Today SAP has reached nook and corner of the world providing robust ERP solutions in every sector. With over 42 years of experience, the rich legacy of transforming the IT industry continues.
Globally 25 percent of revenue comes from public sector for SAP. But the growth rate of ERP solutions in public sector is not as positive as that of private sector, specifically in developing nations viz., BRIC Brazil, Russia, India and China and MIKT – Mexico, Indonesia, South Korea and Turkey. However, some of the stable government bodies today are looking to bank on ERP solutions in order to ensure effective budgeting, improved community services and digitization.
When I quote Digitization, the first country which strikes my mind is India. Indian government has recently launched a Digital India program, where Google India is partnering with the Indian government to promote digital empowerment of citizens.India is already home to the third largest number of Internet users globally with 245 million users as of June 2014. As the statistics speaks for itself and with the new Indian government trying to GO DIGITAL there exists a lot of opportunities for ERP players to provide innovative solutions to transform the developing economies on a optimistic growth trend.
Many developing economies face the heat of corruption and inappropriate spending by the government bodies. There exists a need for proper governance in order to optimize the public sector operations, viz.,
Optimum utilization of budget
Identifying preventable costs and misappropriation of funds
Effective implementation of important and critical programs.
This paper gives more insight on potential SAP applications in the Indian public sector.
India is the seventh largest country in the world in terms of area and second most populous country with over 1.2 billion people. According to IMF (International Monetary Fund) as of 2013, Indian economy is nominally worth US $ 1.842 trillion; it is the eleventh largest economy by market exchange rates and the third by purchasing power parity.
However, India still lags behind many countries in the world in nominal GDP per capita.
There are 251 public sector companies in India and they are categorized into Maharatna, Navratna and Miniratna on the basis of turnover and investment over a period of years.
With the current Indian government showing inclination towards technology, SAP ERP solutions can play vital role in transforming public sector, Indian judicial and e-governance system.
1.2 Public sector challenges
Lower tax revenues
Legacy IT solutions
Inappropraite utilization of human, financial and fixed assets and likewise
1.3 Opportunity areas
- Judicial system
- Citizen centric functions
- HR and payroll
- General elections
- Education and research
- Manufacturing sector
- Agriculture sector
- Defense sector etc
This paper will touch upon a few areas where SAP can be a game changer.
1.1.1 Planning and Budgeting
The most imperative task of an investment program is to manage the planned costs and approved budget values for a given period of time. SAP provides a customized solutions in creating planning profiles and budget profiles. You can assign a planning profile and budget profile to each program type, which will ensure control planning and budgeting differently for each program type.
Highlight : SAP can offer customized solutions for Union Planning and budgeting.
1.1.2 Judicial System
SAP has already developed record and case management solutions, this can can be utilized more effectively in Indian judicial system where often the verdict particular legal case is prolonged due to lack of record and document management. This enables central access to all required information, paper records and electronic records are managed in the same system, scanned documents can be stored, fast administration and quick access to information for citizens and likewise.
Highlight: SAP can bring a robust change in Indian judicial management system with its Legal case management and Record and case management solutions.
1.1.3 Citizen Centric functions
There is a huge opportunity for ERP players in Indian citizen centric functions. Most of the documents viz., marriage certificates, birth certificates, election ID card issue, death registrations etc are done through manual process and lot of paper works are involved.
Highlight: SAP first stint in Indian public sector :SAP, via an app available in Hindi, will manage and streamline BMC’s ( Bhopal Muncipal Corporation) citizen centric functions which includes issuing marriage certificates, birth and death registrations, city infrastructure development and open space management, including roads, parking, traffic signals, community halls and schools. The solutions will also streamline permits, health services, water supply, lake conservation and tax collection, among other services.
1.1.4 HR and Payroll
HR and payroll management in public sector are still being managed through paper works and with an outdated IT infrastructure. The payroll applications plays an important role in employee management, time tracking, procurement and employee expense management.
