Introduction
An enterprise resources planning (ERP) solution allows companies
to integrate their business transactions across the organization. ERP software enables
both upstream (vendors) and downstream (customers) integration. This helps the
organization to manage their inventory, reduce customer and vendor disputes,
reduce working capital requirements, and quickly and accurately report on their
financial position to the shareholders.
This article starts off with a focus on the ERP market in India
covering the local historical growth in ERP investments starting from around
2012. Since GST has become a critical requirement in India, we look at what GST
features must be available in an ERP solution. Next we take a quick look at the
trends in the ERP market in India for 2018 and beyond.
Finally we have an overview of the Epicor ERP solution and how it
can help companies in India become competitive.
Obtaining the latest
data relating to the ERP market in India has been a challenge. To overcome it,
I have tried to factor in the data covering the last five years starting from
2012.
The ERP market in India
According to a study by Appsruntheworld.com worldwide the ERP
applications market (including cloud based ERP) is projected to reach$84.1
billion by 2021. This will include licenses, subscription, and maintenance revenues.
New license revenue will account for about 50% of this. Cloud applications will
show a robust growth of about 8% CAGR from 2016 to 2021, from $17.6 billion to
$25.9 billion.
As per estimates by Gartner, the enterprise application spending
in India (including ERP) will reach$2.39 billion in 2017. According to
Infoholic Research, the cloud ERP market in India was valued at $97.8 million in
2015 and is expected to grow at a CAGR of 25.4% between 2015 and 2020. While
this is still a small percentage of the overall ERP market in India, it is
growing at a terrific pace, mostly driven by Government initiatives and
SMEs.
Among the SME sector, automotive, engineering, manufacturing, steel
and consumer durables have shown a very high penetration of ERP solutions.
These industries could represent significant potential in the coming years.
SAP, Oracle, and Microsoft continue to be the key players in the
ERP market in India. However, the market is very competitive with players
including Epicor, Tally, Sage, and Ramco competing for the customer pie. In
addition, there is a strong appetite for low cost, open source ERP software,
especially in the SME segment. In this segment, cost and customer support
continue to be the key factors in the purchasing decision. In addition,
availability of cloud offering could become a shortlist criteria.
Critical drivers for the ERP purchase
There are multiple drivers for organizations to turn to ERP
solutions. Firstly, companies are turning to ERP solutions to improve their
operating efficiency and integrate various application silos. Secondly, to
catch up with competition who has achieved a quick ROI on their ERP investments.
Thirdly, to increase shareholder value. Markets tend to value companies that
use ERP applications higher than those that are not. Fourthly, in recent times,
the lower cost of moving to cloud ERP is becoming an attractive option for many
companies, especially the SME segment.
GST support
The immediate challenge in India (and hence the critical purchase
criteria for 2018 and beyond) is how an ERP application supports GST
requirements. The following are the broad business functionalities relating to
GST that any ERP application should handle.
1. Configuration flexibility—the application should handle the
critical configurations related to GST including different taxes, rates, HSN
(Harmonized System of Nomenclature: An International Product Naming Convention
developed by World Customs Organization) codes etc.
2. Seamless transactions—the transactions should easily capture
GST related information and calculate the tax impact accurately
3. Versatile reporting—including internal transaction reports,
reconciliation reports, external statutory reports, and historical and
exception reports
4. Intuitive accounting including GST Receivables/Payable/Paid
accounting
5. Integration with the GST portal for GSTR uploads
(https://gst.gov.in)
6. Quick and accurate input for credit calculations
7. End to end integration including inventory valuation and
financial reporting
Receiving high quality proactive support from the application
vendor via patches that are released to handle statutory changes will be a key
differentiator.
ERP trends for 2018 and beyond
1. Core ERP solution: India is still an under penetrated market
when it comes to ERP. Significant potential exists in the SME segment for core
ERP applications to handle inventory management, production scheduling, and
order fulfilment. However, in this market, simplicity and ease of use are the
top critical success factors.
2. SaaS: The SaaS (cloud) ERP market in India is still in its
infancy. The model is still hybrid, with core applications being on-premise and
satellite applications like HCM, CRM, procurement etc. in the cloud. The cloud
market in India will be dominated by existing on-premises customers who want to
expand to the cloud while new customers could be predominantly SMEs. According
to research
done by Infoholic Research, the cloud ERP market in India, which stood at
$98 Million in 2015 is expected to grow at a CAGR of 25.4% from 2015 to
2020. A complex taxation system and data security issues remain the major
bottlenecks for full fledged cloud adoption in India.
