Out of the Ivory Tower

Not long ago solution providers couldn’t knock on the doors of small and
medium enterprises and ask ‘can we do something for you in the enterprise
resource planning space? Packages were costly and no one believed it could ever
be implemented for anyone other than big corporates operating from multiple
locations, having diverse functions within the organization. ERP is no longer
something reserved for the corporate maharajas, it has gone even beyond the
small and medium enterprises to the grass roots. Campuses, universities, hotels,
hospitals, textile showrooms, and departmental stores are some of the new
clients who now seek ERP solutions.

Softex,
a Technopark firm, has already done an ERP project in textile automation for a
large textile showroom–Parthas–in Thiruvananthapuram. "It efficiently
and seamlessly integrates the information about various operational areas of the
show room like Purchase, Sales, Payment, Accounts, Payroll etc," according
to RP Lalaji, chairman of the Softex Group. Softex has plans to customize the
package for large departmental stores and retail outlets. Unlike many other ERP
Packages, currently available in the market, textile automation does not need
any manual intervention for updating the data of various functional areas,
Lalaji claimed.

IVL India based in Technopark, a major ERP solutions provider for large
corporate houses in the country, has already chalked out a plan to tap the SME
segment. "We are targeting companies with less than Rs 50 crore turnover–this
includes bread manufacturing units, Dewaswom Boards, co-operative banks etc to
name a few in Kerala," Sunil Gupta, MD of IVL said. What has turned
advantageous for solutions provider is that SAP and Oracle have come out with
versions that are tailor made for the SME segment. SAP has launched BusinessOne,
an ERP package for small and medium businesses (SMBs) in the US and Europe and
would soon be targeting India.

Why has the SME segment become so attractive for ERP solutions? One reason
could be that the market for the large corporate segment consisting of those
with a turnover of Rs 200 crore and above has become saturated, according to
Gupta.

The second reason is that the larger market is now in the untapped segment,
which can now benefit with the availability of newer versions of SAP and Oracle.
"The smaller versions of SAP come bundled with core functional requirements
for ERP that can be customized according to a client’s requirement," he
added.

What would be the budget of a SME for ERP implementation? "It can range
from a couple of lakhs to one crore, while a large corporate might spent upwards
from Rs 4 crore to Rs 10 crore for ERP," says Gupta. Although, the SME
market is large and spread out it could also be very price sensitive, something
which solution providers would have to keep in mind which means booking profits
may not be that easy.

Dimensions, another Technopark firm, has already deployed Campus ERP
solutions in 15 colleges and has another 10 in the pipeline. But the company
feels that it has to have at least 100 Campus ERP installations if it has to
start making profits from this segment. It has also secured ERP projects in
small hotels and hospitals including INS Sanjeevani, Kochi and INS Chilka at
Orissa, both coming under the defense department. ERP business in the SME
segment is an evolving one and newer niche segments are waiting to be tapped by
even smaller solution providers.

R SREEKUMAR

CNS