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Customization for improved processes, productivity

ERP, SCM, CRM, and data warehousing/data mining applications can streamline processes and increase productivity. That's why automation/customized software is still high priority

The timely delivery of products and services is crucial for succeeding in any business. Manual co-ordination of the numerous processes and business functions is a Herculean task and so there is increased dependence on automation and software. That's why the requirement for customized or automation software is increasing, especially in the Manufacturing and Banking/Services sectors.

The average rate of increase in customized software requirement is 51 percent (second only to converged network). In fact 87 percent of the respondents affirm their requirement for automation/customized software has increased.

Considering existing infrastructure, ERP seems to be the most prevalent—59 percent of the respondents say they have some sort of ERP in place. This is followed by data warehousing/data mining (27 percent) and CRM (23 percent).

In 2002-03, most enterprises are looking forward to investing in ERP, data warehousing/data mining and CRM applications. The research reveals that 46 percent of the respondents are planning to implement ERP, 39 percent need CRM, 36 percent need data mining/data warehousing, 20 percent require e-business applications and 11 percent need SCM applications. Data warehousing/data mining and CRM are the two segments where requirements have grown significantly this year.

By improving the interaction between different entities, processes can be streamlined, time is saved, inventory cycles are reduced and costs/overheads are slashed. That seems to be the mantra for managers in the manufacturing sector.

For instance, an ERP solution can streamline manufacturing processes and connect the company directly with stockists to review stock details online. This helps reduce overhead costs and increases efficiency levels within the company.

Also, due to increased competition and tighter markets, companies are focusing on improved levels of customer service. The objective is very clear, to retain existing customers and acquire new ones. This, tied with the emerging Call Center industry, is fuelling the demand for CRM applications.

Statistics reveal that the need for CRM is the strongest in the Banking/Services and IT/Telecom sectors.

Sectoral skew
Around 33 percent of respondents said automation/customized software is one of the key areas of the current budget.

The average amount allocated last year for automation/customized software was Rs 131 lakh and it has gone up to Rs 227 lakh for the current year.

The Manufacturing sector is expected to invest heavily in this category. In fact 53 percent of the respondents from this sector said automation/customized software will be covered under the current budget.

Many companies in Banking/Service industries are also expected to invest heavily in automation/customized software.
Among the various sub-categories, ERP is the most prominent vertical in this space. There is an obvious trend here. The various sub-categories are skewed for different sectors.

For 2002-03, many companies from the manufacturing sector are expected to invest in ERP and SCM. The reason: to backward integrate with suppliers and forward integrate with distributors thus saving costs. Already many companies in this sector have gone in for an ERP solution. About 63 percent of the manufacturing companies have a requirement for ERP and 29 percent plan to go in for SCM.

CRM and data warehousing/data mining is expected to garner stronger investment from the Banking/Service sector. 50 percent of the respondents in the Banking/Service sectors said they are going in for CRM and 40 percent highlighted their interest in data warehousing/data mining solutions.

Investment in data warehousing/data mining solutions will help Banking and Service industries to observe specific trends in the data and provide a bouquet of value-added services to its customers. For example, a bank can analyze customer transaction data to identify trends and offer customers value-adds like loans, credit cards or demat accounts.

Outlook
As a business expands it will seek ways to automate processes. In the future, we can expect companies to increase their spending on automation/customized software applications like ERP, CRM and data warehousing.

After large enterprises, SMEs are likely to adopt ERP in a big way. An area to watch for is ERP-II or second generation ERP, which considerably improves on the shortcomings of traditional ERP. Vendors are now incorporating ERP-II features in their offerings.

The entry of MNCs particularly in Banking, Insurance, and IT/Telecom industries has compelled local companies in these industries to adopt CRM solutions, to improve levels of customer support. Even SMEs are expected to go for some sort of CRM solution that would help them service customers better.

Research Snapshots

  • The average amount allocated for automation/customized software has gone up from Rs 131 lakh to Rs 227 lakh for the current year
  • In 2002-03, most enterprises are looking forward to investing in ERP, data warehousing/data mining and CRM applications
  • 87 percent of the respondents state their requirement for automation/customized software has increased
  • 59 percent of the respondents say they have some sort of ERP in place
  • For 2002-03, the manufacturing sector is expected to invest heavily in ERP and SCM
  • Many companies in Banking/Service industries are also expected to invest heavily in automation/customized software
  • 50 percent of the respondent in the Banking/Service sectors said they are going in for CRM and 40 percent highlighted their interest in data warehousing/data mining solutions

Top 5 benefits CIOs SEEK

  • Improvement in operational efficiency
  • Better customer service
  • Cost saving
  • Faster business decision making
  • Meet core business demands
 
     
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