OF Sap Erp Solutions in Ahmedabad": "Study of Market Potential
OF Sap Erp Solutions in Ahmedabad": "Study of Market Potential
Ahmedabad region
A Grand Project Report Submitted in Partial Fulfillment of award of MBA Degree Submitted by Mr.Chetan Savalgi Roll No-16 Ms.Urvi Raval Roll No-67
Project Guides Prof. Prakash Chawla (Internal) Mr. Sandipan Kar (External) Vice President., Vanguard Technologies (India) Ltd
EXECUTIVE SUMMARY
This research has been undertaken for Vanguard Technologies (India) Ltd. for Ahmedabad region. In the existing competitive business environment any organization would like to assess its position, its future potential with respect to its industry and also with reference to the type of services it provides with in the industry. The sponsor has initiated this study in this direction. The study sets out with an objective of assessing the market potential of SAP ERP solutions. The sponsor company happens to be a SAP Business Partner providing SAP services in Gujarat. The company wanted to know the potential existing in Ahmedabad region thru this study. The source of data for the study, are the responses given by the participant companies thru personal interviews. The findings have been provided in tabulated format along with graphical representation wherever necessary. The findings of the study have been analyzed extensively thru various Analytical models like the following, Porters Five Forces Model SWOT Analysis of the Sponsor Company ERP Potential Pyramid BCG Matrix The study is concluded by grading the areas of market potential in order of high to low, in the region along with providing the sponsor company with list of prospective companies with their related details. The companies are classified into the high, medium, low market potential categories.
INDUSTRY PROFILE
VARIOUS IT AREAS A huge potential of trained IT manpower exists in India itself, and also around the globe. IDC estimates that India is positioned in the No. 2 slot worldwide in terms of the fastest growing IT market in the world, with the Indian IT companies revenues to grow to $12 billion by 2005. By 2005, says IDC, Indias IT sector would employ 11.82 lacs people. ITcould be divided into the IT industry, the IT-user industry, or the IT enabled services industry. As part of an IT organization, you will build software solutions or create infrastructure, or be a part of the maintenance team. The IT-user industry is broad enough to cover the rest of the industries as practically every industry is gearing itself towards IT-enablement. It uses the software and infrastructure created by the IT industry. Next to these two is the ITES sector; services that are essential but can be outsourced. It uses IT for increased efficiency, productivity, and to utilize resources optimally. Examples would be customer support services like call centers, sales support, back office support, huge opportunities in Business Process outsourcing etc.
The IT-enabled Services industry (ITES) The IT enabled services industry comprises the essential but outsourceable services like customer support, data processing etc. It is emerging as a major business opportunity for the export oriented IT software and services segment. The industry includes human-intensive services that are delivered over telecom networks or the Internet to a range of business segments and verticals. ITES grew to nearly Rs. 7,100 crore (US 1.5 billion) in 2001-02 and currently employs around 107,000 personnel. According to a Nascom-McKinsey Study, the ITES segment will generate job opportunities for over 1.1 million Indians and a revenue potential of Rs. 81,000 crore.
Figure - ITES Business Process Outsourcing (BPO) With the current focus on core business capabilities, many companies are outsourcing select business functions to expert partners who can perform them more efficiently and cost-effectively. BPO takes a set of activities and takes on the responsibility of reengineering the entire way the operation is done. A step beyond IT outsourcing, business process outsourcing includes such functions as claims processing, invoicing, payroll and customer support. A BPO vendor manages people and processes. Outsourcing may be required in different spheres like Finance, Health, Accounting, Human Resources of companies, etc. With skills in IT and knowledge of how businesses and processes function in organizations, strategic advantage could be achieved. The prospects are immense as BPO is the thing of the
future, simply because it accelerates a companys ability to compete in the market even in areas where it does not possess much expertise. Call Centres - It is an ever-growing segment of the ITES sector, the most happening. It has immense potential to generate the maximum number of jobs in the ITES segment. Call centers look out for those with good communication skills, are fluent in English, and have the much-needed poise and confidence. Back office operations, Data entry, Data conversion are also different facets of the ITES segment. Verticals such as banks and aviation require large-scale data processing and data based decision-making capabilities. Raw data and or paper documents are sent to remote locations (IT-enabled destination) where data entry and necessary reconciliation is carried out. Medical transcriptions involve the transcribing of medical records from audio format or dictated by doctors or other healthcare processionals into either a hard copy or electronic format. Doctors overseas record their findings into a Dictaphone or any other such device and the sound tracks are transferred through datacom links to ITES companies specializing in this area. Opportunities exist. IT will employ 11.82 lacs people by 2005. The IT arena is yours for the taking. Decide your leanings, engineer your skills and choose your pick.
Figure Dimensions of the User-industry sector IT has become an all-pervasive, ubiquitous feature in our daily existence, leaving no place untouched, no stone unturned. Whatever their size, all industries are looking to make IT an integral part. Therefore, there exists immense demand here. As more industries are bitten by the IT-bug, they will look to customize the available products to suit their requirements, leading to an increase in demand for trained professionals. Another factor to notice is that the field of IT is becoming more specialized, with greater emphasis on domain-specific skills. Manufacturing in the Internet era, manufacturing industries today confront a highly dynamic and interactive business environment. Traditional industries delivering manufactured goods need to respond quickly to changing consumer needs, while streamlining their processes. It is important to effectively manage the flow of information across key operational interfaces. IT assists by manufacturing dedicated software products, solutions and services for manufacturing and process industries. Retailing is another subset of the manufacturing industry. Improved means of communication has truly made the world a global village. Large retailers today opt for global sourcing and joint product development. Technology helps them with computerization of procurement, assortment planning, distribution and merchandising. The complete retail process is today automated, with the widespread use of technologies like Enterprise Resource Planning (ERP), Enterprise Application Integration (EAI), software packages for specific functions, and enabling
technologies like Asynchronous Transfer Mode (ATM) for data sharing and smart cards. IT professionals help them leverage technology to maintain their stronghold. Telecom Telecom companies throughout the globe have adapted computerization The telecom user is now able to avail of all kinds of communication like voice, data and video, through a single instrument or media. Wireless standards and technologies like WAP, GPRS ensure continuous connectivity, be it online trading or news updates. Design and implement customer-centric business processes for improved customer service, cycle times and costs, and offer expertise in defining customer-focused IT strategies. Banking & Financial services - Internet, wireless technology, and global straight-through processing have created a paradigm shift in the banking industry from brick and mortar banks to banking virtually across time zones. Most banks are IT-enabled, with their systems being computerized. Most companies have also switched onto computerized accounting systems for their stock analysis, payroll preparation, and so on. With Internet trading being a success throughout the globe, the financial sector has been swept by the technology wave. The opportunities are global and so are your challenges. Healthcare The availability of tools and services like Hospital Management Systems that improve diagnosis and treatment, telemedicine with techniques like real time image transfers, and health information through networks have considerably improved the quality of service. IT Solutions provide state-of-the-art, end-to-end healthcare solutions in areas that include hospital/patient management systems and decision support systems. Technology has also increased the requirements for medical transcriptionists, who listen to the recordings, transcribe them and send them back electronically. ERP Solutions ERP or Enterprise Resource Solutions integrates all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs.
