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While Oracle and SAP slug it out between themselves on who is the biggest Enterprise Resource Planning (ERP) player, several smaller players are taking advantage of domain knowledge to become successful niche players.

The share of such companies may be miniscule, but when it comes to certain sectors, they know their job well and have the full confidence of their customers.

Playing the domain expertise card

"The biggest advantage a niche player brings in is understanding of the nuances of the industry. Some domain-specific issues may appear minor, but they are critical to the business of the client and cannot be addressed by large ERP players," says Yogendra Tripathi, Senior Vice-President and Country Head of Artech India Ltd, which offers an ERP package for the cement industry.

Being niche players makes companies like Artech offer competitive prices coupled with better service and sensitisation to the customer's needs.

"Our package, CemERP, covers the entire spectrum of the cement manufacturers' needs. We have the expertise to further fine-tune and adapt the package as per the client's needs, something that the larger ERP players are unable to do," says Tripathi.

Positive Solutions Ltd, a Web-based technologies solutions provider in Hyderabad, has developed an ERP solution for seed producers. The ERP package, `Planagrow', will help seed companies to cut down on data redundancy and achieve consistency in information at various stages.

Claimed to be the first-of-its-kind package for the seed industry, Planagrow helps reduce communication costs for such companies. "As a result of regular and constant flow of information, companies will be in a position to know the stock position. Everyone in the network could have access to information. The ERP package comprises 10 modules that we have developed after understanding the working of the seed firms and their needs," the company CEO, Bhagwan V.R.S Gorti, says.

Seed companies in Andhra Pradesh are showing keen interest in utilising the potential of the ERP package, the company claims. The package is a restructured version from PIERS — Positive Intelligent Enterprise Reporting System — which is the company's generic ERP package, Gorti says.

In another instance of a niche ERP player, 3i Infotech recently announced the acquisition of FormulaWare, a US-based software company, which provides ERP solutions for the process manufacturing industry, with special emphasis on the chemical and paint segments.

FormulaWare is claimed to have over 25 years of experience in providing business management software to clients. Through its flagship product, Product Formulation Manufacturing (PFM), FormulaWare combines state-of-the-art database technology with advanced software designed to meet the specific requirements of manufacturers of formulated products.

`Flexibility is big advantage'

The niche advantage views are echoed by a senior executive of Appulse, a subsidiary of Pricer AB of Sweden, that specialises in the retail sphere. Appulse works with some of the largest retail chains in the world and has an outsourcing centre in Gurgaon.

"Our biggest advantage is flexibility and a greater understanding of client needs. We follow the engagement model with our clients and can offer offshoring capability on a much smaller scale," says the Appulse official.

Another key factor that distinguishes companies such as Artech and Appulse from Oracle and SAP is their ability to carry out process re-engineering. Using their domain expertise, a product can be modified and updated in a much shorter time-frame.

"We can integrate systems across different geographies and offer tremendous flexibility in terms of scale. As the client grows, we too can ramp up our operations," he says.

What the big daddies say

The big daddies, Oracle and SAP, see both merit and pitfalls in such an approach. "Industry-specific functionality is very important. Yet, there are aspects that remain the same in every enterprise. When you are working across sectors, cross pollination happens, and ideas and best practices can be shared across different industries," says Oracle India Senior Director, Satinder Grover.

To illustrate, Grover says, financial management, procurement, inventory management, human resource management, logistics, and so on, are common across all organisations. What changes is the domain knowledge required to adapt the products to specific industries and companies.

But working across industry segments makes the applications so rich that they can be used across the spectrum by mixing and matching to produce niche products that are more whole.

"Two years ago, there was no specific product that could address the BPO market. Now we have it. We constantly identify new trends and then develop products that address emerging sectors through collaborative research and product development," says Grover.

The larger players take care to ensure that their teams keep abreast with the latest information on their specific industry. "Customer-facing teams are organised around industries - you are not visiting a Maruti in the morning and a Mother Dairy in the evening. That helps us get the best of both worlds," he says.

For the niche players, Grover says, it is important that the ERP vendor covers a large chunk of its market. "A vendor implementing ERP for two companies in Aurangabad is not a true niche player. The niche player should be addressing the global market. If you notice, all our recent acquisitions reflect this belief and were niche players at the global level," he says.

SAP agrees - on this issue

SAP, the current market leader in ERP, agrees with Oracle on at least that one thing. "Our strategy involves developing tailor-made products for specific industries. We work in 29 broad verticals and sub-verticals in each sector. For example, auto as a vertical has three clear sub-divisions - Original Equipment Manufacturers (OEMs), Sales, and Component Manufacturers.

"We configure the ERP package for every company so that the system looks like their own," says SAP India's Director, Sales (Small and Medium Business), Srinivas Rao.

In addition, SAP works very closely with its partners in understanding specific domains. "Through mySAP, we bring in best practices. Our partners understand SAP, industry and the customer company. Together, we pre-configure the system. That brings down cost by 30 per cent and time by nearly 40 per cent," Rao says.

Giving specific examples, Rao says that in one case, the company's partner took mySAP, added a Point of Sale (POS) component that SAP does not have, and implemented the complete package for a retail company.

Similarly, for SAP's engineering and construction product, the partner helps fill in the gaps by addressing specific requirements such as cost per sq.ft that the clients need.

When it comes to cost...

On the cost advantage of niche players, Rao admits that it is not always possible for an Oracle or SAP to cater to a very small customer who is just starting out.

"Whether you implement ERP or not depends on your need. A very small company that is just starting out may not be ready for ERP yet as the key decisions are taken by the senior management. For them, any common software that help keep record of transactions will work just fine," he says.

A real ERP, on the other hand, means that the client is actually doing business on the system. Through the ERP package, the customer company can analyse each transaction, check up if the job can be carried out, take stock of the inventory and even check the worthiness of the customer based on past experience.

The minimum cost of implementing SAP is about Rs 25 lakh.

Of late, SAP has addressed small customers who do not need the full functionality and brought down the barrier to Rs 10 lakh for basic features. But even that, he admits, may be on the higher side for several customers.

Filling in that gap is the business of the smaller ERP vendors.

eworld@thehindu.co.in

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