‘Companies today, consider ERP solutions as a tool required for growth’
Many organizations can see up to 80-90 percent of their requirement already mapped in the system. MVR Kumar, VP, SealInfotech talks about the awareness at the customer end in terms of understanding such business solutions and its pros and cons
In the last few years, what changes has brought about a paradigm shift in the functioning of solutions industry?
Until three years back, on the business front, we were termed as system integrators, but now we function as a value added reseller, partnered with SAP. Talking about the software segment, earlier sales happened through SAP and we focused on offering implementation solutions. However, in last two years, SAP software license sale has begun through channel partners. So, we not only have the strength of implementing the product but even finding the right solution for the business. Since last two years, we have been the top five business partners for SAP in India and we are the gold partner for SAP India.
Even during the recent global downturn (2008-09), we witnessed a significant double-digit growth rate of about 42 percent in terms of both license sales and implementation solutions. As a channel partner now with the virtue of being into SAP service for more than 14 years, the other Java, .Net expertise is for providing add-on solutions where SAP is the base ERP package or even other areas of customer relationship management (CRM). So basically on business front, we have grown especially after becoming the gold partner.
Would you term developing and implementing customized and in-house solutions as growth drivers?
There are two major aspects, basically, our customized solutions are actually not customized, but are pre-configured and add-on solutions on SAP. We develop these applications as generic solutions and offer it to our customers. Secondly, another huge change is that from purely offering implementation services, for last two years, we now products also. Now when we talk about products then we are competing with other similar ERPs or business solutions that are being offered by competitors of SAP. Therefore, we have pre-configured SAP as a micro-vertical, one is industry solutions from SAP and in these industry solutions we have further developed micro verticals.
So what happens is… when we show our pre-configured readymade solution for a micro vertical, the customer feels that 90 to 92 percent of requirement is already pre-configured then the remainder 8-9 percent needs to be covered during implementation. The decision making for the organization which looks for a business solution or an ERP, the evaluation procedure becomes easier. We have developed tools and solutions helping evaluation of the right ERP products for the partners. The process of solution implementation has witnessed innovation. In last two years we have developed applications and templates that aide, facilitate and simplify the implementation process. We have developed innovative solutions like Enterprise Desktop notification, Google gadgets, etc. These solutions simplify the decision making process and for the application users – it simplifies the way of working. Also, we are planning many more application based on Google gadgets.
Has this development made it easier for you to pitch the solutions to customers?
As I told you the development of the solution and pre-configured template, decision making for the prospect has become much easier. In fact the organization, which is evaluates and implements a business solution can easily find out what is best for their business. Three to four years back, the question was whether to opt for it or not, it is helpful or not, will it be difficult or not, whether the organization will fit into this framework or not. These are no issues anymore. It is like somebody is implementing Microsoft application, he knows what he is getting out of it.
Today, many organizations can see up to 80-90 percent of their requirement already mapped in the system. There is definitely more awareness at the customer end in terms of understanding such business solutions and its pros and cons.
Lately, there have been many debates on on-premise against off-premise implementation?
Actually, as I see the cloud computing is really catching up, it is good concept and lot of interest is being generated around it in the market but mindset of users is still not ready for this type of technology. It still remains at the interest level. I think it would probably take a couple of more quarters to gain the required prominence. We are offering those solutions and informing our prospects about its value, but the conversion of interest into implementation may take another couple of quarters.
Still, is cloud the future technology or hybrid model is a better solution?
It would be a guarded statement from me that is ‘lets wait and watch’; because these solutions will generate interest, but whether the market is ready and it is getting into it or not is question. At a personal level, I will wait for another couple of quarters to see if it gets the required traction and interest from business perspective.
What are your observations on the SMB space and the mindset of the companies towards business solutions?
Considering the affordability, companies are now looking at benefit they derive, unlike the earlier days when they used to worry about the expenditure only. Now companies especially in the SMB segment have very ambitious growth plans. If I see a Rs. 50-60 crore company they have plans to grow to be a Rs. 150 crore and a Rs. 500 crore company as well. The mindset has changed where companies consider ERP solutions to be a tool required for growth, rather than expenditure.
Earlier it was just the manufacturing vertical, now seed industry is going for SAP, Sugar industry, garment manufacturers who deal with partners and farmers are looking at such solutions, service oriented industries, financial service providers and many more. The latest trend is government organizations, which are considering the implementation of ERP based solutions. The predominant shift is that, the solution which was seen only for commercial conventional manufacturing organization earlier, now has moved to government processes.
The aggressive SMB companies are even adopting solutions like business objects, supply chain related solutions, and analytics tools. The companies are not just looking at the ERP segment; the focus is towards enabling an end-to-end model.
The customer awareness has drastically improved. Now businesses look for processes and the required system for growth.
What are the pain points expressed by your customers when it comes to adoption of these technologies?
There is shift in the challenges we have observed; today it is not about just getting the internal processes automated. It is not just about an ERP and also it is not restricted to mere planning, it is much beyond all these activities. It has become the business driver now. Like for instance, if a company decides to diversify or shift its business then the question is whether the existing segment is dynamic and flexible enough to adapt to this change. Earlier the concerns were, what pains do I have and how will I overcome them. From there, the shift is that in future if this is what I want to do and whether my system is ready for it. So this indicates by default the basic issues are being addressed. People are looking beyond and it does not mean they are not interested in resolving their issues or pain points. The mindset is that, opting for ERP such issues are resolved, by default.
This change is primarily due to awareness. Earlier the pain points were the basis of evaluation and today it is all about future growth and the dependability and scalability of the system.