Hype, hiccups and hope have been three prominent points on the growth curve of Ramco Systems till now. However, it will not be long before the company reaches new "Heights," echo its 800 employees. Chennai-based Ramco Systems enjoys the credit of making the country proud with its global product-Ramco Marshal. Ever since its inception, there have been great expectations from this company which has been struggling hard to stand on its feet.
The learning curve
After six years of struggle and learning, Ramco systems is now entering the transition period-from product development to business. Inspite of the challenges ahead, the company is optimistic about its growth and is convinced that it is going on the right track. Moreover, the company has also drawn up a gameplan for its future directions.
"If you ask me how we have fared during the last six years, my honest answer will be that we have seen a commendable progress," says S Ramachandran, CEO, Ramco Systems. "Our objective was to create a high-end ERP global product and we have done it in a relatively short period of time. Which other vendors have come out with four versions of an ERP product within six years?," he questions. Not only this the company is currently working on the next technology architecture for its version 4.0.
The organizational asset
Another objective that the company set for itself was building a different kind of organization, one with global standards.’ "We did not have a role model to follow. We had to settle down as an organization with our own thinking. Today, we have evolved and created the assets of our organization," explains Ramachandran. "We have been able to think, conceive, design, test and release a high-end product like Marshal, which is our strength."
Having achieved the primary goals, now is the time for the company to get to the third dimension, namely, business. As things stand, the company is already faced with the criticism of not being ‘aggressive.’ "We have been aggressive all along. Maybe the internal aggressiveness has not manifested itself all the time," retorts Ramachandran. Take Marshal, for instance, where "we have been extremely aggressive in developmental schedules." The release of version 3.1 is slated for February 1999, while version 3.2 is to be launched by end 1999 and that of version 4.0 by first quarter of the year 2000.
New technology architecture
More important is the company’s thrust in the version 4.0 which is being developed currently by a 60-member core team. The new version 4.0 is planned on a multi-layer architecture based on emerging technologies from Microsoft (COM, MTS, MSMQ). The architecture is conceived on standard functional components of a business system and is being repositioned for a wider spectrum of the market at the dawn of the millennium. (SEE BOX)
Explaining the salient features of version 4.0, S Parthasarathy, Head, Technology, says, "This is a distributed computing framework, designed on a three-tier architecture with five layers, namely, presentation, transport, transaction services, business rules and data." By virtue of this, the next version will be natively compliant and a non-proprietary software.
But then, why launch two more versions in the market, while taking the product to a still higher version of 4.0? "We have a two-way strategy for technology. One is product continuity and the other, moving to the next technology architecture," explains Satish Gore, VP (Development). According to him, while version 3.1 and 3.2 will complete the product continuity circle; version 4.0 will give the company the `technology-readiness’ and `time-to-market’.
The company’s dual strategy is to cater to two types of customers: cautious type, who would continue with the present technology, and those who are willing to take risk and get into the next technology rung. "Even with Microsoft, people wait for a new technology to reach its maturity and then go in for it. We are following the same example-to keep adding on the present version, while at the same time looking at the future," adds Gore. Ramco is also ensuring product continuity through its Gateway series of products that will go in as add-on products to the present versions of Marshal and enrich it with enterprise features.
New business avenues
"In fact, the new version is being looked at as an avenue for new businesses. We will be licensing this architecture framework to other consultants or software vendors who can build up their solutions on it," says Ramachandran. In what is being called as the Enterprise Professional Services, Ramco’s protected source code framework of version 4.0 will be offered to other software companies to develop turnkey solutions, according to Parthasarathy. It is also understood that as a long-time strategy, the company will look at porting the same framework to other technologies other than Microsoft. But it will take reasonable time, support and resources before the company goes into this phase, not to mention the high investments required in the effort.
On the business front, a look at the half-yearly performance of the company for the fiscal 1998-99 shows the aggressiveness of Ramco in each of the markets it operates from, including India-its testing ground. Starting from April this year, the company bagged nearly 25 orders from across the globe of which nine came from India. The company is also looking at adding another 10 clients to its list from India by the end of this fiscal. Some of its prestigious global accounts include Intel in Malaysia and the Singapore Sports Council. In revenue terms, Ramco’s global performance for the first two quarters this year has been Rs37.09 crore, a growth of 65% over the corresponding period last year.
