Cloud based ERP is the way forward

Ramco Systems has come a long way since its inception in
1989. When in the late 80s the IT services boom had just begun.Ramco took a
route thats least taken. It chose to develop enterprise apps and came out with
its first full-fledged ERP in the early 90s called Marshal. Since then the
product has evolved into a platform and all products are now meshed into Virtual
Works. Ramco today is into a whole lot of enterprise apps cutting across ERP,
HRMS, business analytics, SaaS among others. In the last two decades Ramco has
stood firmly on its product initiatives and while it has struggled all the while
to make profits and has just posted two straight breakeven quarters in FY 10,
it has developed a world-class product. Tracing Ramcos journey so far, the
companys COO Kamesh K Ramamoorthy talks about the trails, tribulations, and
triumphs of the company in an interview with Dataquest. Excerpts

How difficult was it to evolve a product and
compete with global giants in the enterprise apps space?

When this company was started the key goal was to create a world-class
enterprise product and compete with the best in the world. We didnt want to
take the typical services approach, and strongly believed that a product centric
approach is the way forward. That was two decades ago. By 1993 we had built our
first ERP, Marshal, and we had pretty good success both within and outside
India. We did face challenges in the realm of deployment and it took a while to
understand the enterprise product dynamics as there was a need to compete with
global biggies and had to break a lot of perceptions. Initially, the product was
a single monolithic solution based on the client/server architecture. But with
time it has become web enabled and now evolved into Virtual Works with a suite
of diverse solutions for multiple verticals. We have so far invested about $75
mn, and I can say with great confidence that our solutions have gained global
acceptance and are one of the best in class in the enterprise space.

What about the top management attrition in early 2000?

Well, I would say that the top management attrition was indeed good as it
created an opportunity for us to infuse fresh talents and be able to bring in
expertise more tuned to the market dynamics.

With giants like SAP in the fray, how did you position
your ERP and drive home the value proposition?

As I said it was very difficult in the initial days. Convincing the IT
decision makers for a product that is home-grown and new was not an easy task.
The value proposition that has stood all these years is the products agility.
Our ERP is one that is suited for very complex processes. For instance, ITC
eChoupal had deployed our ERP and it is a classic case of our solutions
inherent strengths and we were able to address the unique requirements of that
model. Our solution supports eChoupals complex and innovative supply chain and
by any standards the operations are complicated and for the last few years
eChoupal is running its operations seamlessly using our ERP. So the message we
are driving home isERP is all about having control. Here is where we differ
from others, we provide absolute control and at the same time give a very
flexible and agile environment; so functionality is not compromised at all.

Is it any different from other ERPs as other vendors
also have such claims?

Well, if you look at the development phase of our ERP. First, its made in
India and we understand the country specific requirements better and from the
beginning we developed our solution as business components, hence you can say
that we are an early mover of SOA, when even the term didnt exist. As a whole
our enterprise solutions are being used by 2,00,000 users across the world and
many large enterprise deployments are supporting complex processes for years
without any problems. Our alliance with Boeing in the past for MRO solutions has
given us rich domain expertise and today Ramcos Aviation solution is one among
the top three and we have customers such as Indian Airlines as well as major
airlines in the US and Europe. The point I would like to stress upon is that our
domain understanding of key verticals has led to the creation of world-class
products.

Profitability has always been an issue all these years
with severe bottomline pressures. Your comments?

Yes, there has been a constant pressure on bottomlines, but the intrinsic
value we have created through our products is what makes us proud. I agree that
we need to turn around business from a profitability point of view. With a
highly mature multi-vertical product and platform we are heading for the next
phase of evolution.

What is happening on the cloud ERP front?

Its one of the strategic decisions we took a couple of years back and we
are the first company to provide a fully functional ERP in an on-demand model.
We have had around 150 customers in the last eighteen months and its a great
success with mid-sized enterprises. Its an extremely cost-effective solution
and this solution has empowered SMBs to adopt an enterprise class solution
without accruing IT assets on premise. Our in-house data center hosts all SaaS
customers. We have invested heavily in the data center with a highly scalable
model. We are putting in place sales and implementation partners for our
on-demand ERP. I think cloud based ERP is the way forward and it takes the
traditional pains of ERP.

What is the road ahead?

Our positioning at this point is value for money. We have a very powerful
ERP, but we are going into a lot of divergent areas as well. For example, take
the case of logistics where we have a complete suite of solutions. We are able
to deliver the power of ERP to such niche areas. This is the kind of product
breadth that none of our competitors have. What we have done in the last five
years is that from a single monolithic ERP, we have branched into multiple
things in a natural and an evolutionary way. We are aggressively focusing on
expanding our footprint from a sales perspective as well. The results are
already obvious; in the first two quarters of FY 10 we are able to break even
and we are heading towards growth.

Shrikanth G

shrikanthg@cybermedia.co.in