Small and Medium-sized Enterprise and SAP Contribution to Indian Market

Small and medium-sized enterprise (SMEs) has become the talk of town today. SMEs can be well defined as organizations with turnover that falls below some specific limits.

A lucid elucidation of the term SME would further manifest its close association with European commission (EU). The abbreviation, SME is generally used in the EU & many other international organizations including World Bank, the United States & the WTO. The term has also become quite familiar in many other countries.

Earlier, European commission had its own definition of what constitutes an SME; however, EU has now standardized the concept. The current definition of an SME goes like this companies with fewer than 50 employees are small & those with fewer than 250 are medium sized companies.

Association with SME may prove to be the source of ultimate and ever-increasing progress to many entrepreneurs. Clicking on the right technology is the key to success.

SMEs today must be totally prepared to accept considerable challenges and also be thoroughly equipped with all the necessary assets to deal with a client-base that is inquisitive, intelligent and well educated.

Today, SMEs have shifted their focus to information technology (IT) as the industry has realized that IT plays a prominent role in the current economic progress worldwide.

The majority of SME Business sectors now consider IT as their key to success & economic growth.

IT in conjunction with calculative business strategy is the magic potion for the growth of SME.

Most entrepreneurs across the globe have a notion that the ever-increasing competition may prove to be a big hurdle for SMEs. However, experts believe that implementation of correct technology that would offer a unified & updated view of operations is the key to enhanced business-process-efficiency.

Including IT in to a business unit may not be an easy task. Most businesses initiate with a simple system, one that works to maintain the basic business operations indicative of a start-up company.

What most businesses ignore is upgrading the technology. This culminates into inadequate collections of outmoded applications.

Another flipside of having an obsolete system is the information gap. Data Stored in multiple locations is often not connected resulting in business process breakdowns & loss in revenue.
Installing an upgraded system would offer great profits to an SME. The benefits also include instant optimization of business processes, reduction in operational costs & enhancement in customer acquisition & retention. An SME can efficiently cut down its total cost of ownership with the help of adopting newest IT technology.

What business solution should SMEs look for?

This may be the question that puzzles most entrepreneurs. The solutions are just few words away. Read the points given below to look out for adequate business solution.

a) Industry Specificity: Industry specificity offers best practices and domain knowledge of the vertical/sub vertical that the SME operates in.

b) Flexibility/Scalability: This is one of the most advantageous features that are really significant. An industry must be flexible enough to incorporate current systems with existing disparate or outmoded applications.

c) Operational transparency: The strict requirements of global accounting & corporate governance have pressurized businesses to possess greater transparency, time lines & accuracy in both financial reporting & managerial control.

d) End-To-End & Real-Time Visibility: The up-to-the-minute upgraded information across manufacturing, customer relationship management, & finance is the current demand of business environment.

e) Integration: Ideal business software for SMEs is defined as one that is instinctive, flawless and user-friendly. Hence business owners must consider software that is easy to integrate into the existing system of the company.

f) Ease-of-use & User Empowerment: Usability is the main feature that must be considered as a key component by a company when choosing a software or adopting a technology.

g) Analytics: Strategic and operational success of a company depends on an understanding of a companys customers & prospects. In addition, a fact-based understanding of companys suppliers, partners & employees in conjunction with wide economic indicators is extremely important.

If we take a glimpse into the history, most SMEs trusted on limited business software. A traditional SME would run on an accounting & financial reporting package. The payroll or sales management areas were managed by separate software.

The main reason may be the non-affordability of these companies to embrace benefits of sophisticated, integrated company-wide ERP systems utilized by big businesses.

Times have changed now. SAP, one of the most popular business vendors has successfully come out with business management systems. These systems are specifically designed for SMEs. SMEs can now look forward to deploy the most sophisticated business software solutions, that would offer them more than just financial & accounting updates. The newest technology introduced by SAP would offer extensive capabilities to manage the entire business, covering all specific & crucial areas. These solutions would efficiently offer great profits to an SME.

Almost all SMEs across the globe understand the importance of focusing more & more on IT. However, the main hurdle they are facing is the inability to afford the exorbitant amount of investment. The low equity capital of SMEs serves as a barrier in receiving credit from a bank. This has left many entrepreneurs in this industry in a dilemma.

SAP serves as the ultimate financial solution in this regard.

According to Alan Sedghi, President & CEO of SAP South Asia, SAP offers two solutions designed specifically for small & midsize companies-SAP Business one & the prepackaged mySAP All-in-one solutions to the SMB segment in India.

He also adds- SAP Business one is an easy-to-use business & operational management solution for emerging & dynamic businesses ranging in size from as low as a few employees.

The SME sector constitutes approximately 95 percent of the total industrial units in India. Small enterprises include 99.4 percent of the countrys SME world.

The current economy of SME is enjoying great profits as per a global survey conducted by Crisil, HSBC Bank & grand Thortom.

Many SMEs in India have given a warm welcome to SAP. One such company is Associated Capsules Private Limited (ACPL). ACPL, one of the worlds largest producers of empty hard gelatin capsules has chosen SAP because of its strong presence in India, great service backup & support.

