“ERP and CRM Are the Current Hot-topics in India”

Alan Sedghi
Alan Sedghi

What does “software” mean for India?

Sedghi: India today stands tall in the software industry segment. There has been an exponential growth of the Indian software Industry. India’s software saga, began with staffing, moved its way up to software development, then integration, and now centers around top-of-the-line business consulting projects, demonstrating the potential of India to move up the value chain. According to a recent study conducted by Nasscom ( The apex body in the Indian Software Industry) , the Indian Software and services industry grossed annual revenue of over US $ 10 billion, during FY 2001-02, registering an overall growth of 26 percent from the previous year. Moreover, the total size of the industry for FY 2002-03 is expected to be around $13 billion with total revenue going up to $80 billion by 2008, almost 8 percent of country’s GDP.

How do you see India’s current economic situation and the potential of the software market?

Sedghi: India has made impressive progress over the 1990s: Economic growth averaged six percent a year, led by strong advances in the services sector. The IT industry has proven particularly dynamic and is now of global significance – and its success proves that India is perfectly capable of competing and succeeding at the top international levels.

The Enterprise Software Business particularly has gone through its share of challenges stemming from a slower offtake and demand situation. According to IDC, the ERP market was severely affected by the economic slowdown and grew only marginally in 2002 to reach US $ 120 Million. But it is expected to grow faster than the total market at a Compounded Annual Growth Rate of 10 percent during the forecast period 2001-06.
While the overall market situation remains “Challenging”, it is heartening to note that as companies endeavour to reduce IT costs and consolidate vendors, they are migrating to solution providers with a solid track record of deploying solutions that deliver quantifiable business benefits. Enterprises are also closely evaluating vendors for commitment to delivering and improving on their full line of services to support their products. We are seeing a clear “choice” that enterprises across the Industry Spectrum are exercising towards vendors like SAP.

What industries does SAP regard as most important in India?

Sedghi: In India, SAP will continue to provide industry-specific business solutions to address pressing business issues that are being faced by customers in key vertical sectors. In India SAP regards process industries (particularly oil and gas), discrete manufacturing, consumer products and aerospace and defence, in addition to utilities, telecom and media, as the major growth drivers. Banking and financial services industry is another key industry, it is the highest spender on information technology in India.

Which is the hot-topic in terms of software products?

Sedghi: Despite some positive economic indicators, the climate of economic uncertainty has no doubt kept corporate investment lower than it otherwise would be, thereby slowing software market growth. Specifically, application software such as enterprise resource planning packages is estimated to be hot and would grow by almost 11 percent by 2006, according to IDC.

So India seems to be a growing market for ERP applications. But what about the demand for other solutions of the mySAP Business Suite?

Sedghi: Today companies are realizing the need to use product definition information throughout the product life cycle. Industries such as aerospace, automotive, communications and mechanical machinery have been using Product Lifecycle Management (PLM) solutions to the greatest. Companies are integrating the management of product definition data that has classically been used only within engineering and manufacturing organizations, with other business areas such as sales and marketing, customer service, maintenance and operations. They are sharing their product information across their supply chain(s) to integrate their business with their partners and customers. Larsen & Toubro (India’s largest engineering and construction conglomerate) is among first customers of SAP who have gone live with mySAP PLM.

There is a lot of interest among Indian enterprises solutions for Customer Relationship Management (CRM) as well. The CRM market grew at a healthy rate, in spite of the economic slowdown affecting the growth of ERP and Supply Chain Management software markets. The CRM market in India, though in its nascent stages, is an area of high interest among both vendors and users alike. With the large organizations finishing off with their back office integration and looking at optimizing the front office, and most of the small and medium businesses (SMBs) are looking at customer retention as a focus area. The industries embracing CRM in India in a big way are automotive, telecom, retail and insurance. Some of the major customers of mySAP CRM are Asian Paints, L&T, DCM Shriram, Sudarshan Chemicals, Tata Infomedia and Tata Telecom among others. Worldwide SAP is the second largest vendor in CRM after Siebel; in India SAP is number one with close to a 30 percent market share.

How does your strategy fit into this context?

Sedghi: An investment in business software is more than a path to improve internal business processes. More importantly, it is a tool to improve collaboration with large customers, distributors, partners and suppliers. The launch of SAP NetWeaver earlier this year, is in line with the above trend. SAP recognizes that what’s right for a business today also should accommodate what’s right for it in five or ten years. Our focus on the small and medium sized businesses is in line with the trend that the market is witnessing, as SMBs have started making sizeable and long-term commitments to their software investments. There are two new solutions that we would be introducing later this year in the Indian Market for the SMB segment; these SMB solutions are scalable to ensure that software will meet the needs of their business today and in the future. SAP has always kept abreast with the changing market dynamics; its powerful solution for 23 industry verticals is another evidence to support that.

What do you expect to happen within the next five years?

Sedghi: The ‘battle’ between the Best of Suite and the ‘best of Breed’ will be even more one sided in favour of Best of Suite. This is where SAP shines and will continue to shine even further. Our holistic, best of suite, comprehensive and industry specific solutions, combined with our unfettered customer focus, will further widen the gap between SAP and all others. We already see this phenomenon in the market manifesting itself through consolidation attempts by our competitors whose strategies have obviously failed them.

What’s your personal motto?

Sedghi: I believe in creating winning teams. One has to break away from established norms and gear up to challenge mediocrity. A leader should be a never-ending source of energy. The leader has to set the tone to ensure excellence, promote independent thinking in his people, encourage new ideas, show willingness to take calculated risks and entice loyalty among his subordinates. We are what we repeatedly do, unimpeded focus on customers and excellence in execution. This then becomes not an act, but a habit.