The enterprise software vendors are reforming their strategies to align their business with various aspects of SMAC, which is now having an unprecedented impact on the industry
By Heena Jhingan
Despite umpteen challenges, the enterprise software segment in India grew at a healthy rate in 2014. There is no sign of a slowdown. According to research firm Gartner, the enterprise software market in India is projected to reach $4.7 billion in 2015. By 2018, India’s share of the software market in Asia-Pacific is expected to reach $6.8 billion.
Shweta Baidya, Senior Market Analyst, IT Software, IDC, says that the overall enterprise software market in India witnessed a stable growth in the range of 10-11% during first half of 2014. The growing need to understand customer preferences better and roll-out personalised offers led to the healthy adoption of CRM and BI. Several enterprises were looking at analytics to predict market demand and align their supply chain. Investments picked up in sectors such as online retail, BFSI, manufacturing and other such sectors.
She points out that the growth factors tend to differ from one industry to another, depending on unique challenges that the business is facing, changing market dynamics and the level of technology adoption. “We see that large manufacturing units are integrating their ERM solutions with the PLM and SCM modules for better resource utilisation. Some of them are also looking at cloud based solutions for easy scalability and flexibility options.”
Among consumer oriented sectors improving customer experience is a key growth driver. Banks are investing in solutions for end-to-end customer management, including multi-channel customer on-boarding to help customers avail services without having to physically visit the branches. “Retail industry spending is driven by retail analytics, virtual or mobile shopping, mobile POS, and the like,” adds Shweta Baidya.
Niraj Kaushik, Vice President, Applications Business, Oracle India, observes that with the rapidly increasing digitalisation and growing momentum in the government space, 2015 is expected to be a much more buoyant year.
Enterprise software market is being revitalised. Software buying is increasingly shaped by cloud services, digitalisation initiatives, information and data analytics, and mobility. These trends are changing how software investments support organisational goals and outcomes, driving new business models, and reshaping how software is valued, purchased, and utilised.
The SMAC way
A significant change has been witnessed over the last 5 years in the global enterprise applications and business software markets, notes Tarun Kaura, Director – Technology Sales, India, Symantec. Emergence of technology trends like BYOD, mobility, cloud and analytics have led to an explosion of data—both structured and unstructured. These disruptive technologies are pushing the product vendors to realign their product strategy. Hence we are witnessing a radical change in enterprise technology and there is impact on the suite of offerings, services as well as delivery ecosystem.
This has led to the creation of new markets, where there is increased scope of differentiation in the otherwise saturating enterprise segment. These offerings are undergoing a transformation to provide better value proposition and architectural design in order to adapt themselves as per the demand generation. “Cloud computing has gained significant maturity and SaaS offerings have witnessed traction across geographies and industry segments,” Kaura says.
Owing to the shift in the way enterprise applications are now architectured and deployed, social collaboration and mobility are emerging as design cornerstones for solution providers like Oracle.
“Customers are asking for systems that adopt such concepts. What is even more interesting, however, is that social is not the old standalone system, but a contextual collaboration design element that customers can use within any application. They do not need to switch to another screen or application to reap social benefits. Similarly for analytics. Oracle’s analytics are pre-built reports, relevant to the task being performed and easy to use,” Kaushik of Oracle says.
He adds, Oracle has embraced mobility in a big way – every application is mobile-enabled. “We have a mobile application development toolkit that are being used by customers to create secure mobile apps.”
“Mobility,” says Jaydeep Deshpande, Regional Marketing Manager, Qlik, “will remain an important factor for responsive platforms.” According to him, by the end of 2015, developers and administrators who thought they had solved their problems by standardising on one platform will most likely be facing the same problems again. “They simply must give users a responsive experience. It’s the same for BI and data discovery software,” he adds.
Most of the Zoho apps, including Zoho CRM are accessible on mobile. In 2014, Zoho introduced Facebook and Twitter tracking from inside Zoho CRM. “All of Zoho is on the cloud. All these technologies make sure our customers are leveraging the latest technologies, when it comes to supporting their customers,” asserts Gopal Sripada, Senior Product Marketing Manager – Zoho CRM, Zoho.
