"SaaS enabled A1S ERP to be launched by mid 2008"
There seems to be no uniformity in defining SMB in India by various IT vendors. Some define it based on the number of employees a company has, some define it based on the revenue. What is SAP’s definition of SMB in India?
We take the revenue route to define SMB in India, although in other markets we do not follow the same. Companies with a turnover of Rs.100 crore or less are considered small, while those with a turnover between Rs.100 crore to Rs.1500 crore are categorized as medium enterprises.
Having said that, I must say that the SMB market growth for SAP in India has been phenomenal. Already 35% of our revenue comes from SMB, and we plan to increase this to 50% by 2010.
A long time complaint on SAP’s core application offering, both for SMB as well as bigger enterprises, has been that the application seems to provide little room for customization. Since SMB is known to look for applications that provide ample scope for customization, how do you cater to this need?
That perception might not be true. The core application that SAP provides assumes and expects that enterprises follow certain best practices in the various business processes they follow, to run their respective businesses. In fact, we keep incorporating and enriching the best practices in our core offering. Also, SAP is known for this fact as well. As we see huge demand from the SMB segment, we have also recognized their need for flexibility to design and develop their own stuff. To do this, we are empowering our partners to deliver this capability as they deploy the core application in companies.
How have you organized your resellers and distributors in this regard?
To cater to the needs of the SMB market, we have appointed a group of around 20 focussed partners such as Carritor, Wipro, Akrut, IBM, etc. that can handle specific need of customization.
It is generally considered that Software-as-a-Service (SaaS) mode of application usage will take off fast in the SMB segment as it takes away the worry of maintenance and upgrades of the software, as well as necessary hardware. Are you rolling out any SMB specific application on the SaaS model?
It is true that SaaS model is catching up fast. But, organizations still wish to have a system managed on premise. This is true for organizations that possess complex business processes. In fact, for SAP such organizations hold greater priority. We study an organizations needs more thoroughly than anyone else. Our observation has been that organizations wish to own certain critical business processes in house and outsource the rest. For instance, in India you would get to see organizations like Cadilla Healthcare using our CRM engine on SaaS model, but use the ERP managed inside.
However, since there is a trend towards SaaS adoption, we are planning to make another SMB offering - SAP A1S on SaaS model by mid 2008.
This will be an offering that will bridge the gap that exists between SAP All-in-One (A1) and SAP BusinessOne (B1) offerings. But, the most important aspect of A1S will be that it will have the entire stack of ERP, CRM, SCM, and BI in one suite and made available on the SaaS model. Organizations will also have the freedom to pick and choose any of the functionalities, and run the same over their existing core application platform. This would be targeted at enterprises having employee strength of 100 to 400.
Organizations are reeling under attrition in the IT department as they lose their trained IT personnel to established IT vendor organisations who have all made their presence in India. What are your efforts at community building in the country?
Community building has become very significant for us. We have recently launched 35 new e-learning centres across the country. This year we shall be training 500 consultants on B1 alone.
Which business verticals comprise of SMB in India for SAP? How have you grown in this segment in the country?
We have categorized the SMB in India into four broad divisions namely, discrete manufacturing, process manufacturing, consumer retail, and utilities. While discrete manufacturing would include engineering and auto manufacturing ancillaries, process manufacturing includes businesses such as dairy, food & beverages, gems and jewellery, etc.
Since small businesses prefer to carry their work processes in their regional or local languages, can such a company expect its SAP B1 application to allow local language interaction with the application?
We have realized this need of small businesses since a long time in India. Technologically this is possible as our applications are Unicode compliant. So, all that needs to be done during deployment of the application is explain the business perspectives and processes to one of our business partners who would then customize and incorporate this facility in the application.
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