In focus : Doing More With Less Is The Buzzword,Amrita Tejasvi

Adopting innovative solutions is the mantra to succeed and sustain in the IT
industry. To compete in an environment that is mounted by pressure and to narrow
down the response time of the customers, enterprises have acknowledged the value
of enterprise applications.

More than an option, enterprise applications have become a necessity for
companies and it is an inevitable part of their system that contributes to
better decision making, utilizing energy, and increasing the visibility of
business information.

"Many changes have appeared in the business application market in India.
Earlier, we had to make efforts to convince the customers to adopt business
applications in their organizations. Now, customers themselves ask us for a
better package of business application and they consider it as an important part
of their system. Awareness has increased among the customers.

Organizations are internally leveraging their reach on ERP and CRM
application," commented Sushant Dwivedy, Business Group Lead-MBS, Microsoft
Corporation (India).

Facts and figures

According to a Dataquest report, enterprise application industry recorded a
growth of 26 percent at Rs 9,977 crore in FY 2008.

It marked an inconsistent performance across sectors. Barring BI (36 percent
growth) and the specialized horizontal applications (46 percent) and those
beyond standard enterprise-wide applications, the core application areas like
ERP, CRM, and RDBMS grew modestly.

It further mentioned that ERP has traditionally dominated the manufacturing
vertical, in telecom, BFSI and other customer-facing verticals; the CRM
applications are more popular than the ERP applications.

The report stated that CRM adoption during FY 2008 was mainly seen in terms
of three areas-sales force automation, customer service and marketing
automation. IT/BPO, telecom and BFSI accounted for more than 70 percent of the
CRM market in FY 2008. The increasing number of call centers and the growing
customer base of telecom service providers bringing along with it increasing
complaints ensured that the CRM vendors were busy throughout the year. And
unlike ERP, where large enterprises had seen saturation, there were still fresh
deployments happening this year.

SMB-The potential pool

SMB contributed maximum to the ERP market in FY 2008, accounting for nearly 40
percent of the overall market, revealed the report. In the process of expanding
the ERP space, vendors are concentrating on the SMB segment.

Speaking on the trend of business application in SMB space, Pantulu Avasarala,
Director, Cincom Systems India said, "ERP has become a commodity in SMB and the
application market is growing more among the middle and small enterprises as
compared to bigger enterprises."

He further added, "SMBs do not have much option but to adopt business
applications in their organization in the absence of which it will be difficult
for them to survive in the coming years. SMB has got huge potential and Cincom
is right now focusing on this particular segment only. We have come up with a
highly engineered product line that is cost-efficient and at the same time
contains all the requisite features needed by an SMB client."

Reflecting his views on medium enterprises, Thomas Abraham, MD, Sage Software
India added, "As the SMBs have grown exponentially, they now feel a major need
to automate their accounting, operations and customer facing processes. Also,
the IT infrastructure has improved immensely allowing SMB to invest in ERP and
CRM applications, and look beyond manual or

semi-automated methods of controlling processes."

Business application and economic slowdown

Economy across the globe is facing financial crisis, and in this situation
customers are careful about their IT expenditures. Vendors need to come up with
solutions that justify the IT expenditures, as there is a financial crunch in
the market. Customers are becoming more demanding while spending on IT
infrastructure and they need maximum benefit out of one solution. This throws
the challenge to the vendors to be more proactive in the market. They need to
keep a close watch on the trends of customer demand and supply solution
accordingly.

"Vendors need to customize the enterprise application solution so that
customers can avail the maximum functionality in a limited budget. Also the
solution should be flexible to get adjusted to changing business models of the
enterprises, shared Avasarala from Cincom.

Adding further about the impact on business application market, Prateek Garg,
CEO, Progressive Infotech mentioned, "Enterprise application is still in
adoption phase and is limited

to top 500 companies only. Therefore, the global recession will push the
companies in SMB space to opt for cost-effective solution to manage their
business. Therefore, ERP will be the right choice for them."

Road ahead

One of the trends that will dominate the business application market in
India is solution-on-demand. Software as a service (SaaS) model will support in
redefining the ERP market. As predicted by analysts, the service-on-demand model
will transform the overall look of the business application market and the
packaged software will turn to subscription services.

"In the coming time, CRM will gain more momentum as compared to ERP, as
customers will find it more relevant for their organization. CRM has started
performing better because

there is an untapped pool of opportunity in this segment. We give emphasis on
software with service package and hence SaaS will play a major role in the
coming time," shared Dwivedy of Microsoft.

The approach will help vendors in redesigning and deploying applications that
can be implemented with new configuration and can help the companies to create
new business functions within an organization.

"Comprehensive application will be given more importance that would include
infrastructure tools and business application combined in one package. This will
be more cost efficient for the customers, as they would pefer buying products
that have higher functionalities at a better price," said Garg.

Adoption of Saas

According to a Gartner report, the second largest contributor to the overall
SaaS enterprise application markets is customer relationship manager (CRM). In
2008, SaaS within the CRM industry is expected to exceed $1.7 billion in total
software revenue. The CRM SaaS revenue is expected to exceed by $3.2 billion in
total software revenue in 2012.

"SMBs need to consistently work towards streamlining business processes.
Innovative, efficient and integrated business processes need to be implemented.
These integrated processes include not only departments but also partners,
suppliers and customers. To meet these challenges, we have recently, launched
the Ramco OnDemand ERP, which works on SaaS model. The solution is best suited
for the SMB market with no capital expenditure, maintenance and IT
infrastructure. It works on subscription and is highly scalable. The solution is
easy to use, requires minimal training and can be accessed from anywhere. The
benefits of the solution are the best fit for the SMB market and their
requirements," shared Chetan Pathak, VP-India Operations, Ramco.

According to a recently released report by Springboard Research, the
enterprise application integration, the second-ranked market in India currently,
will slip to the third place by 2011 despite registering a high CAGR of 19.1
percent.

Vendors are supplying the best business application solutions to the
customers but they may have customized requirements that vary from vertical to
vertical. Therefore, even the completely packaged solution fails to meet all the
requirements of particular customers.

A major challenge to enterprise application vendors lies in providing
seamless integration between all their extended applications, which can help the
enterprises in being demand-driven organizations. Therefore, keeping in mind the
fierce global competition and the demand of customized systems, vendors need to
innovate customized business application products in the market that is able to
streamline quick and reliable information.

Amrita Tejasvi

amritat@cybermedia.co.in