'B-class cities are showing positive trends towards EAS software'

In the concluding part to the IS 2004 survey on investments in B-class cities, Nagaraj L. Bhargava, director marketing and alliances, SAP India shares his perspective on the business potential in these cities with Abhinav Singh

In the IMRB report one clear trend that stands out is, enterprise application software (especially ERP) is among the top IT priorities for businesses operating in the B-class cities. In your opinion what is the business potential in B-class cities and where is the investment expected to be maximum this fiscal?

We were the first vendor to focus on B-class cities in India, as early as 1998, and have been doing healthy business in many such cities in the Enterprise Application Software (EAS) space. Of our 500 odd customers, we have a substantial number are in the B-class cities. The B-class cities are showing positive trends towards adopting EAS software. There are number of factors driving this trend—one, businesses wants to achieve operational efficiency to increase time to market because of heavy competition in India. Two, businesses are looking at the export market—this would need businesses to streamline their operations and supply chain to compete in the global market, and bring faster products to market. Three, companies are looking at increasing customer experience by tracking their customer needs and post-sales support. Hence the investment in ERP and CRM will be high in the current year.

What kind of companies (from B-class cities), opt for enterprise application software?

Companies that are into discrete, process manufacturing and consumer business invest in our enterprise class software. Besides this we have had customers coming in from different industry segments leveraging the business of our software. For example we have had companies like Hero Cycles, Munjal Shova and the Nahar Group in the Chandigarh-Ludhiana belt. Then we have customers such as Sunflag Iron and Steel in Nagpur, Crompton Greaves in Nashik, GTN Textiles in Kochi and GKB Hi-Tech Lenses Ltd in Goa. They have leveraged, digested and benefited from our software like many other companies in the B-class cities of India.

How many new installations are you expecting in the B&C class cities in India in 2004? Which verticals in B&C class cities currently hot in the market?

In 2003 we had 60 new installations about 30 to 40 percent of them came from the B&C class cities, which directly suggests this market is realizing the importance of having an enterprise application to expand and bring transparency into its business.

It would be difficult to give an exact a number to installations we expect in the B&C class cities in 2004, but going by the trend we hope to witness a substantial increase our customer base in the B&C class.

In terms of verticals, textile is currently hot in the country and looks promising. For instance business interest is coming from the Coimbatore and Ludhiana region which is the industrial belt-both for automotive and textile.

What are the challenges you face while doing business in B-class cities of India?

Many companies in the B-class cities exhibit lack of awareness with regard to the business benefits, which they will derive out of our enterprise application software. There are a lot of local software developers who have deployed their software in many companies in the B-class cities. In many B-class cities, where very few companies have adopted an enterprise class software, there is a lot of hesitation on their part to go in for our product. However once the companies in B-class cities decide to go in for our software then there is no looking back and they go all out to leverage the benefits which our software package has to offer.

Are there more ERP than SCM implementations in the B-class cities?

Most of the companies in the B-class cities of India to begin with have gone in for an ERP implementation, and have supplemented it with a SCM or a CRM implementation. We have seen cases where companies have been using a customized ERP solution and have freely jumped in from their software to our ERP solution.

What future growth is expected in enterprise application software in the B-class cities of India?

We would continue to give thrust on expanding our customer base in the B-class cities. However it needs to be seen that some of the companies in these B-class cities are not confined to the SME segment. There are sophisticated companies which are large in size doing world class work. Our endeavor would be to provide different customized solutions to companies in B-class cities. We hope to increase the number of local partners in these cities to expand our reach further.

Is there any special marketing strategy required to tap the huge potential that lies in B-class cities?

We adopt different marketing methodologies to sell our software in the B-class cities of India. Every year we do 10 to 15 city roadshows to showcase our solutions to prospective customers. In the past we have gone to cities like Nashik, Kochi, Chandigarh, Ludhiana, Indore, Vishakapatnam, Vadodara, Bhubaneswar, Lucknow, Kanpur, Nagpur, and Goa. These roadshows have been instrumental in expanding our customer base substantially in these cities. During some roadshows we invite people from companies in these cities who have implemented our software to share their success stories with them. This really helps instill the confidence level of our prospective customers in these cities.

Secondly, we advertise extensively in some local newspapers of these cities and send mailers to some of the prospective customers in the form of physical letters. If a prospective customer shows interest our team goes and talks consistently to them in order to get business in these cities. Besides our direct team we also work with partners like HCL, Wipro and TCS who have a wide representation in these cities. We also work with some local partners who help us in getting business in B-class cities of India.

We heard a large turnout for your recently concluded SAP Summit in Mumbai? Was there business interest or Request for Proposal (RFP) from B&C class cities?

Yes there was big turnout of customers and prospective customers during the SAP Summit wherein we saw a healthy participation from B&C class cities. People had come from places such as Vishakapatnam and Coimbatore to attend our summit and showed lot of business interest in our enterprise application solutions.

Abhinav Singh can be reached at abhinav@expresscomputeronline.com