Companies use ERP because they need to integrate financial information, customer order information, standardize and speed up manufacturing processes, reduce inventory, and standardize HR information. As part of this industry, you will be assigned a clear role to perform in this whole chain of standardizing and integrating the entire organization, and also the supply-chain management.
FUTURE OF IT INDUSTRY IT Budgets to Increase 7% in 2005 Chief Information Officers (CIOs) in India expect IT budgets to increase by 7 percent in 2005, a significantly higher rate of increase than the 2005 global average of 2.5 percent. According to the global CIO survey by Gartner Executive Programs (EXP), a unit of Gartner Inc, three strong themes have emerged-security and data protection, business continuity and business growth. VP and Research director for Gartner EXP, Andrew Rowsell-Jones says, "One of the top business priorities in India is supporting competitive advantage. Yet the rest of the world ranks this priority behind business process improvement, security and enterprise-wide operating costs." Table 1 - India Top 10 Business Priorities in 2005 India Top 10 CIO Business Overall Priorities Security disruptions Supporting advantage Data protection and privacy Business Improvement Enterprise-wide costs operating Process competitive breaches and Ranking 1 Global Priorities Business Improvement Security disruptions Enterprise-wide costs Supporting advantage Data protection and privacy The need for competitive operating breaches and Process Top 10 Business Overall Ranking 1
2 3
2 3
4 5
4 5
revenue 6
growth Using intelligence in products and services Focus on internal controls Shortage of business skills Faster innovation and cycle times 7 8 9
Increased market competition 8 Business units seeking greater control of IS Enterprise risk management 9
10
10
India CIOs are clearly focused towards building a solid foundation for longer-term performance boost to their enterprise, whereas CIOs in other parts of the world are more concerned with short term results. This ties in with India's strategic management priorityimproving business continuity planning-also ranked more strongly in India than in the rest of the world. As IT becomes more of a foundation for business performance, so that foundation has to be solid to be able to support this responsibility. As per the survey findings, Indian CIO efforts are concentrated on protecting quality of earnings - that is long term reliability - rather than just automating business for the sake of it. For Indian CIOs, if processes are to be automated, it's important that, once they are automated, they've got to be as reliable as possible.
Table 2 - India Top 10 CIO Strategic Management Priorities in 2005 Global Strategic Priorities Delivering projects that enable business growth Linking business and IT Top 10 CIO
India Top 10 CIO Strategic Overall Management Priorities Improving business continuity and readiness Delivering projects that enable business growth Consolidating the IT organization and operations Faster time-to-market for new applications and IT services Linking business and IT strategies and plans Tightening security and privacy safeguards Implementing internal controls in the IS organization and processes Applying metrics to IT Ranking
Management
Overall Ranking
1 2
1 2
strategies and plans Demonstrating the business value of IT Applying Tightening metrics security to IT and
3 4
3 4
organization and services privacy safeguards Improving business continuity and readiness Improving the quality of IT service delivery Consolidating the IT
5 6
5 6
7 8
7 8
organization and services Improving IT governance Demonstrating the business value of IT Source: Gartner EXP (January 2005)
organization and operations Developing leadership in the senior IT team Improving IT governance
9 10
9 10
"They are not only investing in IT to gain competitive advantage for their enterprises, they are also investing in business process improvement initiatives, which will drive up enterprise efficiency. IT is seen as delivering short-term and long-term gains. This is a good news story for IT in India," added Rowsell-Jones. To consolidate these expected gains, Indian CIOs are also focusing on systems security, data protection and privacy. All of which, if done badly, can threaten enterprise business results. According to Gartner there exists in India a solid underpinning on enterprise wide operating costs to ensure business costs don't get out of line. But the rest of the world ranks enterprise-wide operating costs more strongly. However, in India the focus is clearly on the more strategic competitive positioning and longer term growth, rather than the tactical short-term revenue and strong constraints on investment. Indian CIOs share some technology priorities-business intelligence, security enhancement tools and workflow management-with their international counterparts, but surprisingly they rank customer relationship management much higher. But that's because CRM is tied in with their push for competitive advantage and delivering projects that enable business growth.
Table 3 - India Top 10 CIO Technology Priorities in 2005 India Top 10 CIO Overall Ranking 1 Global Top 10 CIO Overall Ranking 1
management (CRM) Security enhancement tools Workflow management deployment and integration Business process integration tools Storage management
2 3 4 5 6
Mobile workforce enablement 3 Workflow management deployment and integration Enterprise resource planning (ERP) upgrades Storage Management Voice and data integration over IP Customer relationship management (CRM) Business process integration tools Server virtualization 4 5 6 7 8
Mobile workforce enablement 7 Voice and data integration over IP Enterprise resource planning (ERP) upgrades Server virtualization 8
9 10
9 10
Source: Gartner EXP (January 2005) Another issue "missing" from the list of Indian CIO top issues, but which ranks strongly internationally, is the need to address a shortage of business skills. It seems that the Indian education system, which has turned IT into a major export earner for the sub-continent, is able to produce the needed numbered of highly skilled highly educated workers that CIOs need. While in the longer term, if expansion continues, this may cease to be the case, it seems that the sun will continue to shine throughout 2005.
