Start-ups are driving more revenue and more success using digital transformation.
That’s according to a new report from SAP India, in collaboration with Zinnov Digital, which found 80% of start-ups in the enterprise tech, health tech, retail, logistics, and autotech sectors have reported a substantial increase in revenue from cloud transformation.
The report, ‘Driving the next phase of sustainable growth for Indian Start-ups in 2023 and Beyond’, polled Indian 115 start-ups to reveal they will continue to invest in enterprise technology platforms, driven by their proven ability to deliver business outcomes and ROI. Some of the key benefits of enterprise applications include top-line acceleration and control on the bottom-line, quick revenue recognition, and handling complex billing based on contracts and consumption for differentiated service lines.
Announcing the findings of the survey, Sanket Deodhar, Vice President- Digital Natives and Startups, SAP India, said, “Indian start-ups today require adequate tech infrastructure to help them diversify business, scaling up operations and acquisition and retention of the right talent. Mission-critical Enterprise Resource Planning (ERP) systems on cloud are powerful enablers that provide valuable insights and direction to navigate any challenges, and accomplish their goals, including attracting investors, fair valuations, and retaining a competitive edge.”
Key findings from the report include:
The best-run start-ups run on a modern digital core
- 74% of start-ups in India have reported direct benefits from implementing enterprise applications.
- 24% of start-ups believe that achieving maturity in their business model, driven by robust technological capabilities and scalable operations, plays a crucial role in attracting investors.
- About 68% of respondents reported a strong growth in revenue after adopting enterprise technology solutions, leading to an increase in their valuations.
Enterprise cloud is the future enabler
- Start-ups will continue to prioritize enterprise technology as a critical aspect of their investment to navigate the next phase of growth and development.
- 37% of the start-ups plan to increase their spending on enterprise applications by more than 15% in 2023.
- 81% of start-ups cited automation and standardization of processes across divisions, with faster customizations as the primary benefit being derived by hosting enterprise applications on the cloud.
- Adoption across the public cloud is set to grow by two times, whereas the private cloud promises around a 50% increase in adoption, indicating a high focus for start-ups to shift their workloads to the cloud.
Addressing challenges, start-ups stay resilient
- Despite changeable market conditions, Indian start-ups continue to grow and there is no sign of investments slowing down for high-performing start-ups in the coming years.
- More than 75% of start-ups point toward metrics such as revenue generated in the past year, product and service margins, and market share based on traction, for determining valuations.
- 81% of start-ups reported customer sentiment as one of their biggest business concerns, indicating the importance of customer acquisition, experience, and servicing metrics.
- 70% of respondents noted that partner evaluation and lack of in-house knowledge to manage remain the top challenges for start-ups while implementing enterprise application solutions.
Commenting on the study, Sidhant Rastogi, Managing Partner at Zinnov Management Consulting, said, “In 2022, Indian start-ups faced significant challenges due to market headwinds and reduced valuations. In 2023, we remain optimistic that investment in the right technology and organizational augmentation can help start-ups navigate the economic slowdown caused by the recession and other macroeconomic factors. By doing so, they can ramp up valuations and revenue and achieve sustained growth.”