Interview

We see huge Demand from New Gen Entrepreneurs towards Cloud ERP

A good calendar year so growing momentum for Actouch with new demand post GST and SME adoption of Cloud ERP, now the company has big plans in place to further market share and expand in 2019.

“Some robust business plans are on the cards to grow AcTouch in India. We have identified a business opportunity where the 50M+ SMEs don’t have an access to Computers to install base software.” – Nityananda Rao, CEO, Actouch Technology

Q1. From an overall Cloud ERP growth point of view, how challenging was the year 2018 for India market?

For the last 5 years, we have seen that adaptation to Cloud ERP in India is a slow process. It involves educating the Business owners on the advantages of cloud solutions, its security and how it would make the life of Business owners and department heads easy. Their main concerns are how the data is secured on Cloud and it is not made available to competitors and other Government agencies etc. It was strange to note that many SMEs don’t even understand what Cloud ERP Software is.

We started our journey by educating the business owners, built trust by providing good support, solving their issues, made sure that the application is available 24×7 and helped them with their internal process improvement etc. In India, the second challenge for the last 5 years is in telecom infrastructure and its surrounding services like Internet availability and affordable data plans. Now these are resolved due to presence of Jio Internet services.

However, post Goods and Services Tax implementation in India, we see a huge amount of demand from new generation entrepreneurs to move towards Cloud ERP solutions, wanting to reduce their costs and increase profitability. The earlier advantage that is provided by many standalone Accounting software has been lost and business owners took advantage of this, as they want to see their data on Mobile now. More than that, I think Indian business owners started realizing that their core strength is to run and grow the business and not to manage Software and Hardware. Personally, we saw a good growth in 2018.

Q2. How was AcTouch Technologies’ performance for this calendar year? Which verticals embraced your solutions maximum and why?

As you all are aware, ERP Software is a RED OCEAN business and there are 1000’s of vendors who sell ERPs of all varieties. We built ERP features like Sales, Quotes, Billing, Inventory, Payments and Receipts, Manufacturing module with Planning, Work Order, Bill of materials, Subcontracting, Finance, Interface to marketplaces like Amazon, eBay etc. with all Financial &MIS reports. Most of these were developed with Customers as subject matter experts as we believed in their feedback to simplify the process.

Last calendar year was good for us. Because previous to that year, we took a bold decision to focus to acquire more customers from Manufacturing segments as they need more user licenses and we found a GAP in the market. To gain the confidence and market share we invested heavily on the problems that were faced by manufacturing segments and tried to address them. There are few problems that are known to all, but no one is spending efforts or money to solve it. We focused on this segment to win few customers and that helped us to gain more customers. We focused on end users usability and how to simplify the data entry process by studying end users behaviors.

Our focused approach helped us to gain manufacturing customers in OEM Suppliers, large Machine manufacturers, Switch Gears and PVC Pipe manufacturers, Injection Molding Companies etc. Mainly we focused on Discrete manufacturing segment and we achieved a lot with few key logo wins here.

Few areas we focused are as below that gave tremendous value to our customers.

  • Product costing (Activity Based Costing- ABC)
  • Simplified process of materials movement across Production, Stores and Inventory sections.
  • Bill of Materials with By-products. How to handle them and ensure costing is affected?
  • Handling of Work order, Routing, Subcontracting operations from ONE SCREEN with management status.
  • Planning module that helps to manage day today production plan and issuance of materials.

Q3. What activities/ initiatives you did that helped you differentiate from the competition and helped increase market share?

From the beginning, we were clear that to win the customers in this red ocean, we have to win our Customers with good Services and focus more on their problems. This pivoted our focus on the following and we built customer TRUST.

  • Solution in Progress (SIP) – These feature list are same like many of the existing ERPs like handling of Invoicing, Billing, Payments, Receipts and Financials etc. However, we focused on the end users usability and how to simplify the process by studying end users behaviors.
  • Identified problems – These are the problems that are known in the existing products, but no one spending efforts or money to change it. We focused on this segment to win few customers and that helped us to gain more customers.

Q4. How has Cloud changed the playing field for SMEs in comparison to larger enterprises?

Good question. From a business transaction and process perspective, whether it’s a SME or Enterprises, the business process, its checkpoints, its documentation are all same except the volume of work and number of people who use the application. But SMEs were afraid to touch ERPs because of lack of RIGHT information. There was news of failure of large ERP projects, huge hardware setup and license Costs, frequent need to train employees etc, deterred them not to go for any ERP Solutions.

