India is the fastest growing market for SAP globally and the manufacturing sector has been a major contributor to this growth – both large enterprise and SMBs. To maintain its growth story in India, SAP is enhancing its offering for other verticals: telecom, utility, retail, banking, insurance and the public sector.

SAP is forming alliances with local system integrators to develop industry specific solutions around its emerging technologies to enhance the affordability of SAP implementations in different industry level. For example, SAP allied with Wipro to develop an analytics solution for the insurance industry. SAP has also announced a plan to implement a “start-up focus program” to help Indian start-up companies scale their business through the adoption and development of new applications on SAP HANA.

At the technology level SAP is – as at the global level – driving innovations around big data analytics, cloud and mobility. SAP has a plan to introduce telecom industry specific analytics and customer churn relationship management software, offering it through established network equipment vendors in India. For the retail sector, SAP has introduced industry specific data analytics solutions.

The company is also working to improve business relations and faith with public sector customers, where several India-specific challenges and opportunities hold the key:

1. The biggest challenge for SAP in the Indian in the public sector is the longevity of the procurement process. Even in the middle of the deal decision making people come and go, sometimes the decision is made and then an objection is raised and the decision is put on hold. In India state level government (headed by different political parties) take decisions on certain state-level projects and central government have very little say into those projects. Thus, SAP is targeting more of country level projects controlled by central government. Also, SAP endeavours to show it is compliant with government regulations and security criteria and has a mechanism to maintain that compliance.
2. SAP has launched a Hindi version of its ERP solutions, developed by SAP Labs India along with government agencies, mainly targeted at e-government projects. SAP ERP in Hindi will target business areas such as taxation, accounting, employee data, provident fund, payroll, loans, claims and employee self-services. SAP has also launched its File Lifecycle Management solution to improve public sector process automation (in English and Hindi).
3. SAP is working closely with one of the gram panchayats (local self-governments at the village or small town level in India) to provide “last mile” connectivity with government databases to help villages deliver schemes giving citizens access to e-government.
4. The company has been working on a pilot with Soda Village, Rajasthan, to provide a “single window” solution with the list of all schemes and plans meant for rural development. This will help citizens to get their marriage and birth certificates at their door step.

PAC View:

Innovation will be the key driving force for SAP’s future growth in India. SAP’s business for big data analytics solutions will be primarily driven by the needs of telecom, banking and insurance verticals but the topic will also resonate in retail, utilities and Government. The pay-per-use pricing model of cloud solution will be another driving factor for company’s future performance due to its cost structure and shorter time to market advantage. In government, however, specific issues arise and it is encouraging to see SAP is taking the initiative to tackle these.

However, the competition is rising for SAP in India with its competitors such as Oracle, Salesforce.com and Workday offering cloud based business applications for ERP, CRM, HR, etc. They are also driving hard in social software, mobile and – to some extent – analytics, and so SAP has to position quickly with its innovation agenda in this challenging, but opportunity-rich, market.

Post by Biswajit Banerjee