"Each market is unique and important to us. And we have a different strategy for each of them," explains JP Sivakumara Swamy, Manager, Strategic Planning. Accordingly, the US is a `high-price-more-noise’ market while the UK and Europe is a `product improvement’ market for the company. "India, although by size is a miniscule of the global ERP market, signifies strength of the organization, the pride and satisfaction of the company," says Ramachandran. The Asian market, including Malaysia and Singapore, acts as a synergy to the Indian market.
Three-pronged marketing strategy
As for Ramco Marshal, the company has identified a three-pronged marketing strategy. The first and most important conscious step is the Global Partner Program. Ramco has already tested this concept in Switzerland, the US and some countries of Asia. While direct sales and implementation will continue for large corporate accounts, the partnership program is being targeted for quicker and more installations in the respective areas. "The idea is to tap local resources who are familiar with the territory, the language and the market there," states Ramachandran. In the long term, Ramco hopes to do more business through partners than direct sales.
The Marshal Technology
The current version of the product, shipping since August ’97 and the next version planned for the first quarter of 1999 are based on the client server architecture. The presentation layer (user interface) employs rich set of Windows-based Graphical User Interface (GUI) features. The product is built on standard Microsoft supported middleware (ODBC, DB library and DTC) to connect to the database server. SQL server (6.5) is the DBMS supported in the current version. SQL Server (7.0) support is scheduled for the next version. Scalability in these versions is provided by the product’s ability to support distributed databases for different applications in the suite with multi-location capability. Information integration is achieved with the use of two-phase commit supported in SQL server.
With the arrival of internet and global access support, computing technologies are moving towards supporting distributed computing frameworks. It has become imperative to architect systems to execute business logic on a separate tier and to support global access requirements.
Transaction gateway series of products planned for release during the early half of 1999 will support extending the current product line to provide for wide area requirements. This product will be an add-on product for the current versions to support customer specific internet, WAN, EDI and ecommerce requirements. This series of products is based on technologies planned for the future version.
The partner is expected to be a $10 million to $30 million company with ERP implementation experience, ready to give a commitment of $2 million to $3 million business in the first six months of having signed up the partnership agreement. The revenue sharing pattern is anywhere between 30% and 50% depending on the business generated. The partnership program will be extended to implementation too with Ramco looking out for partnerships with second-tier nimble-footed organizations. Ramco will invest upto 10% of revenues in training and establishing these programs.
Ramco’s conscious promoting of this concept will be seen in the series of Global Partner conferences, Global User conferences in different countries during the next year. This also forms the company’s conscious efforts to create visibility in the various regions. Ramco will also have joint advertising campaigns with hardware and software vendors such as Microsoft, Intel, Compaq and IBM.
An offshoot of the global partner program is the Satellite Organization Concept wherein the company plans to partner with small organizations and outsource developmental work on various components and testing. "This is a way to keep the overheads low and to create industry-specific component development," says Ramachandran. Eventually these components will be added on to the base-line Ramco product as plug-n-play solutions. "To start with, most of these would be Manufacturing Enabling Solutions (MES)," he adds.
Industry and market segmentation
The second major initiative undertaken by the company is segmentation. Ramco has identified industry segments and geographical segments to re-focus. These include industry segments such as defence, petroleum, banking and finance, power and government. And to this extent the company is romping up its workforce with people from these industry segments. It is estimated that the company will grow by another 500 employees by this fiscal end.
A third strategy is to extend the vertical solutions. The company, which added two vertical solutions on Enterprise Asset Management and Enterprise HR recently, is working toward adding three more vertical solutions on process, discrete, packaged internet and EWAN enabling solutions. A structured training program on the software package is also on the anvil. The company, has launched the Ramco Process Architect, an implementation methodology of Marshal, jointly with IIM Bangalore.
On the other hand Ramco Systems, is contemplating a spin-off from its Rs750 crore Ramco Group to float a separate company. "It is not a business compulsion at the moment anyway," says Ramachandran. It is also learnt that the company is contemplating an aggressive pricing strategy for the global market, though the company officials are noncommittal about it.
Whatever the future, Ramco is now talked about at par with international giants like SAP, Baan, PeopleSoft and QAD. A relatively late entrant in the global ERP market, the company has drawn the attention of the world with its ‘Made In India’ label and endorsement by none other than Bill Gates. With more efforts on visibility, client references, product innovation, and price-performance benefits, Ramco Systems is likely to reach newer heights. Not just on the X-Y axis, but on the world map.
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