Gartner also said that Indian CIOs increasingly expect their responsibility towards non-IT business activities to go up. 'CIOs responsibility for non-IT' is ranked #1 in Business issues for 2008 in India compared to the global ranking of #10. The Indian CIO also shares a much stronger working relationship with the CEO, as the CEO reporting is much higher in India at 62% compared to 41% in rest of world. Another key finding of the CIO survey reveals that many Indian CIOs think the big shift is the strategic use of information in services. This presents a very different profile for the global average in this survey. Among other management issues for 2008 Indian CIOs have rated TQM/Six sigma at #2 while globally it has been rated at #23.
Merchandising In an industry that is sensitive to dynamic market forces, cost fluctuations and manufacturing responsiveness, there are many benefits to be gained from investing in ERP. ERP applications have shifted from assisting after-the-fact monitoring to real-time analysis, control and forecasting; and from facilitating standardization, economies to scale and cost reduction in production, to enabling fast, flexible and accurate response and customization. Merchandising is the planning required to have the right fashion merchandise available in proper quantities and place at the right time and price to meet consumer demand. It involves all the activities vary from company to company, but usually include setting financial goals, budgets, price and costing points, planning line size, fabric purchases, sourcing, scheduling production, controlling product flow and presentation of the line. ERP/SCM application modules and separate IT applications modules and separate IT applications help in a variety of areas. EXAMPLE Style Definition: ERP applications first define all essential information related to each style and then flexible links are used to attach defined sets of colors and sizes. The sets of colors and sizes are unlimited and used for any product requiring up to three variables. ERP modules can integrate style/SKU definitions created from information received via pre-production systems like product data management (PDM). ERP modules can handle a unique product structure. It includes the bill of material, the bill of labor and routing information. With a single simplified product structure per style, any number of style, color, size, dimension combinations can be easily set up and maintained. Once the style product structure is created, the color or size combinations are derived as attributes of the structure. The result is faster set up of styles and a smoother seasonal change over. Product Costing:
Cost products correctly is critical in the fashion industry. ERP supports advanced costing methods, including standard costing, actual costing and activity-based costing, as well as average, FIFO and life inventory evaluation. Additionally, all costing methods and information can be fully integrated with finance. This provides your company with essential financial information for monitoring and controlling costs. Inventory: ERP can be used in multi-national, multi-company, and multi-site manufacturing and distribution environments. The system simplifies complicated logistics by allowing you to plan and manage companies in different countries as a single unit. And, its advanced functionality allows you to process product and financial information flows in several different ways. Entering and managing the basic data required to effectively run your business is an important start for effective warehouse management. The basic data includes warehouses, locations, items, containers, lot and serial numbers, units of measure (including conversion), alias numbers, replacement and substitute items, and more. Allocation techniques let you connect each order line to specific inventory accounting Ids needed to meet delivery requirements for quantities in short supply. Allocation is also necessary to ensure that items with the desired qualities, color, age, etc can be delivered to all of your customers. Inventory reporting supports all reporting of specific and general types of stock transactions, such as various types of stock transfers, re-classifications, ID changes and physical inventory results. Additionally, functions are available for managing different stock and purchase requisitions as well as supporting the selection of appropriate locations for receipts. Inventory valuation involves both warehouse management and cost accounting. ERP supports several valuation methods including standard cost, average cost, FIFO and batchspecific prices. Distribution & Delivery: Delivery and distribution in ERP lets you define logistics processes flexibly and efficiently to deliver the right product from the right warehouse to the right customer at the right time -
everytime. To the customer, the most important element of quality is on-time delivery. It doesn't matter how well a product is made if arrives late. Applications support automatic or manual load planning,transportation planning for in-house vehicles or third party agents, EDI support for transport booking, confirmation and dispatch, and proof of delivery processing. Processing distribution or acquisition orders involves several closely related activities, such as: I Verification and release of planned orders. II Order quotas per delivery when shortages occur. III Transportation planning. IV Picking list release and printout. V Configuration of delivery packages and labelling. VI Transport document printouts. VII Delivery departure and in transport reporting. VIII Receiving processing with quality inspection and put-away. IX Processing and managing variances. E-Commerce: Internet enabled ERP offers Internet, Intranet and Extranet solutions for business to business, business to consumer, employee self-service, and more. For example, apparel, footwear and home fashions manufacturers and distributors can use the Internet to allow their customers to view recent catalogs, check the status of an order, and place catalog orders directly over the Web. Internet enabled capabilities are designed to help companies provide more responsive customer service and forge closer relationships with their suppliers and business partners.
Using EDI and electronic commerce, eliminates unnecessary paperwork in fashion companies. The result, reduced lead times, increased productivity, lowered costs and improved customer service. Electronic communication streamlines and speeds up the supply side of a business. ERP can provide full support for EDI and fax communication with suppliers, including electronically transferred order and receipt information in the supply chain. A Pre-requisite For Survival: The profound effects ERP is having on business as a whole are only just beginning to filter through to the textile and clothing industries. In future, the adoption of ERP systems that integrate internal systems with those of suppliers and customers is likely to become a prerequisite for survival in a fiercely competitive and ever-changing global marketplace. Ecommerce systems, linking trading communities across the globe, are likely to become the norm. In the coming decade, ERP will play a key role in re-shaping the textile and clothing industries and their markets as we know them today. It will help companies identify market segments on a global basis through the greater ease and lower cost of reaching distant customers, capturing information about their specific needs and servicing their requirements. What IT-enable service industry seeks in Budget 2004-05 In the forth coming Budget to be announced soon the IT-enable service industry, expects the government to withdraw the circular on taxation of core services, to ensure proper differentiation between core and non core activities of a company. Commenting of the same, Raman Roy, CEO, WiproSpectramind, said, "The government must take care of this nascent sector. It should not be treated like a subisidaiy of the IT sector. The industry seeks infrastructure support in terms of airport, roads and uninterrupted power supply .