Samik Roy, Director – Dynamics, Microsoft India, is in agreement. He believes that the rapid advances in cloud and mobility, along with rising customer aspirations of rapid implementation and user adoption, are fuelling the demand for business agility. Enterprises desire to be enabled to respond quickly to changes in their business environment. Businesses feel they must tackle their enterprise IT investments in a consistent and timely manner while cutting the fat out of capital expenditure. It is important for the enterprises to capitalise on the cloud opportunity and save on capital expenses by adopting cloud-based enterprise software (e.g., ERP, CRM, SCM).
Businesses are also demanding intelligent solutions that can mine their reservoirs of raw data and make sense of it all, in turn, providing the customer with a more unified experience. Analytics solutions that sit in well with incumbent products are preferred over those that don’t. Mobility, analytics and cloud will continue to shape enterprise software offerings. Growth in this segment will depend on how well the market participants inlay their offerings with more domain knowledge and industry-specific expertise.
Here is a look at the how some of the most commonly used application software performed:
ERP
Regarded as the backbone of an enterprise, Enterprise Resource Planning (ERP) has a come a long way. Harsh Vardhan G, Executive Vice President—Global Marketing & Channels, Ramco Systems Limited, is of the view that the era of buying an ERP for automating operations is a passé. He says that the organisations no longer evaluate systems for functionality alone. The focus is on moving towards investing in an ERP which is intuitive and high on usability. While addition of new functionalities is part of every product roadmap, the thrust is on building capabilities that can help clients transform their business operations.
“We launched Ramco’s in-memory based planning and optimisation (IPO) application which resides on top of the ERP and helps process tasks/actions in memory, in parallel and at drastically high speeds. Whether the need is to run constraint-based Real Time Scheduling, Logistics Planning, Demand Forecasting, Production Management, or Capacity Planning, Ramco IPO helps achieve all this,” says Harsh.
With the latest ERP trends there is a continuous momentum and we have been witnessing greater uptake from the market. While in 2014 segments like professional services and retail thrived, 2015 will see e-commerce businesses taking off in a bigger way. A lot of traction in traditional sectors like manufacturing and logistics segment is also seen.
Vardhan says, “There will be a consistent increase in adoption of ‘Two Tier ERP Strategy’ when it comes to extending or adding solutions to the IT backbone. Enterprise mobile application market will witness exponential momentum in the coming year where there will be extensive usage of enterprise cloud services on mobiles and tablets. The enterprise application market will focus on providing customised, seamless experience to end users and automate business processes by increasing accessibility across platforms.”
Interestingly, several enterprises in India are in a transient phase from small to medium to large and hence they keep moving from one ERP/CRM/BI solution to another.
“Enterprises transitioning to specialised ERP/CRM software from heavily customised general/legacy ERPs. Enterprises are looking for newer licensing models, self-service BI and analytical options,” says Aju Mathew, Director – Enterprise Solutions, Aspire Systems.
CRM
As businesses today seek a higher return and increased effectiveness on marketing, sales and service programme investments, the customer relationship management (CRM) software market is seeing dramatic growth and enhanced offerings, including data analytics and social CRM applications, mobile functionality as well as gamification features.
Behavioural targeting, coupled with online website visitor tracking, monitoring each customer’s journey through the entire life-cycle and data-driven marketing process, is helping businesses to thrive and become game-changers in their respective segments. Companies that are using legacy software need to upgrade their technologies and processes to meet the needs of the businesses.
Elucidating the changes seeping into the CRM fabric of enterprises, Gopal Sripada, Senior Product Marketing Manager, Zoho CRM, Zoho, says that with about 40% growth rate in 2014 they have performed better than the industry. Thanks to an increasing penetration of mobile Internet, especially in the Tier 2 cities, like Coimbatore, Vishakhapatnam, Indore, etc., they are are seeing a lot of growth opportunities in these areas for their sales & marketing, productivity & collaboration and HR applications.
“Our flagship product Zoho CRM’s new CRM Plus Edition is a super success. Our customers are now showing lot of interest in this offering ($50/user/month), which encompasses several sales, marketing and support apps,” says Sripada.
