Thursday, 19 February 2009

SAP Philippines. sees revenue growth from SMEs

The Manila Bulletin

SAP Philippines Inc., a business software provider, expects revenue contribution from its small and medium enterprises (SMEs) unit to account for 30 percent of its total business this year from 20 percent last year following the surge in the requirement for business solutions among SMEs.

Patrick G. Tan, SAP director for SMEs, told reporters during a press conference for its latest client FoodAsia Corp. that the revenue contribution from its SME division has been growing significantly over the years. Last year, the SMEs account for only 10 percent of their total revenues.

Because of the increased demand, SAP has also beefed up its SME unit by adding more people and enlisting more partners.

Tan, however, clarified that the company’s focus on SMEs has always been there whether there is crisis or not but it is only now that they are getting more people to work in its SME unit to handle an increasing number of clients.

At present, SAP has over 270 clients and expects to grow this to over 300 in the first quarter this year but Tan said there could be a potential of 3,000 IT-ready companies out there or those companies that require the "Business One" solution, an entry level business software.

"This means we only capture 10 percent of the market," he said.

To further make their business solutions more affordable to entrepreneurs, SAP has come up with bundled services including the software solution, hardware, maintenance of network, hosting email, website, payroll and biometric device.

This way, the client can cut on cost and they are worry-free because everything is done for them.

SAP has also offered a financing scheme through easy payment schemes.

SAP Philippines president Jenny Ligones said the growing demand for business software solutions in the country is driven by the aggressiveness of the new entrepreneurs to enhance their IT infrastructure to improve their efficiencies and become profitable.

For instance, its latest client FoodAsia Corp., a manufacturer and retailer of consumer food products, seeks to increase its profits by improving its efficiency through the SAP Business Oneâ„¢ software.

The company, through its brands Bibingkinitan® and FreshFoods®, produces rice-cakes, frozen bread, beverages, and other flour-based products. FoodAsia Corp. selected the SAP Business One solution through SAP-licensed reseller Clerysys Philippines, Inc.

"With our products being distributed through various retail channels like our company-owned stores, franchised-owned stores, and other retail partners, we need a business solution that will allow us to get accurate figures which in turn, will help us make quick management decisions," said Richard Sanz, president and CEO of FoodAsia Corporation.

At present, FoodAsia has about 110 stores located in all major cities and distribution channels including all major supermarkets, groceries, convenience stores, wet markets.

Last year, the company opened a total of 35 outlets and is targeting between 30 to 40 stores this year.

Before the adoption of SAP Business One, the company had to grapple with a host of operational problems such as the tediousness and inaccuracies of manual encoding of sales, inventory and distribution data.

Data that is crucial to maintaining good cash flow and proper inventory. Furthermore, because of the voluminous paper trail generated by the manual system, the company’s operational costs were costly as extra office supplies and manpower was needed.

The adoption of SAP Business One is expected to resolve these operational problems, Sanz said.

The company expects to streamline its business processes and implement control measures on inventory management, distribution & logistics, and accounting systems. Another expectation is to increase the productivity levels and efficiency of its staff by spending less time in the manual process of monitoring transactions.

Since SAP Business One is linked to the company’s proprietary SMS Messaging System, which tracks down all the sales and inventory of each of its 110 stores at real time thru SMS, the company expects its operations at the store level to be more efficient and reduce its opportunity losses.

SAP is the world’s leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses.

The company has approximately 76,000 customers including customers from the acquisition of business objects in over 120 countries. SAP is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP".(BCM)

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