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Company Profile
Introduction: As a focused SAP consulting company, Vanguard Technologies has been extremely successful in supporting clients in meeting the challenges of their companies response to the changing nature of the business & technical environment. Success companies have changed the way they do business to leverage upon the potential more prominent & effective way with efficient information system on SAP platform. We have expertise and experience with years of meaningful experience in various aspects of R/3 in Petrochemicals, Textiles, Pharma, engineering etc. We are partner to SAP India private Limited as well as strategic alliance partners to Implementation SAP partner companies of repute like Digital Global, Infosys, ATOS Origin, EDS etc. We have Implemented under leadership of SAP India, projects like BPCL, ONGC in the Petrochemical sector including helpdesk support for sales and distribution and Basis support to Indo Rama Synthetics Ltd., ICICI, ATOS, and E+L. We had joined with SAP as their Implementation team for Tata Telecoms CRM-BW project,, Kirloskar Brothers Ltd, Cochin Refineries, Coke, Marico Industries and Hindustan Lever Limited s supply chain project. We have provided crucial after-go live support to Arvind Mills, Ahmedabad, Shell UK, Shell France, Mars of Strasbourg France, Phillips of Holland. We participated in Duphar Interfarm for Intelligroup in Jakarta for Implementation project. We are currently engaged by Infosys in prestigious Implementation in USA, Canada and Singapore on various Implementations of prestigious projects like Pearsons (Penguin publications), Eastman Colour, Microsoft, and Dymer Chrysler, Singapore. We are also engaged in maintenance projects of Apple and Intel, which is done from India.
Locally we have been supporting M/s E+L limited, ATE group company, GIPCL, Arvind Mills Limited in after go live support, maintenance, training and report generation work which they are very happy with. We have installed latest mySAP.com at our facilities at Ahmedabad and have the ability to conduct the implementation in the right manner as per the ASAP methodology, a proven Implementation methodology as prescribed by SAP AG. Resources In-house trained, and experienced pool of consulting resources, were made available to the group, which led them to acquire appreciable strengths in IT. Joined subsequently by consultants from the industry with strong basic background and expertise in relevant areas, the skills possessed by its consultants are of rare distinction. Accreditation We are the certified resource partners to SAP India Limited and have the requisite strengths to fulfil the requirements of implementation and consulting in the functional and technical areas of SAP R/3 implementation. We are strategic alliance partners to reputed companies like Infosys, Digital, IBM, ATOS Origin FOR SAP and e commerce initiatives WORLDWIDE. We have been closely working on projects above-mentioned reputed companies. We have by now acquired expertise in IS OIL, Pharmaceuticals, Engineering Industry, and Textiles for the projects we have done and possess consultants who have considerable experience in the other industries as well. Expertise
Infrastructure Vanguard Technologies Operates from 10,000 square feet of fully furnished office premises located in the heart of the city of Ahmedabad It has established Internet connectivity through a dedicated leased line of 64 KBPS It has the installed high performance, high-speed servers and a LAN connection serving the entire office setup with 16 machines supplied by DIGITAL It has installed MS SQL as well as WINDOWS 98., JAVA and all latest software. Areas of business
The company is currently focussing on the following. ERP Implementation and consulting. We have our core strengths in this area of business and the future holds promise for substantial growth in ERP, CRM, SCM and market place. We have done projects with SAP India Limited in fortune 500 companies such as BPCL, ONGC, IOCL, TISCO, etc. Overseas Assignments We have successfully done assignments for NIIT Asia Pacific and RTL Development, UK for their projects in Singapore, Belgium and France. Help Desk. We have successfully managed the help desk for the duration of the contract from EDS for their customers. We have also managed the same very successfully for M/s. Indo Rama at Boti Bori in Maharashtra including their Basis management. We are geared to provide on-shore services for help desk in SD, MM, PP, FI, CO, IS-oil, BASIS and ABAP development. ABAP Development, Enhancements, SAP SRIPTS and Report writing. We have successfully managed the contracts from the following companies in developing ABAP reports for the customers as per the specifications provided to us.
We have also in other cases developed the specifications for the customers after discussions with the users and developed ABAP reports very satisfactorily. 1. Grasim Industries + Clarkston Potomac 2. Schindler 3. Price Water House Coopers 4. Cadila +EDS 5. VANGUARD 6. Arvind Mills 7. Erhardt + Leimer 8. Mars France 9. Celestica, Canada etc. Role Based Training We provide trainings. These trainings help users to learn SAP usage specific to ones role in the user organisation. We offer training to users in, Sales and distribution, Materials Management, Production planning, MRP, Warehouse management, as well as Finance and controls. Partner Academy Training for SAPiant colleges We are regular trainers for the SAPient colleges for the SAP R/3 partner academy courses and the other levels of courses in various modules in various levels including certification. Application Software Development. We are in a position to enter into this area of business using various tools and packages including Java, C, C++, UNIX, oracle, D2K etc in course of time. Growth In course of time we plan to establish our offices in various parts of the world where the market where potential so demands. Immediately we are concentrating on India, Europe, USA and Asia Pacific region.
The company is working very closely with some of the leading systems vendors from across the globe and establishing beneficial strategic alliances and partnerships to accelerate its pace of growth and performance. Customers Vanguard Technologies India Private limited has done prestigious assignments under leadership of SAP including BPCL, IOCL, TATA TELECOM, Cochin refineries, Kirloskar Brothers, etc. and with EDS (A fortune 500 company), Amtrex Hitachi, Arvind Brands, Clarkston Potomac, Indo Rama, ICICI and many others.
