Financial Daily from THE HINDU group of publications
Monday, Sep 06, 2004
Enterprise Resource Planning
Mid-sized ERP vendors slug it out in SMB market
Mumbai , Sept. 5
IT is a slugfest in the Indian ERP (enterprise resource planning) market as mid-sized vendors gain traction in their bid to capture a share of the small and medium businesses (SMB) segment thus far dominated by global vendor, SAP.
While competitive price points and reduced ROIs dictate the choice for consumers, vendors have adopted a micro-vertical focus to gain market share.
With the enterprise Tier I market saturated in India, for ERP vendors the SMB segment offers good prospects given that there are over six lakh small and mid-sized firms (Rs 50-200 crore) which plan to implement a ERP system, said Mr Kanthi Mathinathan, Enterprise Solutions Group, ICICI Infotech.
Orion Advantage, the micro-vertical ERP on offer from ICICI Infotech, targets the pharma, FMCG and auto ancillary industries.
While ERP products were process-driven earlier, they are now industry-specific with auto ancillaries, chemicals, jewellery, sugar, plastics, garments, pharmaceuticals, food and beverages being the target verticals for all vendors.
The package and implementation costs hover in the Rs 8-10 lakh range for a 10-15 user base, with implementation time cut down from the earlier 10 months to two months.
According to Mr Srinivas Rao, Sales Director, Small and Midsize Business, SAP India, over the last one year over 60 SMB customers have deployed ERP systems.
Of this, SAP bagged 35 customers, with the rest being cornered by vendors such as Navision, Godrej Infotech, Ramco Systems and ICICI Infotech.
While SAP clearly has a early bird advantage, other players are moving in with specialised solutions for the small and medium-sized segment that do not require a SAP-specialised engineer.
"For a SMB having a ERP budget of Rs 8-10 lakh, it does not make sense to hire a SAP administrator at Rs 15,000 to Rs 25,000, which is why SMBs will prefer to implement an ERP product that is easy to manage," Mr Mathinathan said.
Mr Pradeep Kapoor, CEO, Godrej Infotech, said: "The computing resources required will be much less compared to what would be required for other ERPs (SAP in this case)."
Incidentally, Godrej Infotech bagged its first auto ancillary client in Pune for eNcompass-Auto, its ERP product.
Going ahead the success rate of a vendor in the ERP marketplace will depend on the customer referral sites they will be able to provide, said Mr Mathinathan.
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