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  • 1. PLUS Dell Laser Printers to Manage Business Costs of SMBs /18 india’s first IT magazine for sme business VOLUME 02 | ISSUE 11 | JANUARY 2012 | RS. 20/- SME TREND  /38 SME BIZ  /44 TREND SETTER  /36 IBM: Giving Power Edge Axis: Video Surveillance VIA Gung Ho on Indian to SMEs Enhances Business Tablet Market Growthr Efficiency POISED FOR ERP TAKE OFF ERP adoption among the SME segment has picked up momentum with increased awareness and availability of appropriate solutions. /26 01cover.indd 1 18/01/12 11:54 PM
  • 2. COVER STORY ERPERP POISED FORTAKE OFFERP adoption among the SME segment has picked up momentum with increased awareness and availability of appropriate solutions. BY SANJAY MOHAPATRA sanjay@smechannels.com T he ERP market in India is fairly among the SME sector in India,” says Sukumar R, mature, comprising approximately Vice President, Ramco OnDemand ERP. 35% of the enterprise application The SME segment has come to the forefront in revenue. Although other enter- the last few years in India due to several reasons: prise applications have started government’s thrust to the segment, increasing becoming popular in India, ERP continues to business opportunities in a robust economy, comprise a third of the enterprise applications domestic demand, opportunities through glo- market. This growth, in large part, is being sus- balization, rise of tier-two and –three towns and tained and abated by the increasing adoption of cities, and the momentum evident in entrepre- ERP amongst the small and medium segment. neurial ventures. The micro, small and medium segment in According to Associated Chambers of Com- India plays a crucial role in the Indian economy. merce and Industry of India (ASSOCHAM), According to the Economic Survey of India 2009- the SME sector is growing at a rate of 35% per 10, the segment contributes to about 8% of India’s annum, and 60% of SMBs are moving towards a GDP, 45% to India’s manufacturing output and technology-based infrastructure to increase their about 40% of India’s exports. In terms of employ- productivity and reduce input cost. Yet accessing ment generation also, this segment accounts for technology and maintaining competitiveness nearly 50-60% in all developing and emerging continues to be a challenge among SMEs. nations, according to the United Nations Indus- Technology spend in this segment has largely trial Development Organization. been restricted to investments in hardware with “India has the second largest number of SMEs little or nominal investment in software. Applica- in the world, but the segment spends only 30% tion adoption has been restricted to accounting of the total IT spending. Global competition is software and payroll with hardly any demand driving increased IT adoption by SMEs, and this for human resources management. Moreover provides a huge potential for increase in IT spend these applications are mostly point solutions or 26 SME CHANNELS JANUARY 2012Cover_Story.indd 26 18/01/12 11:58 PM
  • 3. ERP COVER STORY “ACCORDING TO RESEARCH FIRM IDC, SAP HOLDS 27% MARKET SHARE IN THE SME SEGMENT.” SME CHANNELS 27 JANUARY 2012Cover_Story.indd 27 18/01/12 11:58 PM
  • 4. COVER STORY ERP to facilitate rapid expansion, agility and scalability. “WE WILL ALSO ADD MORE Also businesses have become seamless with the PARTNERS IN THE FUTURE rapid maturing of Internet-based technologies, enabling start-ups and small businesses to run TO INCREASE OUR REACH viable businesses, even from remote locations. AND CATER TO THE GROW- Asheesh Pandia, Brand Management and ING DEMAND SPECIFICALLY Corproate Communications Consultant, says, “Lots of small medium companies are either con- IN SME SEGMENT.” sidering or already implementing ERP and that SUKUMAR R, VICE PRESIDENT, RAMCO has opened up great new dimensions and phe- ONDEMAND ERP nomenal opportunities for consulting companies as well to reach out for SMEs and provide their solutions.” stand alone applications, making it difficult for was considered an expensive proposition. But comprehensive automation of enterprise systems. increasingly companies are adopting full fledged The Market Application penetration has been minimal for a ERP solutions. Roca India, the sanitary ware and The ERP market has traditionally been dominated variety of reasons such as lack of awareness and tiles manufacturer, deployed SAP’s ERP ECC by SAP, Oracle and Microsoft. However, there are understanding about the benefits of deployment, 6.0.enhancing internal processes across plan- a number of other players in the market such as and also the fragmented nature of the segment. ning and demand management, sales manage- Ramco, Infosys, Sage, Tally, ESS and Busy as well SMEs are now using technology as a growth ment, finance management, procurement and as pure play cloud-based ERP service providers driver, allowing IT to focus on strategic growth of production management and plant maintenance such as Netsuite. All players have varying pen- their businesses. solutions. etration in the SME segment, with some vendors There is increasing awareness and understand- The rapidly changing external environment such as Microsoft and SAP chiselling their SME ing about technology adoption, and the benefits it with increased globalization, which provides forays with exclusive partnerships and marketing can bring to business operations. The increasing relatively more opportunities for growth, has programmes. These activities have helped build competitiveness in the external business envi- contributed hugely to market momentum. This market awareness and understanding about tech- ronment, as well as enhanced vendor activities requires robust technology systems and processes nology in general and ERP in particular. related to market