Small business to witness 21% growth in ERP spending this year
KOLKATA, India--Small and medium businesses (SMBs, or companies with up to 999 employees) in India are on track to spend US$37 million on ERP (enterprise resource planning) solutions this year. Much of the impetus for this growth comes from SBs (small businesses, or companies with up to 99 employees), according to a recent study conducted by New York-based Access Markets International (AMI) Partners.
“SMBs, especially price-conscious SBs, who now can afford branded ERP solutions, are benefiting from a price war in the ERP space in India,” says Partha Sarathi Sengupta, Senior Analyst at AMI Partners. “This push by SBs will help India’s ERP market take off over the next three years. Most MBs (medium businesses or companies between 100 and 999 employees) in India have witnessed higher ERP adoption in the last couple of years.”
As it stands now, the ERP market in the large enterprises space in India is stagnating. So ERP vendors are shifting all their focus on SMBs. India’s ERP space for SMBs was once dominated by a multitude of small players. That is now being challenged by giants like SAP, Microsoft, Oracle, and others. “The large ERP vendors are now interested in volume business and have tailored their strategies to the special needs of the SMB market,” Mr. Sengupta says.
Although local ERP vendors understand the special requirements of Indian SMBs, it’s difficult for them to evolve their products quickly enough compared to the rapidly changing technology and business environment. Larger ERP vendors are cashing in on this shortcoming by lowering end-user prices.
The top five factors that determine the buying decision by Indian SMBs in ERP are the purchase and installation price, ease of implementation and ROI, product flexibility and scalability, functional fit with the SMB’s business process and long-term support, reveals the AMI study.
“Customizing a horizontal application to suit Indian SMB requirements extends implementation time and puts an additional burden on budgets,” Mr. Sengupta says. “SMBs require solutions that give them as much out-of-box functionality as possible so that they can reduce implementation time and costs.” The low cost ERP solutions are by no means the pared down versions of ERP. This gives an opportunity for SMBs to evaluate logically on which of the large ERP vendors best fit their specific operations and SMBs are gaining big.
Related Studies
AMI’s 2006-2007 India Small Business Market Overview and Comprehensive Market Opportunity Assessment and 2006-2007 India Medium Business Market Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet and communications usage and spending. Products and services covered include established and emerging hardware, software, applications and business process solutions. Based on AMI’s annual surveys of SMBs in India, the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.
For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail
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About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence — with a strong focus on global small and medium business (SMB) enterprises and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and “go-to-market” solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets, its annual retainership services based on global SMB tracking surveys in more than 25 countries, and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.