But this changed when Cloud ERP came with same features that are available on Cloud at 1/100th of a cost with full data security.

When we launched our Cloud ERP at a SaaS model where the SMEs are expected to pay only the Annual license fees, many were suspicious as they thought we have hidden charges, we would steal their financial data etc. It took time to convince them and build trust on us.

Post implementing the Cloud ERP, the SMEs are using them to take advantages on the following areas.

  • Interface the ERP to their web portal and take customer orders in online mode
  • Dealer and their Sales persons are connected in online mode and their order processing are tracked in online
  • 100% saving in the cost of Hardware and infrastructure, network, Software license etc.
  • They realized the saving in Money and Resources as they move out of old technology. No more maintenance of old software.
  • Many realized that it is good to depend on good vendor rather than manage everything in-house team.
  • Some of the industry’s best practices been followed in Cloud ERP that helped them to improve their productivity, quality of products, tracking the product costing and meet customer milestones. So business started improving.
  • Many old Businesses houses were forced to move into Cloud Technologies, as many surrounding solutions are available only on Cloud like Sales force Mobile Apps, or Dealer Portal and getting their orders online and update their ERP etc.

It became a Social recognition for SMEs to move into the new technologies like Cloud or use Mobile Apps for their Sales Force or Dealers etc. One of our customers is 70+ years and he is using it for the last 5 years and no complaints.

Q5. Point out some of SME Challenges regarding ERP implementation and the advantage of solutions like Actouch in mitigating those challenges?

There are multiple issues in the implementation of an ERP product.

  • Lack of senior management commitment and involvement.
  • Employee’s Internal resistance to change. Many SME employees are averse to technology and they are always scared of losing their “Power” in the company that they built over the years. So they don’t want get into any elaborate training with many complex features.
  • Change in the internal process that’s been built due to lack of features of their existing Accounting software or some other customized one.
  • Customizations did in the local software wouldn’t be available when Enterprises moves to new Cloud ERP software.
  • Mismatch in available Data and expectation across the stakeholders. Many employees think that all of their existing problems would be resolved as the new ERP comes into play.
  • Fear of data loosing and loosing of Internet connectivity. There are few instances where the network in India is missing for days and this could be a genuine case for the business to decide to move to 100% cloud based solutions.

At the beginning of the product development, we were aware of these issues, as we had spoken to few clients. So we made sure that

  • Application is simple and easy to understand and use, but has the extensive capability to track and monitor the data
  • Application is built with layers of features that can be enabled based on the needs. This helped us to minimize the customization and at the same time provide some of the best practices used in the industry.
  • We could able to support customer over email or phone.
  • We built a robust data migration process with required data are migrated to AcTouch.com
  • We follow an implementation methodology that builds confidence in Customer and his team members giving a visibility on process and status.
  • We built the interfaces to other Accounting Software such that the CA and Auditors are also happy. The idea is to co-exist with many other products where customer is happy with them.

Q6. What is your advice to SMEs and Start-ups looking to adopt Cloud ERP solutions?

They should do it ASAP to see the benefits and save in Time and Money. Please note that when we migrate to any new products or Cloud ERP, ensure to go for Cloud ERP product that has

  • The strong data Security policy implemented and data backup happens etc.
  • The capability to customize and what kind of support to resolve the issues.
  • Good vendor reputation and support etc.
  • There is an eco-system in built with good customer references and feedback to improve the product and its features.

Important is, ERP is not a magic wand that solves all your problems. So, focus on your top 10 issues to be resolved from Cloud ERP and later fix the rest one by one.

Q7. What are your plans and projections for 2019?

Some robust business plans are on the cards to grow AcTouch in India. We have identified a business opportunity where the 50M+ SMEs don’t have an access to Computers to install base software. Addressing this challenge, we have a major announcement coming shortly that will revolutionize the operations of SMEs in a big way. We have currently released the beta version of the product &will be soon available for customers to use.

We built multiple revenue playbooks around this product and it has a seamless integration with our Cloud ERP, in case customer decides to move to large ERP product. (We will share the news of the new product with Enterprise IT in a month’s time) Apart from that, we have identified few niche areas like Dealer Management, Sales Force Apps etc. where the data is tightly integrated with ERP solutions and we see the demand.

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