For SAP India, close to 80 percent of customers in India are SMEs, most which are facilitated by SAP India’s partners, explains Vivek Malhotra, Vice President—Global Channels & General Business, SAP Indian Subcontinent
For SAP India, mid-market has emerged as a key focus business in the last two years. Currently, SAP India has a total of 9,000 customers in India. Close to 80 percent of customers in India are SMEs, most which are facilitated by SAP India’s partners. As part of the channel strategy expansion plans, the company is on track to achieve 100 percent partner-led go-to-market strategy for its SME business. The renewed channel partner strategy is centered around consistent partner profitability and is designed to help them grow their business sustainably. To further strengthen this line of business. SAP India has introduced a slew of changes such as partner packaging factory, removal of distribution layer and faster implementation ready solution for the mid-market.
“We have been adding huge numbers of customers every year. In the list of 9,000 customers, the majority of them were added in 2017. Primarily, 2017 was an interesting year, as we entered the year after the demonetization and GST were getting to be rolled out. But the business started seeing momentum sometime in the mid of July 2017 and we saw a significant amount of momentum coming back in the market,” opines Vivek Malhotra, Vice President — Global Channels & General Business, SAP Indian Subcontinent.
The company feels that as the SMEs in India aspire to become enterprises, it is important for companies like SAP to start focusing on this segment. “From an SMB perspective, our philosophy right from the beginning has been that we will focus on this market through channels. As an organization, we used to be known for going direct and do business direct, but we changed this outlook for SMBs completely. At this point of time, upwards of 90 percent of the business we do is through channels. I would aspire to become 100 per cent.,” he continues.
The company has added 14 new locations and for the first time, it has started taking serious efforts in building the channel base beyond major metros, which will help in going close to the MSME market. “Our geo-expansion plan to reach deeper into the country where MSMEs operate will be led by our extensive partner network. The primary driver of this strategy is our partner program, SAP PartnerEdge, which gives them everything they need to build and grow a successful SAP business Additionally, we also offer Market Development Funds to enable our partners to promote themselves as well as for marketing demand-generation activities. To boost profitability by leveraging the latest opportunities offered by the market, we provide our partner’s tools, resources, and training,” states Malhotra.
Moved from tier 2 to single layer model
The one big change SAP did to its distribution model in September last year was to do away with old distribution model and get into a single tier model. The company graduated all its traditional EBMs to VARs business. Even the company removed its old-time distributor Sonata Software from a distributor to the VAR category. Now all the
VARs will be working directly with SAP channel team. Without putting additional on ground resources, the company empowered more its VARs for its geo-expansion strategy.
“We are very sensitive to our partners and their requirements. We will continue to invest in channels for their success. In line with this, we have recently fortified our policies to strengthen the risk and compliance processes in our business through partners. For this, we will be migrating our EBM partners to VAR partners based on the partner request, their business plan and other processes meeting SAP requirements. We are already seeing significant numbers of EBM partners migrate as per the new model. Sonata has been a fantastic MVAR for SAP until last year. We will continue this partnership with Sonata as a VAR partner,” explains Malhotra.
He further states, “We know what the top priorities for our partners are — business growth, cost reductions, improving efficiency, productivity and customer loyalty. Our robust partner strategy is geared towards these priorities and is designed to enable them to grow their business sustainably.”
Partner Packaging Factory: A new format
SAP has introduced a new business format for its channel named- Partner Packaging Factory an industry-first online initiative that aggregates end-to-end SAP packages developed by partners. These packages are built to include SAP software, services, maintenance in addition to hardware.
SAP Partner Packaging Factories includes solutions for- SAP S/4HANA, SAP Cloud, BusinessObjects Business Intelligence and SAP Analytics Cloud. This initiative creates unique opportunities for partners to reinvent business models, drive volumes and enhanced revenues. It will give a two-fold advantage to customers: it would have ready-made solutions which are templatized and in addition, it will allow faster implementation.
It is an industry-first online initiative that aggregates end-to-end SAP packages developed by partners. It thus provides them an opportunity to set up a one-stop shop for our customers who can easily evaluate SAP solutions and fast-track their digital transformation journey. By building packages to include SAP software, services, maintenance in addition to hardware, it enables them to offer a combination of self-service assets and best practices
“10 -15 years back, SAP solutions used to take a longer duration of implementation time. Today we are talking about getting a partner, starting the implementation and winding it up within 90-120 days for SMEs customers. One of the main criteria for selection of partners for this initiative is successful implementations in specific industries and industry sub-segments. What we focus on more are their industry-expertise as well as on the replicability of those solutions. Those solutions, while could be industry-specific, should be deployed for all customers, irrespective of their geography,” he says.
Malhotra adds, “Our partner network is a key component in our efforts to simplify our customers’ technology landscapes and improve the lives of people everywhere. This community is also crucial to the success of our customers and we are fully committed to their growth. The SAP Partner Packaging Factory is an extension of that very commitment. It provides unique opportunities to our partners to reinvent business models, drive volumes and enhance revenues. Our clear partner strategy continues to propel our objective of growing together.”
Tapping the MSMEs with collaboration
To be successful, today’s growing businesses are required to manage their increasing data in an effective way. The ability to extract intelligence from information is increasingly being seen as a key differentiator to grow and expand. SMBs are therefore being innovative and are embracing technology in order to improve their business, to reach out to new markets and to create new revenue streams. An example of this is SMEs increasingly moving toward cloud-based ERP. This move and the digitization of the enterprise are being fueled by the better use of enterprise data derived from operations and third-party big data. To succeed, SMBs have to make the right investments to digitally enable all aspects of the business, including how they engage with customers at every touch point.
SAP India has also launched Bharat ERP in collaboration with the Ministry of Micro, Small and Medium Enterprises (M/o MSME) to empower MSMEs with next-gen technology to fuel their digital journey. The initiative aims to digitally enable nearly 30,000 MSMEs and youth in the next three years as the program expands. “Through this program, MSMEs will be able to access cutting-edge next-generation technology from SAP that can streamline and integrate key processes such as financial, sales, inventory, and more – with a single business software,” Malhotra concludes.
We are very sensitive to our partners and their requirements and we will continue to invest in channels for their success