SAP India To Help Corporate India Take Digital Road For GST
With the upcoming GST (Goods & Services Tax) implementation expected by April 2017, SAP India announced that they will be turning ASPs (Applications Service Providers) for the same, aiding the expected 51 million SMEs to join the new regime. The announcement came at the flagship event ‘SAP GST India Forum 2016’, held in Delhi, attended by 1,500 business delegates.
This forum became an ideal platform for collaboration, exchanges of ideas, and discussions for enablement, impact as well as development of strategies regarding the successful roll-out of GST. Arun Subramanian, The Vice-President of Globalization Services, SAP Labs India spoke about the forum, saying “SAP has a well-defined technology road-map to simplify GST for businesses. This forum is created to ensure we equip them with knowledge to continue their operations in the GST regime.”
“We are in the final phase of making corporates GST ready”, said Neeraj Athalye, Head of SAP S/4HANA, SAP Indian Subcontinent. “Only best-in-class technology can ensure a smooth transition to GST, we are directing all our efforts towards ensuring that businesses are equipped for this turnaround.”
India’s Globalization efforts and GST
India has been putting in efforts to tap into the world market to developing it’s own, to stake a claim of being an economic superpower. With the new GST regime coming in place, Arun Subramanian provided his in-depth analysis as to how this will have a positive impact on the image of India, and businesses processes in the country in general.
He said, “Worldwide, we are moving towards what is called ‘the API World’. Communications will now be API driven. When communication goes the API way, it is the foundation for everything going digital. First level of digitization has happened with organizations adopting ERP over the last 25-30 years; tweaking processes and gaining efficiency. That was all transactional. Now we are moving to the next level, where we need to take business decisions based on data. Look at the case of GSTN for example.
GSTN is looking at 4 to 5 billion sales invoices each month, and let’s assume that invoice will have 4 or 5 line items or even 10 line items in each. This makes it 20 to 40 billion line items of supply data of 1 crore registered GST tax payers, which is going to sit on the system. It is going to sit on a monthly basis.”
He then went on to add, “Now, if you want to take informed decisions about the economy, or tweak the rates, you can link it to liquidity, in terms of the decision making process regarding dropping a few points or adding a few points to the lending rates. You could look at which industry is suffering, or doing well at what point of time. Look at the kind of economic study you can do. So, if you you put it in that manner, you will see the ability to take informed decision using the data being collected. That is something the government is aware of, and probably keen on doing. The Chief Economic Advisor, Arvind Subramaniam would definitely have set something like that as a criterion.”
Digital India is one of the flagship schemes of the government, and GST obviously will be one of the biggest practical use cases for the same, regarding which Arun Subramanian said, “ When you are going digital, you are saying 2 things; I am being efficient. I am being transparent. The minute you are saying my businesses are getting more efficient, and more transparent, globally it makes it easier for corporates and transnational organizations to say, ‘Here is a market that is transparent and vibrant, where we can also step in.’ It has also been the effort of the Prime Minister, where he has traveled and criss-crossed the globe, seeking investments, attracting global organizations to come to India and invest. But, he also has to show some steps as being a part of government of India. If things go off at this stage, things will dramatically change. ‘Make in India’ and all will fall in place, when infrastructure is in place.”
The SAP role
Now that SAP has taken on the mantle of an ASP in the country, which will facilitate the digital roll out and compliance for Indian companies, it becomes all the more important to get insights regarding the same. Neeraj Athalye, Head of SAP S/4HANA, SAP Indian Subcontinent, clarified SAP’s position on the development. He said, “ From the ‘ease of doing business’ point of view, the beauty of SAP is that no matter whichever giant or brand comes to India, chances of them being on SAP is high. Chances of them being able to adopt a SAP-driven compliance for the local government, is much easier. For them, adopting to anything local that is connected to SAP, is much easier. Point number two is the example of GST.
SAP has managed to roll out GST in 100 countries, and India will be out 101st. So, we know why there were riots in one country, or why things were smooth in another country, why it worked somewhere, and why it didn’t work elsewhere. This is the sort of experience we are able to bring to India. The third point is, for any global company to come and start doing business in India, we see because of GST, the role of a consolidator come into play.”
He added, “Take for example anyone who does B-2-B procurement; a manufacturer who buys helmets, safety goggles and glasses, drill bits and a whole bunch of things. He would need to deal with a completely unorganized segment. Now this is saying, ‘I will go to a consolidator, and he will deal with the complexity of the sector for me. So, this is the role of a consolidator, who deals with the unorganized sector and brings in a sense of aggregation in the process.
In America, companies have setup outlets on the outskirts of the city, which have a 100% guarantee of ‘12-hour delivery’. You place an order on anything, and you get a 12-hour delivery. Why is ti that an US company can do it in the US, but not an Indian company in India? The answer is this consolidation. There are so many disparate players, manufacturing, supplying and trading in small things, it is very difficult to get the economy of scale.So, these are the 3 main areas.”
To elaborate on the offerings from SAP, “ SAP solutions runs locally, and also runs globally. So, for a giant to come to India, and get adopted to local compliance. He may still have the servers in whichever part of the world, but the moment he switches for a country like India, he is complaint for that country. Secondly, for experience, we can come in SAP product, SAP services, as SAP support; all 3 lines which connect to the customer, we can come back with feedback as to what will work for them, and what will not work for them. Thirdly, we are also helping a lot of consolidators come into play. We are giving them solutions, our hybrid solutions are a great product for such consolidators. Our Ariba is a great sourcing hub for companies to go out there as a consolidator.”
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