The Hindu Business Line : Ramco Systems to invest Rs 90 cr in Chennai centre

Chennai, Feb. 29 Ramco Systems will invest around Rs 90 crore in a new software development centre in the heart of the city. The centre (in 22 grounds) will be ready in the next 18-24 months and can accommodate around 2,000 employees, Mr P.R. Venketrama Raja, Vice Chairman, Ramco, said.

The Chennai-based IT company recently sold part of its building to its parent, Ramco Group, for Rs 43.22 crore. This amount will be used to fund the new centre, he told Business Line.

Profitable

The year 2008-09 will see Ramco Systems turning profitable. The recently-launched full fledged software-as-a-service ERP (enterprise resource planning) will enable the company to have better results from next year. “This year itself the negative [results] will be far less than last year, and we can even breakeven,” he said.

Mr Raja said cash flow for Ramco will turn positive in the next six to seven months. “For the first time, a new business model will make the company profitable, thanks to ‘Ramco OnDemand ERP.’

The new solution enables clients to subscribe for a software module on a monthly fee. It takes care of all IT infrastructure, maintenance and support needs. For instance, a small automotive component company need not buy the entire ERP package. Instead, it can begin with a finance module and extend to purchase, sales and inventory management depending up on the growth.

In the next 18 months, Ramco expects to have around 10,000 users for the new product. This will bring in revenues of around Rs 6.5 crore every month. Following a soft launch earlier, Ramco’s OnDemand ERP has won around 1,000 users across multiple verticals, including auto components, trading, distilleries, electronics, textiles and chemicals, he said.

More partners

Mr Kamesh Ramamoorthy, Chief Operating Officer, Ramco, said the company needed to have around 500 partners in the next three years to take the new solution across the country. The company currently has around 50 partners, who have been working with the company for a long time. “We are signing two deals every week for the new solution.”

Switching

Mr Raja said the new solution offered clients a compelling reason to switch over from the traditional ERP systems that have been plagued by non-availability of skilled resources; long implementation time and huge upfront investment. Ramco’s OnDemand ERP takes care of all these by providing software, hardware and also maintenance support. Clients can focus on growing their business and stop worrying about managing an ERP, he said.

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