Methodology Vanguards approach is fully integrated with SAPs Accelerated SAP methodology. We utilize our rapid application deployment approach for project implementation for the purpose of providing high quality to systems design and implementation within a diminished timeframe. The five phases of our methodology are as follows: This sophisticated product methodology is based on SAP's own ASAP methodology and industry best practices. We always follow a roadmap to project success:
1. Project Preparation Preparation of documentation; buy-in from decision makers and high-level 2. Planning We begin working closely with you from the get-go to make sure that everyone is on the same page and that requirements will be clearly understood.
3. Business Blueprint Will work directly with your business users to ensure its success. Identification of existing business processes in your current business (the "As-Is" model), as well as how new requirements and processes will be implemented under SAP (the "To-Be" model). This is a crucial phase, and it is here that Vanguard 4. Realization The actual configuration and ABAP development required for your SAP system. If the Preparation and Blueprint phases have been completed properly, this should be only a small fraction of the total project time. 5. Final Preparation Testing and Go-Live preparation. This phase ensures the viability and reliability of your implementation. We believe that extensive testing involving our staff and your business users can prevent nearly 100% of problems during the Go-Live phase. 6. Go-Live and Support This phase encompasses Go-Live preparation, cutover and initial support. Not only will we warranty our work and guarantee that your system is working successfully, we'll also provide extensive project documentation. We don't consider a project to be complete until we have provided detailed knowledge transfer to your staff. Experience is the biggest reference! Vanguard Technologies is now approaching a customer with more than 500 man years of Experience, with diversified services on SAP; Ranging from Implementation services to Helpdesk support to the new dimension services like BW, APO & CRM implementation having strong reference in each of the propose area.
What Vanguard has to offer: The right consulting support guaranteed to be available On Call Functional/Technical consultant availability Faster response times to problems Fewer redundant tasks for your staff On-Demand expert guidance Minimized internal staffing commitment In Nutshell Total Sap Solutions Providing Company Strategic IT Consulting Services: Comprehensive IT Assessment Services Development and Implementation of IT Strategies Evaluation of New Technology options Evaluation, Benchmarking and Optimization of Application Systems and IT Services
SAP Assessment Services: Maintenance Assessment Services Off Sourcing Assessment Services Upgrade Assessment Services Business Warehouse Assessment Services
SAP Implementation Services: SAP R/3 Implementation New Dimensional Products Implementation
mySAP Business Information Warehouse mySAP Customer Relationship Management mySAP Supply Chain Management
SAP Testing Services: Onsite Application Testing Services Offshore Application Testing Services
Service features: Remote development: System Monitoring CTS / TMS Administration Performance Monitoring and Tuning Hot Packages and OSS notes Database Administration Job Scheduling and Maintenance Printer and Spool Administration System Landscape Management Solution Pack Hour Functional Support Security Management 24X7 Help Desk Services Backup and Disaster Recovery Plan Upgrade to SAP release 4.x ITS, Webstudio, firewalls configuration Web Enablement Archiving Solutions
Offshore development: Our service allows you to focus on what you do best and helps you gain access to world class resources for SAP-related work (ABAP, conversions, interfaces, custom reports) or traditional application development. We are much more cost effective than in-house development. Upgrade Services:
Convert your custom reports from one SAP release to the new release; upgrade ABAP queries and report writers; upgrade your Z programs and function modules. Enhancement Services: Application development to respond to changing business conditions and new products or marketplaces.
E-Business Services: Web development, testing, implementation, and integration with your back office or ERP system. Help desk: Help Desk Services provide a suite of services that you may chose from. These services range from Remote Technical Management to BASIS support to 24x7 Help Desk support for the user community. These are cost-effective packages that enable you to focus on relevant internal activities. Resolution of application problems so that you can get back to your business and add value to the company; a team of people understanding your company and its service demands. Technical SAP support in the form of Hot Packages, OSS Notes etc.; Change Management and Configuration Control. Workload and performance management with specific tuning recommendations based on your environment, SAP configuration, and business demands. Advanced Services for Archiving, Database Management, Backup, Disaster Recovery Planning, and Upgrades. Application and Development Support: Our service allows you to focus on what you do best and helps you gain access to world class resources for SAP-related work (ABAP, conversions, interfaces, custom reports) or traditional application development. We are much more cost effective than in-house development. BW and Portal Development and implementation Services:
BW Scoping to implementation, Portal development, testing, and integration with existing systems. E-Business Services: Web development, testing, implementation, and integration with your back office or ERP system. SAP upgrades: Vanguard Technologies, a leading SAP Consulting Partner with a proven ability to develop and provide its customers with strategic, cost-effective solutions for SAP R/3 systems, is offering a complete SAP R/3 upgrade service to our customers. Vanguard has the experience; technical expertise and the team necessary to successfully guide your SAP team through a seamless upgrade. There are a variety of factors that can affect the timing, resource requirements and costs of an Upgrade: Numbers of facilities, business units, and users Numbers of custom reports Modifications made to the SAP software during the initial implementation New functionality to be added during the upgrade, e.g. Business Warehouse, Advanced Planning and Optimization, mySAP.com, etc. Changes in business processes
Our experience in SAP R/3 Implementations and Upgrades is unmatched in the industry. Our consultants are recognized experts in the industry, will provide you with knowledgeable answers and insight, and support you through the process of upgrading your SAP R/3 systems to the latest release, 4.6X, or mySAP Learn how we execute a Combined Effort to Leverage your Internal Resources and Vanguards Team to deliver a successful Upgrade.
