Wooing the SME

Small- and mid-sized businesses are becoming hotter by the day and IT vendors are making a beeline to capitalize on the potential. One vendor who has made rapid strides is enterprise solutions major SAP. The company intends to become a number one player in the SME space in India by 2005. Interestingly, of the company’s total 6,681 clients in the Asia Pacific region, small and medium businesses make up approximately 50% of the clientele.

In India alone SAP has got around 160 SME customers. Buoyed by the increasing adoption of IT by small and medium enterprises, SAP has recently launched a pre-packaged, vertical specific solution for the SMEs called mySAP All-in-One. 

The company claims that this solution can help small and medium enterprises achieve distinct competitive advantages. As the time taken for IT implementation is a major issue with the SMEs, SAP has tried to address the issue by creating a solution that can be implemented in a minimum timeframe of three months.

The launch of mySAP All-in-One assumes significance for SAP in India because it gives an early mover advantage to the company. However, things are not so hunky dory for SAP, as competition does exist in the form of players like Baan, which are aggressively targeting the SME segment. Nonetheless, SAP is confident of securing major orders from this segment.

What is required to address the communication needs of small businesses in India is a combination of solid technology, backed by the scalability and the ability to offer lower total cost of ownership. And SAP claims it scores on all counts. By launching a micro-vertical specific SME solution, the company reaffirms its commitment to the SME segment.

Advantage SME



Despite competing solutions, the SAP solution has the potential to impress small enterprises because it is 80% pre-configured and cuts down on the implementation time considerably. For instance, a discrete manufacturer of aerospace components can leverage the pre-built features in the solution like product development cycles. Similarly, an automotive component

manufacturer can use pre-defined processes like schedule order processes and other related functionalities of the solution. The multi-functionality of the solution makes it a powerful product to reckon with. The solution currently covers vertical areas like pharmaceuticals, chemical, automotive and consumer products, among others.

SAP’s solution could not have come at a better time because the majority of the SMEs are from the manufacturing space, which is a proactive segment for IT implementation. A recent Nasscom study states that while large manufacturing companies have taken the lead in implementing IT, it will be the SME companies in this sector that will fuel the next wave of growth. This is a clear pointer that drives home the potential of the manufacturing segment and scope for automation. Given that, many industry watchers believe that SAP would aggressively position mySAP All-in-One to the small and medium manufacturing companies.

With the launch of the solution, SAP’s one major focus in India is now the SMEs. But despite an impressive list of customers from this segment, it will not be a cake walk for SAP to convince the SME segment about the benefits of its solution, primarily because of basic SME fears about IT–implementation time and the costs involved. Therefore, the company is pitching the solution’s quick implementation time and the cost advantages as the solution’s key selling points. SAP is also increasing its strength of implementation partners and is backing it by aggressive marketing.

Shrikanth G in Chennai