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How SAP empowers SMEs in India

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BANGALORE, INDIA: SAP has been known as an enterprise-class applications vendor. Today SAP has tapped into the realm of Small and midsize enterprises (SMEs). SMEs are the first to adopt software as a service (SaaS) and this model continues to gain grip within the SME market.

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According to an Economist Intelligence Unit (EIU) survey sponsored by SAP, small and midsize enterprises (SMEs) in emerging countries are expanding and flourishing financially while their counterparts in the developed markets - despite under difficult market conditions - are confident of an economic upswing in the near future. Finding and keeping new customers, attracting talent and operating efficiently stood out as top challenges worldwide.

Priyadarshi Mohapatra, Vice President - Emerging Business, SAP India, in interaction with Madan Ramvenkatesh of CIOL discussed the importance and focus of SAP on the SME segment. He also threw some light on opportunities and challenges faced by SMEs in gaining greater market share and business dominance.

CIOL: How has SAP understood the SME segment?

Priyadarshi Mohapatra(PM): Indian Small and Medium Enterprises (SMEs) is a vast, emerging market. We believe that especially in today's economic climate, entrepreneurs and small to midsize businesses make up the backbone of the economy. They have the ability to drive innovation, job creation and economic stability. SAP understands the needs of entrepreneurs and small to midsize businesses, and our dedicated portfolio of business software offers them the best practices, flexibility and versatility which they need to adapt, innovate their business model, grow effectively and profitably and, ultimately, become better-run businesses. SAP's portfolio of SME solutions, which include SAP Business One, SAP Business By Design, SAP Business All-in-One, fit the unique needs of small businesses and midsized enterprises. We completely understand the requirements of SMEs and work towards their needs.

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CIOL: Tell us about SAP Business One.

PM: SAP aims to empower growing SMEs by helping them adapt to brand new innovations, technologies and other processes. SAP Business One is a single integrated solution that helps manage small businesses successfully. Businesses need robust and efficient IT infrastructure to improve scalability and operational efficiency. SAP offers a portfolio that addresses the various needs of SMEs, while keeping in view finance and credit issues. SAP Business One is an affordable single application that integrates core business functions across company, including financial sales customer relationship management inventory and operations. It offers essential business functions in Financial management, warehouse and production management, customer relationship management, purchasing, mobility, business intelligence and analytics powered by SAP HANA.

CIOL: SAP's view on the growth of SMEs business?

PM: The EIU survey is quite surprisingly happy regarding few outcomes. It says the SMEs expect to support growth plans by hiring additional staff. Of those surveyed, 94 percent stated that revenues remained flat or increased over the last three years. Over 28 percent reported increases of more than 10 percent and 39 percent responded with up to 10 percent growth. Looking ahead, 96 percent of respondents expect either a flat or positive revenue development over the next 12 months. SMEs businesses are expected to grow more eventually.

CIOL: According to you, what are SMEs lacking these days?

PM: Most SMEs need easier access to new or modern technologies abroad, technology support facilities and easier access to finance, including technology finance. The government should also make some easy policies. There should be some easy access of funds from the government. The SME exchange policy should be more simple and transparent. SMEs with limited IT resources should pay close attention to the evolution of business by various available business solutions and designs. Another important sector is the export for SMEs. They should get the exposure for the global market to make their products and services available to the world.

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CIOL: The latest EIU survey, what are the key findings of this ?

PM: The Economist Intelligence Unit (EIU) survey provides information on what the national, regional and local authorities are offering as support to micro, small and medium-sized businesses. It also promotes entrepreneurship so that more people, and in particular younger ones, seriously consider entrepreneurship as a career option; it gives recognition to entrepreneurs for their contribution to Europe's welfare, jobs, innovation and competitiveness.

The key findings of the survey include:

Government support crucial for growth: SME executives indicate the most significant obstacle in the external business environment is government bureaucracy and regulation - 88 percent cite this as an obstacle. The growing tax burden is also a significant concern (85 percent). Executives in emerging markets are more likely to cite government or legislative issues as an obstacle than those in developed

countries.

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Sales and earnings top business priority: Growing sales and earnings is cited as a top priority by 60 percent of smaller companies and 47 percent of midsize companies.

Obstacles to growth: According to respondents, the three main internal obstacles to growth were finding and keeping new customers (79 percent), hiring and retaining people with the right skills (78 percent) and operating the business efficiently (76 percent).

Internationalization: The biggest business opportunity cited by respondents is expansion into new markets or expansion of the markets themselves, especially high-growth markets such as China and Brazil. Sixty percent of respondents agree that they need to compete in more

international markets.

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Leveraging IT critical in emerging countries: Becoming more efficient and using technology more effectively over the next year is among the top three priorities of those surveyed. Forty-six percent cited using technology more effectively as a business priority. In emerging countries this is especially important with India (72 percent), Brazil (75 percent), Russia (33 percent), China (44 percent) and Mexico (33 percent). Accordingly, 60 percent of respondents say they are automating more tasks and functions now than three years ago.

Difficulty accessing capital: Fifty-six percent of executives say they have become more concerned about debt in the past three years and 46 percent say they have become more worried about access to financing. Executives in emerging markets are more likely than those than in developed markets to cite these concerns. Among smaller companies, 34 percent say limited access to financing is a major obstacle, while among midsize companies, the figure is 23 percent.

Steps to grow the business: The measures that SMEs are taking to exploit their business opportunities include securing new financing (40 percent), hiring outside experts (33 percent), gathering information and market data (31 percent) and increasing or redirecting spending on training (31 percent).

CIOL: Security threats, another major issue to be focused in SMEs. What is your take on this?

PM: Technology is one of the important factors in which the business has to get upgraded and move on with the world. With the evolution of SMEs, there is a growing need for adoption of newer technologies to reach the customer needs and ensure their effectiveness in business. Though the SME market in India has evolved to IT adaptation, however, there are still a large section of SMEs that is adhering to few issues such as data storage, security threats etc, Information security is another

global issue, no matter the size of business.

SAP has a total solution for such issues in SMBs. In India, SAP has completed over 16 years of operation and has grown significantly in the last few years. The company has over 4900 customers in India, of which 3850 are SMEs. We completely take care of all the issues and troubleshoot it and make sure the organization doesn't get affected but such issues. SAP helps SMEs execute their processes with confidence.

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