Supply chain management: Supply chain Management (SCM) enables collaborative network optimization across the extended supply chain, helping companies to work closely with their partners, enhance responsiveness to customer demands and remain competitive. SCM solution provides a company and its supply chain partners with visibility of critical information about inventory levels, orders, product design, forecasts, production plans and other key performance indicators to increase service and reduce inventory carrying costs. SAPs Supply Chain Management solution synchronizes all parts and participants in your extended enterprise. This enables better demand forecasting, vendor management and available-to-promise inventory distribution. Advanced Planner and Optimizer (SAP APO) Supply Chain Cockpit Demand Planning Supply Network Planning & Deployment Production Planning & Detailed Scheduling Global Available-to-Promise
CRM: Internet Sales (e-Catalog, Shopping cart processing, Pricing, Product configuration, Availability and Order management) Catalog and Content management Campaign Management for One-to-One marketing (Trade promotions and product recommendations Pushing content to customers) Tele-Marketing/Tele-Sales Mobile Sales and Customer Interaction Center (Call Center Integration, contact management)
Demand Planning with APO based on demand aggregated from Marketing Campaign Analytics using BW (Customer statistics, intelligence gathering, targeted promotions, sell/cross sell) ATP using APO Payment processing (Billing, credit card) Marketplace integration
Why Vanguard? A Large pool of experienced and skilled resources in India and abroad Rich experience in working in complex and large implementations, which gives our consultants a wide exposure and knowledge of the Best Practices. Certified resource partnership with SAP India A growing knowledge repository built from past experiences helps us provide cost effective solutions to our large customer base. With our reputed clientele and rich variety of projects, we attract the best talent with quality experiences including from the reputed consulting companies. Continuous up gradation of consultants skills to the latest technology helps us provide satisfactory services Close Healthy relationship with SAP helps in immediate knowledge transfer to our consultants who have access to the latest technologies and tools Vanguards proven track record in nurturing and managing relationships with a large number of client and Partner accounts. Partial list of clients: ISOIL Implementations Bharat Petroleum-implementation and Roll out at 179 sites. (India) ONGC (India) Kochin Refinery (India) Shell (UK & France)
Pharmaceuticals Implementations Cadila Pharmaceuticals Combiphar (Indonesia) Textiles Arvind Mills (India) Indo Rama Synthetics . Nahar Spinning (India). S.Kumar (India). Reliance Textiles . Process Industry Meghmani Organics Limited Vazir Sultan Tobacco Automobile Bajaj Auto Discrete Manufacturing Tata Steel (Tisco) Erhardt + Liemer Panasonic (Singapore) Mars Chocolate (France) Utilities Sector Gujarat Power Corporation Arvind Mills Power Plant South African Water Board Telecom Tata Telecom
Mission of Vanguard Technologies is to be a preferred professional services provider offering cost effective tangible solutions for the benefit of our clients competitive advantage & improvement. Our 100% successful projects implementation record of the past will continue as we work with you towards meeting the Challenges you face! Other Contributions by Vanguard Technologies in SAP Implementations Bajaj Tempo Ltd under leadership of with PWC S. Kumar Dewas under leadership of Siemens Information Systems Schindler India Pvt. Ltd, Mumbai under leadership of SISL Tata Telecom with SAP India Nahar Spining under leadership of SISL Marico Industries under leadership of SAP India
Overseas assignments contracted SHELL, UK under leadership of PWC Panasonic, Singapore in under leadership of Optimum Maars, France under leadership of Unilog Intelligroup , Indonesia under leadership of intelligroup Singapore Defense through NIIT
RESEARCH METHODOLOGY
Objectives
To study Market Potential for SAP ERP Implementation o Fresh SAP Implementation o Up gradation Requirements To Study existing SAP ERP Environment in the organization To Study the Vanguard Technologies presence in the local market in terms of its awareness.
Scope
The scope of the research is confined to study and assess the market potential and SAP ERP solutions in the SME segment. The research does not include the in-depth technical functionality and details of the SAP ERP package. The study was carried out for Ahmedabad region.
Sampling Design
Universe: The companies that make use of application & business solutions, for their business processes and internal functions. Sample Frame: The sample frame would consisting of the following sampling criterias Ahmedabad as Geographical area
Sampling Method: Judgement sampling method was adopted in selecting the participant companies. Sampling size: The sample size for the project is 37 organizations/companies in Ahmedabad.
FINDINGS
PERCENTAGE WISE REPRESENTATION: 1. AWARENESS OF VANGUARD TECHNOLOGIES TABLE 1 Particulars No. of Companies GRAPH 1 Aware 15 % 41 Unaware 22 % 59
41% 59%
Aware Unaware
The above table provides information regarding the number of companies who are aware of the Vanguard Technologies. This gives an insight into Vanguard presence in the market.
2. IMPORTANCE OF BPO TABLE 2 Particulars HIGH IMPORTANCE 5 No. of Companies 6 4 10 IMPORTANT SCALE MODERATE 3 12 LOW 2 5 NO 1 4 IMPORTANCE IMPORTANCE IMPORTANCE
GRAPH 2
11% 14%
16%
27% 32%
BPO is an important concept in todays environment to achieve strategic growth and competitive advantage. The rating of the participant companies would give an insight of how important is BPO for the participant organization.
25%
IMPORTANT
47%
28%
BPO of IT initiatives is an area which has become popular in the recent past with most of the Non-IT companies going this way. The rating of the participant companies would give an insight of how important is BPO of IT initiatives is.
4. APPLICATION SOFTWARE SOLUTIONS OTHER THAN SAP-ERP Particulars No. of Companies YES 23 NO 14 TOTAL 37
38%
YES NO
62%
This data gives information regarding the number of companies who are using application software solutions.
5. SAP-ERP SOLUTION Vs OTHER ERP SOLUTIONS Vs APPLN SOLN Particulars No. of Companies SAP-ERP 14 OTHER ERP 4 NON ERP/ APP S/W 19
38% 51%
11%
The SAP implemented companies are the potential for up-gradations while other ERP implemented companies are potential for switching over Fresh SAP implementations, depending on the depth of current ERP implementation. NON ERP companies are a category which have potential for Fresh SAP implementations.
14%
YES NO
86%
These are 14 companies who have already implemented SAP-ERP solution and now are looking forward for up grading there present ERP set up. This could be in terms of activating new modules and higher version.