building has contributed to the Microsoft Dynamics has various offerings momentum in the market. that are specially designed for the SME segment. In the recent past, SMEs have realized that Microsoft Dynamics NAV is an integrated busi- comprehensive technology adoption is important ness management solution designed for tech for their businesses. For example, Nagpur-based savvy SMEs. The solutions are uniquely designed Facor Steels is a carbon, alloy, stainless, and spe- to be flexible with vertical functionalities, specifi- cialist steel manufacturer. To meet the challenges cally for the small- and mid-market companies. of an expanding production plant and product Microsoft has been working closely with solu- range, the company needed an integrated ERP tion partners, targeting specific verticals and geo system. In April 2009, the company engaged clusters. The aim is to ensure that the solutions Oracle Partner Sonata Software Technology to help SMEs become self-reliant in managing and implement Oracle E-Business Suite Release 12 maintaining ERP deployments through simple Oracle Financials, Oracle Process Manufacturing, and easy tools. Oracle Order Management, and Oracle Purchas- SAP has two sets of offerings specifically ing. It helped the company to track inventory designed for the SME segment: SAP Business One and reduced the time taken to record and inte- and Business ByDesign, an on-demand offering. grate information from weeks to just seven days, “THROUGH OUR While the former solution has been around for increasing staff productivity and efficiency. a while, Business ByDesign has been a relatively As the business and industry has steadily SOLUTION WE HAVE recent addition. SAP Business One is offered as grown, so has competitiveness, which has BROUGHT A TAILORED an on-premise or hosted business management necessitated increasing use of information tech- EXPERIENCE TO SMES, solution that is easy-to-use, flexible and afford- nologies to drive a business, manage and operate able for SME subsidiaries. SAP has tied up with operations, enhance competitiveness and achieve WHICH HELP ORGANI- key solution partners such as Wipro, TCS, ITC higher efficiency. Therefore, SMEs have started ZATIONS TO INITIATE Infotech to take both these offerings to the SME implementing integrated business management EFFECTIVE CHANGE market in India. solutions to make their organizations dynamic SAP has more than 3,500 SME customers, and responsive to the ever changing business and MANAGEMENT.” which account for over 77 % of the total customer economic environment. SUBHOMOY SENGUPTA, GROUP base in India. Globally, more than 75% of SAP’s Today’s small businesses are increasingly using DIRECTOR OF MICROSOFT DYNAMICS total customer base is SME companies. Accord- technology for business advantage and competi- INDIA. ing to research firm IDC, SAP holds 27% market tiveness. It was not so in the distant past that ERP share in the SME segment. 28 SME CHANNELS JANUARY 2012Cover_Story.indd 28 18/01/12 11:58 PM
  • 5. ERP COVER STORY about the ripe time and migration rate. Newer “CREATION OF A TALENTED mid-market entrants are embracing cloud com- POOL OF CONSUL TANTS puting but cloud still seems a little challenging and immature for the SMEs. Connectivity in WHO CAN DO SUCCESSFUL remote locations is still not enterprise grade, and IMPLEMENTATION IS ONE OF hence, still a huge roadblock. For SMEs battling THE KEY CHALLENGES.” connectivity issues, it may be a good idea to wait until that gets resolved first. In the process, these ASHEESH PANDIA, BRAND MANAGE- companies are likely to benefit from more robust MENT AND CORPROATE COMMUNICATIONS and mature adoption practices. CONSULTANT The finding is as Asheesh Pandia, Brand Man- agement and Corproate Communications Con- sultant, says, “Opportunities are great for those the software but pay for it as a service, our model improving at a phenomenal rate. “Our product who can provide expertise in ERP implementa- of SaaS covers it; we provide him Tally on rental is offered on premise and on cloud. Therefore tion especially if they are competent enough to as well as on premise,” says Tally’s Shoaib of Tally. companies located in low connectivity areas can do quick deployment and keep the total cost of Microsoft believes that the scope for cloud adopt the on-premise version. Given the phe- ownership very low. Creation of a talented pool of based ERP solutions is large. From an economic nomenal growth in connectivity, they can also consultants who can do successful implementa- point of view, small and mid-sized companies gradually shift to a mix of on-premise and cloud tion is one of the key challenges that the industry benefit from cloud based services as they do not or even shift entirely as and when the connectiv- needs to address at the moment. Implementation have to invest heavily in IT infrastructure. Cloud- ity improves in their location,” says Subhomoy as well as operational efficiency is where the focus based service ensures that the company uses its Sengupta. should be currently.” resources more towards core activities and the ERP in SMEs is here to stay, in all forms. There provider focuses on centralized services reduc- is an increasing trend among SMEs to move Finally… ing operating costs and providing competitive towards cloud-based ERP as it addresses the There is a huge scope in the SME for the ERP advantage. infrastructure issue. implementation as they are the major drivers of Viability depends on individual requirements The future is definitely cloud for most enter- economy in India and they have to be very busi- and deployment scenarios. Connectivity is prise applications, including ERP. Only it is more ness competitive to sustain their growth. SME CHANNELS 33 JANUARY 2012Cover_Story.indd 33 18/01/12 11:58 PM