SAP betting big on SMB enterprises in India
SAP has developed a fresh technology platform, which caters to the needs of SMEs, and expects the growth from these businesses to remain strong.
Monday May 22, 2023,
4 min Read
For enterprises today, technology is central regardless of size. This is particularly because they are on the lookout for new developments which can help them grow their business.
In many ways, COVID-19 was a booster to the adoption of technology among SMEs, as a large part of the activity was being done remotely. In the post-pandemic world, these enterprises are keeping pace, while their priorities have changed.
To provide technology platforms and solutions to SMEs, German enterprise software company SAP recently launched its new offering with a specific focus on the mid-market segment called “GROW with SAP”.
SAP maintains that it has always focused on SMEs. Now, it believes the potential from this segment is stronger than ever before.
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Subramanian Ananthapadmanabhan (Subbu), Senior Vice President - Midmarket, Asia Pacific Japan, SAP, in a conversation with EnterpriseStory, said, “Post Covid, the world has seen different adoption of technology by the mid-size organisations.”
The mid-segment businesses today want to be at the cutting edge of technology innovation. India is no different in this regard, Ananthapadmanabhan says. “The kind of growth we are seeing now from the mid-market segment is likely to continue till 2025,” he adds.
This focus on the SMEs has opened a new window of opportunity for SAP both in terms of market and industry segments. Though the definition of SMB varies from country to country, according to SAP, there are 64 million medium and small enterprises (MSMEs) in India that generate more than 111 million jobs, contributing about 30% of the nation’s GDP. Earlier, it was the top 8-10 metros which were contributing to its growth, but now it is finding stronger traction from Tier II and III cities.
The requirements of the mid-market segment are quite different from the large enterprises. They are looking at how fast one can implement the software solution and platform to get them going where it can deliver on the three Ps - productivity, predictability and profitability.
Typically, any ERP implementation—a system that integrates many functions across a business—at a large enterprise can take months. With GROW with SAP, it claims that the entire process can be completed in 4-6 weeks.
“The entire discussion is on how quickly I can go live and extract value. What are the innovations that I can get right and more often than not most organisations that come to us are talking more than ERP,” says Subbu.
SAP also faced some challenges while engaging with a set of companies. Particularly, with new age startups, it had to convince them it was just not another legacy software company. “With Grow with SAP, we are saying anyone new to us, you have a pre-packaged offering, which is quick to implement at the right price,” says Subbu.
He adds SAP has also started placing its personnel in these locations and partners are also signing up to be on its platform from these regions. These include places such as Nagpur, Kanpur, and Bhopal to name a few.
In addition, it has given SAP reach into newer industries where it was earlier concentrated in 5-6 sectors like professional services, CPG, chemicals, automotive, discrete manufacturing and mines & metals. According to Subbu, they have now got customers like Wakefit and Ola Electric on its platform as well as a flour mill company in Madhya Pradesh.
“Today the young companies like startups are helping us expand our portfolio,” said Subbu.
The common thread among them being on how fast they can adopt these newer technology platforms and the returns they are able to generate. This has created an ecosystem in itself for the mid-market companies, developers, implementation partners.
Edited by Akanksha Sarma