Presentation - Final V2

A Special Group Project from Gautam Kishore Santosh Sharath Vimal Veena

GCC

Market 3i-Infotech and its ERP offering Research Methodology Porter’s 5 forces Research Analysis – Competitors and Customers Key Findings Recommendations

"To analyze the ERP market in GCC, the results of which can be used by 3iinfotech to refine its strategies for improving market share" The analysis is based on 1. Responses from Vendors 2. Responses from Customers 3. Secondary data analysis from Journals, whitepapers, websites.

Source : IDC Report, 2006

Source : Madar Research, www.ameinfo.com

Source : www.3iInfotech.com

Banking

(KASTLE) Insurance (PREMIA) Capital Markets (iBoss) Mutual Funds (MFund) Enterprise Resource Planning (ORION) Software Services and IT Outsourcing e-Governance BPO

Source : www.3iInfotech.com

Top ERP Vendors in GCC

Market Share

SAP

33.1%

Oracle

23.3%

Microsoft

7.5%

3i-infotech

7.3%

Sage

4.3%

Epicor – scala

2.7%

Source: IDC report, 2006

Definition of the o Management Question o Research Question Reports Journals White papers

Study Competitors

Study Customers

Understand the Market (IT, ERP)

Sampling and Data Collection GITEX Interviews Online survey

Data Consolidation and Storage

Data Analysis and Interpretation Research Reporting

Management Decision

Problem identification “ ERP market analysis based on ERP vendors and customers”

Research Problem “ To understand the GCC market in terms of the parameters related to …..

Competitors

• Market share • Major domains serviced • Major customer locations • Media used to market • Partnership model • Perception about competitors • Differentiating factor (s) • GITEX participation details

Customers

Market ( IT, ERP)

• Perception about vendor • Media used to choose among vendors • Importance to partnership model of vendor • Desired characteristics in the system • Competitor’s influence in choosing product • Issues in implementation • Benefits achieved from ERP

IT market – GCC ERP – worldwide ERP – GCC Emerging trends Challenges

Studying competitors

… from Research Question

Competitors

Research method = Descriptive

Based On: • Research question • Porters Model

Sampling

Data Collection Design

Secondary Trade Journals White papers Websites Reports

Primary GITEX Telephonic Interviews

Data Consolidation and Storage

•

Based On

Domains serviced • Market share • Scale of operations • Competitive pressure to 3i

Studying customers

… from Research Question

Customers

Research method = Descriptive

Based On:

•Complementing of Competitor data • Research question • Porters Model

Sampling

Data Collection Design

Secondary Websites

Primary Telephonic Interviews Online Survey

Data Consolidation and Storage

•

Based On

Respective domain • Scale of operations

Studying Market

… from Research Question

Market

ERP market

IT Market

Research Reports Madar Research  Gartner  Forrester  Aberdeen  IDC White Papers Journals Web 

Data Consolidation and Storage

Consolidation and Analysis

Customer data

Competitor data

Market data

Tools used:

Data Analysis and InterpretationMS Excel

Project Report Presentations

Presentation of results

Management Decision

Qualitative evaluation of 3i Infotech’s strategic position Porter's Five Forces mainly focuses on the industry structure analysis in the organizations external environment. It provides a simple approach to analyze industry structure and helps in identifying and determining the attractiveness of an industry, the source of competition. It reveals the threats and opportunities of the industry.

Supplier Power (e)

Threat Of Substitutes (a)

Rivalry (b)

Buyer Power (d)

Barriers To Entry (c)

Rivalry • ERP segment in Middle East Is highly Competitive • Market for ERP mainly dominated by SAP with a share of 33.1% • 3i-Infotech stands 4th in the market with a share of 7.3% • Close competition from players like Sage & Epicor. • SAP & Oracle shifting primary focus towards SMB’s • Dynamic market entrants from start-ups compelling changes in the business models within short times. • Price claims from players like Epicor which costs 26% cheaper.(www.erpdirectory.com) Source: IDC 2006

Threat Of Substitutes SaaS is emerging as one of the major factors in the ERP Industry

Open Source ERP like Compiere could be a potential threat for 3i

Barriers To Entry ERP domain growing at a rapid pace, hence encouraging a lot of new players

Barriers To Entry There are no major barriers to entry like Government Regulations. Primary data shows a sizeable amount of new entrants to this region over the last year. Entry Deterring Prices and Strong Partner Relationship are the key factors to keep a check on the new entrants.

Supplier Power Maintaining good relationship with the supplier is a key facto for 3i-Infotech. Implementation Partners can join the competitors and this is a threat to the company as it can loose existing customers.

Buyer Power Customers demand “More For Less” Because of the large number of players, the bargaining power is very high Increased focus on BPR, customers prefer local implementation partners

Company SAP Arabia Sage Epicor Oracle Microsoft

Countries UAE,Saudi,Oman UAE, UAE,Saudi Saudi, Bahrain, Oman, Kuwait UAE, Saudi, Saudi Bahrain, Oman, Kuwait

Alliance

Infotech

• India based company • Products – ERP, Performance monitoring solutions • Operating in India, US and Europe

NAWA • Offers Enterprise Business Applications for SME's, Custom Web-

based Business Applications • India based company • Used GITEX as a platform to meet partners who can market and support NAWASOFT's CRM product in the UAE • Launching new product “NAWASOFT ONE OFFICE version 3.1” and its mobile edition.