The company is currently running five plants situated in Maharashtra. These plants are successfully serving about 1, 000 customers worldwide.

The general manager (IT), Mr. Nitin J. Parekh, says, We choose SAP because of its strong presence in India & the positive response of several pharma companies who were already using SAP.

ACPL was able to solve many problems during the implementation of SAP. Currently the company focuses on integrated IT network. This facilitated the organization to make quicker & instant decision.

Director of Associated Capsules Private Limited Mr. Karan Singh confirms, SAP has brought transparency into the system. Very soon, our customers will be able to place orders through the Internet.

Navin fluorine, a leading fluorine & specialty chemicals company choose SAPs, ERP solution. Choosing SAP has offered pure business solutions to the organization. Now Navin fluorine is rich in capabilities to achieve significant savings. This is facilitated by SAPs ability to track complex procedures.

Sanjay Mittal, head of IT at Navin fluorine quotes, SAP has helped us become a truly integrated, process-based organization that allows us to respond to market challenges. Within just a year after SAP was implemented the company enjoyed significant benefits. These benefits included smoother flow of information, enhanced productivity and improved time to market. In a Nutshell, the company has successfully been able to recover its return on investment (ROI) within the first year of implementation.

Not only Navin fluorine & Associated Capsules Private Limited have benefited by this newest technology, but also thousands of SMEs across the globe have benefited and enhanced their productivity successfully.

Choosing SAP offers the following benefits to an organization:

a) SAP offers pure business solutions

b) SAP offers local help within a country

c) SAP is a global leadership in the ERP solution space

d) Manages growth in an organization

e) SAP has a global resource base and offers an organization, the opportunity to expand its presence across the globe.

f) Today, SAP is the only vendor that offers the Auto CAD interface that allows engineering designs to be fed onto a bill of material, thereby making it easy for the customers to make decisions.

g) It is the market leader in offering solutions to SMEs.

SAP is a pioneer & the leader in the Indian SME market. It is the ultimate business solutions in the country and offers the crme of business solutions to the SMEs here.

In the first quarter of 2006, SAP has been successful in signing on over more than SME customers.

SAP currently focuses on offering two solutions designed specifically for SMEs namely, SAP Business one & mySAP All-in-one solutions.

SAP business One is a user-friendly business & operational management solution for businesses that have few employees. The other facility, mySAP All-in-one is a prepackaged micro-virtualized templated solution. It is equipped with content, tools & methodologies that facilitate effective implementation of turnkey. SAP channel partners sell, deploy and support both SAP Business one & MySAP All-in-one solutions.

As already discussed, SAP has contributed a lot to the Indian market. It has developed a strong partner ecosystem to offer mySAP All-in-one solutions to most enterprises based in India.

Alan Sedghi says, Our business partners bring extensive domain expertise in specific micro-vertical segments & geographies.

SAP is leading in India with over 20 mySAP All-in-one partners in the country and that offer over 20 micro-vertical solutions certified by SAP.

Some of SAP partners include

Bristle cone

Wipro

Siemens Information Systems ltd.

Patni

Polaris

Oak Brook

Caritor

Some of the countrys micro-vertical industries such as automotive suppliers, Pharmaceuticals, Construction, Rubber, Textiles, Apparels etc. are also enjoying the benefits of SAP solutions.

There are many customers who are contented with mySAP All-in-one solutions and Adeep locks, Navin Fluorine, DCM engg., Calcom Cements, Murudeshwar ceramics & Luxor writing are few of these customers.

The launch of SAP Business One has also been quite successful and there are plans to further enhance SAPs focus on the small & midsize businesses in India. The president & CEO of SAP South Asia, Alan Sedghi adds, We are witnessing very significant interest from Indian small enterprises for SAP Business One. We have signed with Hewlett Packard (HP) as a national distributor & are also in discussion with a few more partners for expanding our distribution reach. SAP has been eventually successful in building a multi tier channel ecosystem.

SAP financing is also a strategic step by SAP solutions based in South Asia to offer simple, cost effective, predictable & financing for SAP customers who currently exist as well as those who are prospective customers. SAP financing is specially designed to meet the specific needs of the customer by combining all relevant costs into a quantifiable monthly payment.

Leading analysts like frost & Sullivan have authenticated SAPs leadership and presented SAP, the valuable frost & Sullivan market leadership award in India Mid-Market for two years consecutively.

This is the biggest achievement for SAP. Hence, the award is enough to offer credibility to the business solutions.

The software requirements of SMEs are experiencing a transformation. SMEs are under great pressure to keep tabs on their processes & financial progress even more closely these days.

The main reason behind this is the introduction of stricter accounting & corporate governance requirements, the compulsion to agree with the US. Sarbanes-Oxley Act & comply with the international financial reporting standards.

SAP has played a major role in promoting SMEs that were striving to face the tough competition in the industry.

SAP possesses the most integrated, affordable & business management solution. These powerful features of SAP have facilitated SMEs to move ahead and emulate in the industry.

In a nutshell, SAP is ready to take SMEs to the next level.

Author: Steve Manik
Article Source: EzineArticles.com
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