Spotlight
SAP’s micro-vertical SMB strategy
Having captured significant share in the Indian enterprise
application software market, SAP India sees SMBs, BFSI and the services sector
giving impetus to its growth, says Abhinav Singh.
SAP India has come a long way in the Indian Enterprise Application
Software (EAS) market since it began operations in the country over a decade
ago. Today it boasts of around 730 customers including large organisations such
as HCL Technologies, Oil and Natural Gas Commission (ONGC), Infosys Technologies,
Mahindra and Mahindra, New Delhi Power and Videocon. It also has mid-sized organisations
such as MTR Foods, Dabur and Dishnet Wireless on its clients’ roster. With
around 200 people in its field team undertaking sales and marketing initiatives,
the company is planning to rope in more customers in the coming year. Last year,
SAP India added 120 new customers of which 45 were from large business and 75
from the SMB (small and medium business) space.
Vertical-specific solutions
SAP caters to most verticals as it offers a range of 30 vertical-specific
solutions in India. Says Nagaraj Bhargava, Director, Marketing and Alliances
& Sales Operations, SAP India, “We have around 30 vertical-specific
solutions for the Indian market. The EAS requirements of power companies, pharmaceuticals
and insurance companies will never be the same. That is why our industry-specific
solutions have helped our organisation penetrate deep into the Indian market.”
SAP India understands that every organisation has unique needs and it hopes
to cater to them through vertical-specific EAS. Elaborates Bhargava, “Vertical-specific
EAS has helped in major wins such as Tata Finance, which is using our asset
management solution, and Tata Teleservices, which is using our telecom-specific
solution. Similarly, General Insurance Corporation (GIC) is using our re-insurance
solution.”
| SAP Labs India |
| SAP Labs India is SAP’s largest
development facility outside Germany. The lab in Bangalore has come a long
way since it was set up in 1998. Currently it has around 2,000 people, but
plans to adds another three hundred by end-2005 and further increase the
headcount to 4,000 by 2006. SAP Labs India contributes to all areas of SAP’s
product value chain—research & innovation, product development,
production, global support and service, and customer solutions and operations.
SAP has invested about 20 million euros to build phases I and II of this
lab. SAP plans to invest an additional 30 million euros in the lab to expand
its infrastructure. Says Martin Prinz, Joint Managing Director, SAP Labs
India, “The team at our labs here is the largest development team outside
Germany, and has contributed significantly to the localisation of the Human
Capital Management module which is part of the mySAP product. It also has
the complete ownership for delivering localised solutions in English-speaking
countries. The team here has been instrumental in carrying out localisation
of the payroll and financial module for the Indian market too.”
SAP Labs India is contributing
heavily to solutions for the manufacturing vertical. The lab holds significant
ownership of the Apparel and Footwear Solution (AFS), and also the solutions
targeted at the oil and gas sector. The lab carries out over 33 percent
of the total CRM development of SAP worldwide, which includes contribution
to SAP’s CRM solution mySAP CRM 5.0. Around 25 percent of the total
ERP development work is carried out at the labs. SAP Labs India is also
working on emerging solutions such as xApps, Mobile Business Solutions
and Mendocino. The lab contributes to the Mobile Application Platform
which goes into the SAP NetWeaver platform. In the coming days, SAP Labs
India has plans to organise SAP TechEd from October 5 to 7, 2005 (in Bangalore)
which will have representatives from SAP (including its board members)
partners and customers. The Indian subsidiary expects that there would
be 2,500 participants for the event. Prinz says, “The aim of SAP
TechEd will be to educate users and people about the new technologies
that SAP has been working on. It will be an interactive event and will
attempt to give a hands-on experience of our technologies to participants.”
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BFSI and the services business
SAP is expecting BFSI and services to give a major impetus to its growth in
India in 2005. In the BFSI vertical it has customers such as GIC, Indian Bank
and NABARD, and in the services market it has Wipro, Infosys, Satyam and MindTree
Consulting. Besides BFSI, the company has closed deals with the government in
the defence and e-governance sectors. SAP has invested money for localising
its products as per local tax requirements such as making its products compatible
with value added tax. This has helped potential customers gain the confidence
to go ahead with the implementation of SAP products in India.
SAP India is also banking on a combination of the best practices
that it bundles along with its products. Having worked with different verticals,
SAP is now in a position to understand the requirements and quality initiatives
specific to different industries, and it has been successful in capturing the
best practices related to a particular industry in its products.
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With the introduction of NetWeaver, companies
can build their own
applications on top of the platform as per their requirements
Nagaraj Bhargava
Director
Marketing and Alliances & Sales
Operations
SAP India
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The major concerns for SMBs going in for an EAS are
cost and reduction in
implementation time as they want to realise
benefits quickly
Srinivas Rao A
Director
Sales, SMB
SAP India
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Full throttle with SMBs
SAP India aims to go all out with its initiative of targeting SMBs. It has around
350 SMB customers, and has been carrying out its SMB initiative for more than
six years. Of the total revenue generated by SAP in India, SMBs contributed
around 25 percent. Going forward, the company’s strategy will be to bring
micro-
verticalised solutions (SAP Business One) for SMB customers.
Explains Srinivas Rao A, Director, Sales, SMB, SAP India, “Major concerns
for SMBs going in for an EAS are cost and reduction in implementation time as
they want to realise benefits quickly. Since many Indian SMBs are linked to
the global supply chain, they want to take advantage of international best practices
being offered as part of the solution at a cost-effective price. This is where
SAP Business One fits in.” SAP Business One will be available in the next
two to three months at less than Rs 10 lakh and will be targeted at business
units with revenues of less than Rs 25 crore.
SAP India launched mySAP All-in-One in mid-2003, and since then it has signed
125 customers for this product. This year alone it bagged 45 new customers for
the same, and hopes to close the year with a total of 100 customer wins. Rao
details, “With the help of our partners we have been able to deliver this
solution to our customers in a period of just eight weeks unlike the four to
five months time- frame which was required for rolling out a regular ERP solution.
The product is pre-configured to meet the specific needs of SMBs, and this has
speeded up the implementation process. The shorter implementation time has also
led to a reduction in cost of implementation.”
Still a long way to go
SAP India is looking to further enhance its marketshare in India. However, the
mindset of many customers who do not feel that they should go in for a packaged
solution persists. Comments Bhargava, “With the introduction of the NetWeaver
enterprise platform, companies can build their own applications on top of the
platform as per their requirements.” A focus on popularising its products,
especially the NetWeaver platform, through workshops, roadshows and events,
will be a priority for the company.
abhinav@expresscomputeronline.com
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