“At Zoho,” he says, “we believe that there is a better way of handling the growing pains of small-business owners. And wehave designed our CRM system especially for small to medium-sized businesses, keeping the ease of use and flexibility to scale in mind. Being a bootstrapped company, we understand the importance of customer acquisition during the initial stage of business growth.”
“That is why we were always committed to helping startups and small businesses with free CRM plan to stay focused on nurturing early adopters and converting them into paying customers. Now, we are happy to expand our Free Edition further with 10 free users and more features,” he reasons.
More importantly, as the cost per customer acquisition is increasing exponentially, business owners are placing more time and resources on improving the customer journey experience throughout their life-cycle, thereby trying to retain them at every step. “Tighter integration between customer relationship management (CRM) software modules with ERP, SCM and BI tools play a vital role in generating more revenue per customer,” he suggests.
In 2014, the company witnessed enterprise customers adopt its CRM solution for usage across more than 10,000 users,says Samik Roy, Director-Dynamics, Microsoft India Of these, some included global deployments and competitive replacements as well.
“We won customers across all major segments including Banking, Insurance, Healthcare, Government, IT/ITES and Manufacturing. Our CRM Online offering on the cloud gets further enriched due to the native integration with Office 365, Exchange, SharePoint, Yammer, Power BI and Lync, which enhance the productivity of our customers,” he says, adding that this also facilitates greater adoption as the users can do all daily activities from one single platform via a very user friendly and intuitive interface.
Business Intelligence
Gartner had projected Indian BI software revenue to reach $139 million in 2014, a 15% increase over 2013 revenue of $121.2 million. Indian organisations are making investments in BI software, especially data discovery solutions from guided analytics to self-service data visualisation, as they recognise the importance of empowering individuals in the organisation to access and analyse data, collaborate on their insights, and make decisions that will drive success for the business. Several enterprises such as Mahindra & Mahindra, HDFC Life, and Shoppers Stop have benefited by the use of BI tools.
In fact, 2014 proved to be an exciting year for vendors like Qlik that added many new customers to its portfolio, including Thangamayil, a leading jewellery retail chain with 30 stores across several districts of Tamil Nadu. Qlik helps in effectively monitoring and analysing 40 million records of inventory in near real time. It reduces stock levels to improve profitability, and provides better customer satisfaction. As a result, they are now enjoying 5% cost savings across all stores, and this in turn means reduced prices for their customers.
The industry is facing a data deluge. According to a report form IDC and EMC, the world’s overall data will grow by 50 times by 2020, but only 37% of this data will be useful. At the same time, with fast changing market demands, organisations need to use information strategically to thrive, not just survive. They are sitting on a goldmine of data, but many simply do not know how to derive value from it.
Deshpande of Qlik is of the opinion that it is the knowledge, experience, and intuition that people bring to the task that creates the sequence of questions that reveals the answers.
“The more people have access to self-service data discovery tools, the more value organisations can get. That is what drives the market for our solutions. Several analyst firms have made the same prediction. IDC predicts that visual data discovery tools will grow 2.5 times faster than rest of BI market. By 2018, investing ‘end user self-service’ will become a requirement for all enterprises,” he adds.
The road ahead
The industry watchers believe that 2015 will be dominated by mobility, application life cycle management and BYOD. There will be a strong adoption of SMAC (Social, Mobile, Analytics and Cloud) as organisations will transform from being software enabled to software driven businesses. This will create a structural change in many industries, including the technology industry. IT decision makers in India expect next-generation technologies to give their organisations a competitive advantage.
Baidya of IDC predicts that the SMB segment will be one of the key contributors in the growth of the market going forward. This segment has been the most agile and nimble in terms of 3rd platform adoption owing to limited legacy infrastructure to worry about. As a result, there is increased collaboration between ERM (Enterprise Risk Management) vendors and their partners (SIs/ISVs/TSPs) to cater to this segment, which was not a priority till sometime back.
The market is slowly waking up to the benefits of big data and analytics and there are cases of deployments across sectors. The focus on a wide variety of marketing analytics for customer segmentation as well as to understand new areas such as sentiment analysis related to social media will drive CRM analytics adoption.
Government reforms are also widely expected to trigger significant investments in areas like banking, manufacturing, retail, etc.