35%
YES NO
65%
These are 8 companies who have evaluated SAP-ERP solution with respect to their organization. The evaluation would be consisting of Technical functionality , Cost-benefit, Support and maintenance Services etc., These data exclude SAP ERP implemented companies
7. REQUIREMENT FOR FRESH SAP-ERP IMPLEMENTATION. Particulars No. of Companies YES 7 NO 16 TOTAL 23
30%
YES NO
70%
This table gives the information regarding the number of companies who want to go for fresh SAP ERP implementation. The YES category companies are planning to be SAP compliant in the near future. The time duration would as follows, with in next 3 months, with in next six months, with in a year The NO category companies are presently not planning to be SAP compliant in the above time duration.
8. REASONS FOR NON SELECTION OF SAP-ERP SOLUTION: Particulars/REASONS COST LIMITED FLEXIBILITY COMPLEXITY LACK OF SUPPORT & MAINTAINENCE NO/PARTIAL INDUSTRY SPECIFIC SOLUTIONS NO REQUIREMENT/SATISFIED WITH CURRENT SET UP These are some of the critical reasons which the participant companies cited , for not going for SAP ERP.
cost ltd flexibilty
30% 37%
NO. OF COMPANIES 10 2 7 8
26%
0% 7% 0%
9. FUTURE INVESTMENT PLANS FOR IT INITIATIVES: METHOD OF INVESTMENT Particulars No. of Companies ACROSS THE YR 27 START OF THE YR 10 37 TOTAL
27%
10. READINESS FOR RECEIVING SAP INFORMATION: Particulars No. of Companies YES 15 NO 22 TOTAL 37
41%
YES NO
59%
This table gives information regarding the companies which seek information regarding SAP ERP and those who do not.
ANALYSIS & INTERPRETATION SWOT ANALYSIS PORTERS FIVE FORCES ERP POTENTIAL PYRAMID BCG MATRIX
S W O T ANALYSIS
Existing SAP ERP Vendors Local Application Vendors Threats Lack of acceptance In-house development
Weakness
opportunities
SMEs Up-gradation & Post implementation services Increased awareness of BPO and ERP
STRENGTHS Technical Expertise The Company has been part of various successful SAP ERP implementations in some of the leading organization both nationally and internationally. It has Technical Labs at Bangalore which caters to the development of technical expertise. Programming Skills It has with it experienced SAP ABAP programmers who have experience of working for leading software companies like IBM, TCS, Infosys. SAP Business Partner It is official business partner of SAP in Ahmedabad. This gives a competitive leverage of getting projects from SAP directly. Companies who are approaching SAP India are some times directed to this organization. The rate of technological transfer from SAP India is faster compared to other organizations who provide such services and are not SAP business partner.
WEAKNESS Awareness The participant companies are not aware of vanguard technologies in terms of its services. They are not aware of its status of SAP BP. Direct industry experience for fresh end to end SAP ERP implementation. The company has just forayed into fresh end to end SAP ERP implementation services and thus presently does not have required industry experience. Though the company is equipped with strong resources like technical know how and skilled work force but it lacks in direct end to end implementation.
OPPORTUNITIES Small and Medium enterprises There is huge potential for SME as these SMEs are now more exposed to technology and wide spread awareness of impact of technology on their area of work. The SMEs are now on a fast track of globalization and thus in need of total integrated business and management solutions and thus they open a door of opportunity. Up-gradation & Post implementation services There is more scope for the organization to consolidate their position in field of Upgradation & Post implementation services. As they have a rich industry experience in this area and existing Ahmedabad market has more potential for such services. Increase awareness of BPO and ERP Today there is increase in awareness regarding the different possibilities of BPO as an concept. The ERP market is going at the rate of 9.5% in the Indian market. Many Multi national companies are setting their branches in the domestic market. .The Local players as well the national players need the technological efficiency and the effectiveness to deal with such MNCs. This has led the domestic companies to seek more information regarding the latest technological developments and as a result ERP market is benefiting and as SAP ERP is one of the major players of the ERP market ,there is a huge opportunity for the organizations who happen to provide such services.
THREATS Existing SAP ERP Vendors The existing set of SAP ERP vendors from the domestic market like Mumbai pose a very big threat for the Ahmedabad players. As the Mumbai players have comparatively more experience and been there for a longer time. Mumbai happens to be technological hub in terms of the ERP/SAP ERP and also the western region. Local Application Vendors providing industry specific customized solutions The local application vendors which mainly consist of local software companies provide industry specific customized solutions to the companies. These application software happen to be comparatively very cheap compared to solution from any global company eg., SAP Lack of acceptance of local SAP ERP vendors The basic perception existing in the market which was found during the study was that local SAP ERP vendors do not have the required experience and expertise. As a result some of the participant companies do not consider or invest time in evaluating the local vendors profile and services. Thus lack of acceptance of local vendors /companies poses as barrier for the future growth and development of the sponsor company. In-house development One of the other major threats due to the increased IT awareness with in the organizations has lead to a concept of having a In-House S/W requirements of the organizations. As a result many organizations go for full fledged in house development. Some organizations get only the S/W implementation/installation done from the outside party and then make use of the in-house team for further up-gradation and modification. The support and maintenance are also handled by the in-house team of the organization as it proves to be more cost effective. development for catering to the
New Entrants
Bargaining power of Suppliers SAP AG SAP AG happens to be the main organization which provides the sponsor firm with the status of SAP Business partner. It provides the sponsor company with recent information of the developments taking place in the area of SAP ERP. For eg. The SAP ERP New dimension products which caters to the latest industry needs like Data warehousing, Supply chain management, Customer relationship management and Knowledge management etc., Thus SAP AG wields a power in terms of providing information, prospects and technological/ technical help. Work Force/software professionals Unlike other traditional industries, Software industry is knowledge driven industry. To elaborate on this statement, lets take the ERP Industry into consideration. Here in our case, the sponsor company would be able to bag in more projects if it could suffice the requirement of having a strong project management team and skilled & experienced S/W professionals. Thus before the project is given to any company , the prospective client would evaluate the technical capabilities of the vendors or system integrator companies. Thus companies and vendors like for eg the sponsor company are in need of experienced and skilled work force which gives the skilled professionals a very strong bargaining power. The remuneration of the professionals is one of the key factor. The professionals are able to wield the power of negotiation in this regard.
