Much as I respect my fellow Irregular, Sadagopan, I cringed when I read his post ERP's Center of Gravity shifts to India.
It reminded me of the huge staffing numbers the Deloittes and Accentures would throw out in the ERP boom of late 90s (when at Gartner I had the job of listening to and smiling at their claims).
In May 1998 I co-authored 2 sizable reports on the state of ERP implementation services. One of them was titled "The Mirage of Choice" and it summarized:
"...in a $19 billion application services market, there should be plenty of opportunities for real differentiation. Instead, there is resource clustering around the leading application vendors (e.g., SAP and PeopleSoft as compared to QAD or Computron), life-cycle coverage(e.g., implementation as compared to post-live maintenance), business processes (e.g. finance as compared to product design) and vertical markets (e.g., consumer packaged goods as compared to banking)."
India's ERP services 9 years later are similarly clustered - with some differences. Most of India's ERP experience is in post-live apps support. When it comes to first time implementations, many clients still use Western firms ( I had 3 clients last year in different vertical markets which were uncomfortable using Indian firms for their implementations, even though they have used Indian firms in other IT areas). The feedback around India is the level of functional knowledge in many areas is still pretty shallow. So considerable work is in the coding, testing, diagnostics. Indian vendors are heavily concentrated around SAP and Oracle. They are risk averse and secondary software vendors have a hard time getting their attention. In spite of the clustering, Indian vendors like the Westren firms in the 90s continue to expect a premium for their ERP services compared to other IT services.
To me, the growth of Indian ERP services reflects an end of life phenomenon. After 30 years+ of ERP (and previous MRP forefathers), the market should be much more mature and reflect much more reasonable price points. I think Indian vendors have a huge opportunity to go in and sell SaCS and third party maintenance to vast numbers of incumbent ERP customers (not just SAP and Oracle). At the right price points and service levels.
No hype needed.
Update : Sadagopan responds
Vinnie: I argue in my post that the next stage of battle between the Indian SIs and traditional SIs will involve a different set of competitive factors. My post is here: http://orbitchange.com/blog/2007/02/22/next-stage/
This raises two questions: What will the new competitive factors be? And who among the India 5 and Old 4 will move faster to adjust to the new competitive landscape?
Posted by: Sharad Sharma | February 22, 2007 at 12:14 PM