Highlight: With the growth in employment rate, customized payroll ERP applications streamlines the process of employee management and engagement.
With many government arms looking revenues from tax as a main source of income, effective tax and revenue management implementation is advised.
Tax payer management
Interface with taxpayers, formation of new taxpayers or new accounts, setting up filing frequencies, and supporting multichannel filing, such as paper-based forms and electronic filing. The predefined solution enables the automation of the validation of tax returns, calculate tax liability, and trigger further actions, such as reminder letters and penalty calculations.
Collection and disbursement
SAP solutions enable you to process payments using a variety of payment methods, including manual processing of payments that cannot be assigned or settled automatically.
Highlight : The customized and flexible from SAP can help public sector bodies to effectively manage taxes and revenues, improve social contribution collection – and significantly reduce fraud, waste, and abuse.
1.1.6 Agriculture Sector
India being an agrarian economy, there is a need and hunger for farmers to go digital and online right from harvest to selling.
SAP has recently offered AgriOne suite which caters to specific agricultural cooperative issues, farmer contract management, audit trail of agricultural inputs, real-time stock management, input purchasing and distribution.
Highlight: With government allocating large chunk of budget to farmers and many programs have been launched to cater to the need of farmers, the customized solutions from SAP can create a revolution in Indian agriculture industry.
1.1.7 Manufacturing Sector
While public sector in India has launched several programs to create India as future manufacturing hub, there are many exemplary models where Indian manufacturing companies are creating world class infrastructure and eyeing revenues on global platform.
Highlight: SAP offers Manufacturing rapid deployment solutions viz.,
- To accomplish the complete sales cycle, from order generation to post-sales activities
- To capitalize on procurement and logistics cycles for requisitioning, invoicing, and payment processing
- To control predefined processes to improve discrete, process, and repetitive manufacturing
- To create a network connecting your headquarters with your subsidiaries and business partners
- To enhance your finance department’s efficiency by automating processes and reporting functions with accelerated financial closes
- The solution deployment is also available powered by SAP HANA, lightning-quick in-memory platform
1.1.8 Education and Research
Indian education system comprises of both public and private sectors. There are many prominent public sector and private sector institutions, however many public sector institutions lacks infrastructure and outdated teaching techniques. It is a noteworthy, that private education system in India is projected to be US$40 billion market and public sector is still lagging far behind to catch up with private sector in education arena.
Highlight : SAP with its best in class software and applications can support in elevating higher education, improve in performance matrix of public sector institutions. Thrust on leadership learning with more revenue and endowment funds, optimum research and with improved analytics.
1.1.9 Defense Sector
Today most of the developing economies allocate large portion of expenditure in defense sector in order to safeguard the country from external forces. Often these expenditure in defense sector are not utilized in an appropriate manner. In the recent union budget the military budget is set at US$ 38.35 billion, these expenditures makes the way for optimum utilization of resources.
Highlight: SAP offers concrete solutions in agile aerospace and defense sector. The solution is derived to achieve
Business capture and Program delivery
Creating Ingenuous and complex products
Responsive supply network
After market services
HR, Finance, Procurement, IT and Technology platform.
2. Factors affecting the SAP roll outs in public sectors :
There can be many factors which will impact the SAP roll outs in public sectors, the important ones are portrayed below :
- Lack of education and Training
- Resistance to change and likewise
While the tech-savvy public sector in India is striving hard and focusing to create Digital India, SAP which has already proved its mettle in collaborating with social media strategy for 2014 general elections with one of the prominent party in India, the time is not too far where SAP will step into the foray of offering robust ERP solutions for Indian public sector.
SAP has formerly done an implementation for the Municipal Corporation of Greater Mumbai nevertheless that was mostly for back end operations. SAP’s loud and clear passage to make its core programs available in Hindi language is a sure shot sign of the company eyeing a bigger pie of the public sector market