Bargaining power of Customers Degree of Customization The customers in the ERP(/SAP ERP) market, leverage power by demanding customization at the start of the project and the companies like the sponsor company has to well equipped to offer such customizations in order to bag the project. Post implementation Support Services The customers also leverage power in terms of wanting more time duration in terms of post implementation Support Services. One of the prominent eg could be wanting a longer period of training for its employees who would the S/W. Maintenance Support The customers also leverage power in terms of wanting more time duration in terms of free maintenance or at a lesser cost structure. Industry Competition Firm Vs Industry Set Since the company is not catering any specific industry as SAP ERP is targeting its clients across industries. Thus the firm has to compete with two set of competitors one who happens to be in the same industry as the sponsor company, providing similar services. The second set of competitors are those who are providing industry specific solutions across their respective industries.
New Entrants Established S/W Companies coming out with competitive business solutions Established companies like TCS, Infosys, I-Flex are coming out Integrated Business solutions. Now these companies have a very good market reputation and thus are one of the major competitive force in the ERP market. These companies have the capabilities of
directly competing with global companies like SAP. Since our sponsor company happens to provide SAP services, these in-directly make a major impact. On the other hand in terms of providing SAP services, existing Global players like IBM , TCS are now focusing on providing SAP Implementation Services. Substitute Products Functional Application S/W Application S/W which cater to the functional departments of the organization act a low end substitute. Eg. For finance most of the organization use TALLY Application. Now once the company buy such functional software for their major functions it becomes difficult to go for huge investment in terms of ERP or SAP ERP. Industry Specific Solutions Some s/w companies develop industry specific solutions like for eg., Construction industry, Advertising industry, Bulk Drugs industry etc., Now such companies do not compete directly with SAP-ERP provider but since SAP-ERP provides ERP across industries it has to compete with such competitors. In-house developed products Some organizations develop inhouse - industry specific solutions like for eg., Advertising industry eg, Mudra , Pharma industry eg. Zydus Cadila, Chemical industries, Construction industry eg., L&T etc., Now such companies do not compete directly with SAP-ERP provider but since SAP-ERP provides ERP across industries it has to compete with such competitors. Now some of the companies are also selling such products to related industry companies. Eg. Mudra selling its product to similar advertising agencies.
USE ERP
LEVEL 3
USE OF APPLICATION S/W CRITICAL FUNCTIONS NORMAL FUNCTIONS
LEVEL 2
LEVEL 1
PAPER WORK ,NO USE OF COMPUTERS OR AUTOMATION PRODUCTS
LEVEL 0
This evolutionary pyramid is an ladder of evolution of an organization to reach a point in which it would act as a potential prospect for SAP ERP and thus also for the sponsor company. From the study it was found out that 13 % of the participant companies were found in level 1 of the pyramid structure. From the study it was found out that 13 % of the participant companies were found in level 2 of the pyramid structure. From the study it was found out that 25% of the participant companies were found in level 3 of the pyramid structure. From the study it was found out that 49% of the participant companies were found in level 4 of the pyramid structure. The companies which fall in the higher level of the ladder are more near to being part of the market potential for the ERP and thus for SAP ERP.
BCG MATRIX
HIGH
LOW
31%
GROWTH
? 19%
Dogs 39%
HIGH
LOW
MARKET SHARE
Cash Cows Companies who are already the clients of the vanguard technologies . Clients who have taken services from the company are part of this category. These are the companies presently contributing to the sponsor companys earnings. Star Companies that have huge infrastructure major player of the particular industry who have presently on SAP, or on the old S/W solution and planning to go for ERP in the near future. Bagging these companies would provide the company with not only market share in the ERP market, but also high growth potential for the sponsor organization in terms of technical experience & expertise. Question mark Developing companies which are presently on some other local ERP or vendor applications for certain critical functions like for eg. Finance-tally. Such companies pose a question in terms of their future . These companies have high growth rate in their own industry and thus would provide high growth potential to vanguard technologies , if they acquire them as clients. But these developing companies may not presently lead to increase in the market share . Dog Companies who are presently on the lower level of the ERP evolutionary ladder and also their size is minimal in terms of the market share in the ERP market, fall under Dog category. These companies have less potential in terms of their growth and also have minimal contribution to the market share of the SAP ERP market.
Conclusion
Based on the above findings and analysis thru various tools like swot analysis of the company, Porters five forces , ERP Potential pyramid and BCG matrix it can be concluded that Ahmedabad region is on the track of embracing IT in a big way but as far as market potential of SAP ERP , the potential is high on SAP ERP support & maintenance area, followed by category consisting of developing companies For fresh SAP ERP implementations and finally consisting of category of companies who have up-gradation requirements.
RECOMMENDATIONS To increase awareness of the company: Distribution of the company brochures is the best tool for the technological products/ services to increase the awareness of the organization. So company can choose this tool to solve the problem of lack of awareness. Advertisements thru IT magazines, IT journals eg., PC QUEST Participation in IT seminars, Conduct ERP Workshops for corporate. AMA happens to be an ideal place for organizing seminars and participating as it would not only increase their companys awareness among the local organizations and also corporates. To get direct experience in implementation o By entry to new industries. o By entry into different geographical region. Increases awareness of SAP Implementation Process.
Limitations
The study was undertaken in the city of Ahmedabad region only, thus the scope study of this study is limited geographically to Ahmedabad region. The results are totally derived from the respondents answers and thus may be result of the personal bias. The result could also be affected by our ability to draw conclusions. There was also time constraint, which limited the sample size of the research to 37 companies. Few of the figures were rounded for the easiness of the sponsor. Thus this research is an indicative study and not conclusive.