Company Mikro

Country of origin Turkey

ABAS

Germany

IST

India

Dewsoft

India

Alliance Infotech

India

Innosoft

India

Remarks 65000 users in Turkey, presence in 10,15 countries 1900 customers across Europe. 47 million Euro company, entered GCC through BT group of Saudi Arabia Operations across India, USA, Europe, Australia. Operations across India, Americas, Europe, South east asia. Offering CRM solutions for large and medium scale businesses Operations across India, Malysia and Africa

Source: www.ameinfo.com, The 2006 Global Retail Development Index by ATkearney

Percentage split of customer location across GCC

Percentage split of foreign and local vendors in GCC

Perceived edge of ERP vendors over their competitors

Perceived edge of Major vendors over their competitors

Major Vendors – SAP, Oracle, Microsoft, Sage, Epicor



SAP:

 

Technology: SOA Complaint, Coming up on-demand applications in 2008 Domain Expertise: Best practices derived out of numerous implantations done across the world for most of the Fortune companies



Oracle:



Technology: Rapid Application Deployment technology to reduce implementation time Domain Expertise: Best practices derived out of numerous implementations across the world





Microsoft:

  

Technology: On-demand ERP applications using SAAS Cost: Cheaper compared to SAP and Oracle Ease of Use and customization: Customers are happy with the ease of use features



Epicor:

 

Technology: SOA Compliant Cost: Claims to be 26% cheaper than other ERP products in the market Ease of Use: Claims that it is one of the easiset to use.





Sage:



Local Market Awareness: Acquisition of local company Accpac has given them the edge. Ease of Use: Simple to install, easy to use Linux-based back-end with a Windows-based ERP front-end.





SAP, Oracle and Microsoft claimed to have good support model and it is one of their USPs.



Primary Data: Scan Technologies, 3i-Infotech's previous implementation partner claims 3i-Inoftech to have a poor support model. They switched to Epicor as customers were unhappy with 3i-Infotech's support

Factors customers consider before choosing an ERP vendor.

•

Willingness of customers to change

Perceived competition as per various ERP vendors

Customer Perceptions of the biggest ERP vendors in GCC Customer Perceptions 100% % of Respondents

80% 60%

Unaware

40%

Not good

20%

Good

0%

Excellent Oracle

SAP Microsoft Epicor ERP Vendors

IFS

Sage

3i Infotech



IT is considered as an expense rather than an investment



Business requires several meetings customers and it is not easy to sell



Reaching out to new customers is not easy unless references are available



Lack of customer support and inability to comprehend the benefits ERP can deliver to business

with



Difficult for small ERP vendors to make business as brand sells here and is valued



Post implementation, support phase needs constantly staying touch with the customers. This is not easy for small ERP players



Lack of involvement of customers in implementation phase which gives a tough time for vendors and service providers to fit in the services within the agreed costs

Average implementation time according to ERP vendors Average ERP Implementation Time Less than 3 months 13%

3 to 6 months

13%

6 to 12 months More than 12 months

26% 48%

Percentage of ERP vendors working on partnership model in GCC

Country wise split of ERP vendors working on partnership model

Partnership model v/s location 100%

20%

18%

13%

15%

80% 60% 40%

80%

Without partners

82%

87%

85%

Saudi

Bahrain

Oman

20% 0%

UAE

With partners

How much does the ERP vendor’s partner matter in selecting and ERP product

Common media used:  Websites  Newsletters, mailers, faxes  Direct marketing like telemarketing ( e.g. eBiz)  Online Marketing  Partners New Media used:  Collaboration-Portal for users, customers and subcontractors  Sponsorship of events – Trade Shows  Education campaigns  Advertising by hiring PR companies for media relations  Customer forums/workshops ( e.g. IFS World Conference in Berlin)  Webinars ( for e.g. Epicor follows this method)

Media used by companies to market their products

Various sources customers use to select an ERP product

Reasons why ERP vendors participate in GITEX

Source : Primary data

Source: Primary Data

 Identifying

market opportunities and constraints based on market research

 Relationship

of competitive intelligence to decision making

 Effective

use of Porter’s 5 forces model in Market intelligence

 Understanding

the application of statistical analysis in market intelligence

From: RISHIKESH TRIVEDI /INFOTECH/EMEA [mailto:[email protected]] Sent: Tuesday, November 13, 2007 2:30 PM To: Vimal Mohan Cc: Shilpa Dalvi; Gautam Sood; Kishore; Santos MH; Sharath Srinivasamurthy; Veena Subject: RE: Special Group Presentation   Dear Vimal,   The presentation was quite well done.   The content was well covered – as discussed, a minor re-articulation is required.   The data has been well analyzed & presented in a meaningful format.   Overall, this has been a very useful project for the organization.   The satisfaction of the customer can be easily gauged by the repeat business it generates. We are keen to have the next batch work with us on a project.   Regards, Rishikesh

Reports:  IDC - Worldwide Enterprise Application 2007-2011 Forecast Update and 2006 Vendor Share – Albert Pang, 2007  The Aberdeen Group - The 2007 ERP in Manufacturing Benchmark report – July 2007  IDC – Enterprise Application 2006 Vendor Market Share in MENA  EDC Spring 2007 – Developing Markets Overview  Madar Research – UAE Knowledge Economy Report 2006 Whitepapers & Journals  SAP Insight : ‘Implementing Enterprise Resource Planning : Lessons Learned from the front ‘, Greg Tomb and Doug Dickson  RAND 2003 : ‘The Information revolution in the Middle East and North Africa’ - Grey E Burkhart & Susan Older  ‘New Global Strategies for Competitive Advantage ‘-Porter, Michael E, Planning Review; May/Jun 1990;  ‘A Framework for Success’; Ralph A Oliva, Marketing management , Jan Feb 2002 Books  Marketing Research , Parashuraman, Dhruv Grewal , R.Krishnan; Bizantra