3. Analytics: Getting ERP solutions to support strategic decision
making remains a challenge in India. For most customers their ERP system still
remains as an excellent OLTP (Online Transaction Processing) system. The focus
will shift from descriptive and diagnostic analytics to predictive analytics that
can anticipate potential challenges. More companies will use analytics to
achieve continuous process improvements.
4. Warehouse and logistics: With the advent of GST, companies will
need to look differently at their warehouse and logistics operations. The trend
will be to wind down their extensive and complex inter-state operations and
move to logistics service providers. This will call for investment in warehouse
and transportation management solutions. The companies that can provide simple
cloud solutions will have the first mover advantage.
5. Mobility: ERP on the go, mobile first and mobile only will be
the mantras going forward. Using ERP systems on mobile phones and tablets
will become the de facto features. Mobile will move from being used for
notification and approval to end-to-end transactions and reporting.
6. Internet of Things (IoT): Companies will start focusing on
integrating their ERP systems with IoT. The manufacturing sector will lead the
demand and will use IoT for materials and spares planning as a first step. This
opens the market for ERP products with embedded IoT features.
About Epicor ERP
Epicor Software Corporation (www.epicor.com) is a leading global ERP
vendor that has been providing best of breed, industry-specific ERP solutions
for over 45 years. Globally the company operates in over 150 countries and
has more than 20,000 customers worldwide. In India, the company has aggressive
plans. Epicor recently partnered with Redington India to focus on the
manufacturing industry and capitalize on the opportunities created by the ‘Make
in India’ and ‘Digital India’ programs.
As per the Top 10 ERP Systems Report 2017 by Panorama Consulting, Epicor is considered a leading ERP solution for the mid-market segment. It is ranked three for ‘ERP System Functional Score (Breadth of functionality)’ and two for the ‘Time to realize business benefits’. At 3.4% market share, it takes the fifth position in terms of market share in the report
The powerful electronic compliance engines embedded in the Epicor applications enable companies in India to quickly and seamlessly deliver the statutory reports related to GST. The application also enables direct interface with the GST portal to upload and download reports.
As per the Top 10 ERP Systems Report 2017 by Panorama Consulting, Epicor is considered a leading ERP solution for the mid-market segment. It is ranked three for ‘ERP System Functional Score (Breadth of functionality)’ and two for the ‘Time to realize business benefits’. At 3.4% market share, it takes the fifth position in terms of market share in the report
The powerful electronic compliance engines embedded in the Epicor applications enable companies in India to quickly and seamlessly deliver the statutory reports related to GST. The application also enables direct interface with the GST portal to upload and download reports.
 |
| Epicor Electronic Compliance Engine |
The compliance engine allows content to be delivered dynamically as and when needed. This, in turn, enables the customer to be future ready today.
Epicor solutions are designed around the unique operational needs
of each industry and are available in the cloud, hosted, or on premises. They
help customers to better manage business complexity and focus on core growth
activities. Epicor solutions support the smallest start-up to the largest
multinational, as well as the differing complexities in specific
industries. With multitude of deployment options, Epicor is well suited to
meet the needs of the customer.
Epicor solutions deliver the choice, flexibility,
and agility needed to support strategic initiatives and remove redundant
processes. The Epicor ERP system offers a modular approach with robust
capabilities focused on reducing costs, streamlining processes, and improving
customer responsiveness across the enterprise—all top priorities toward
achieving continued growth and profitability.
Epicor provides tailor made ERP solutions for manufacturing,
distribution, retail, and services industries. The end to end integrated
applications cover business functions including procurement, inventory
management, manufacturing, order fulfilment, financials, budgeting, costing,
accounting, and financial reporting.
By implementing a global ERP solution such as Epicor ERP customers
can take advantage of modern technologies like artificial intelligence (AI),
data analytics, predictive analytics, robotics, Internet of Things (IoT),
augmented reality (AR) and others. These technologies can help customers
improve their business performance as well as support future growth.
The Epicor ERP solution comes with a single line of code which
means that the cloud and on-premises versions are same so the customer doesn’t
have to go through a cumbersome time consuming migration process if they decide to switch from one
option to the other.
Note: This article is sponsored by Epicor. The information
in the related section is provided by the company. All the remaining information is culled from publicly available information in the web, the links to which are mentioned in the 'References' section below. I do not have any special
relation with the company and am not endorsing the ERP product in anyway. This
blog continues to be application agnostic.
References
14. Top 10 ERP 2017
4 comments:
Good article VKR.😊
Very good one Ram.
ERP Software market in India steadily growing for the last few years. This growth has been across industry verticals in the manufacturing, retail, services, communication and information technology sectors.
Nice blog
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