Ramco to take on SAP and Oracle in cloud business [Software & Services] [Times of India]
(Times of India Via Acquire Media NewsEdge) MUMBAI: Virender Aggarwal, ex-Satyam and HCL executive, is shaking things up at the Chennai-based Ramco Systems, where he joined as CEO about nine months ago.
Ramco is one of India's few product companies and the only one with an enterprise resource planning software. Aggarwal is attempting to position the technology company in the global market to challenge established giants like SAP and Oracle with its cloud product. This might seem far-fetched for a company that has a fraction of the clients and is racking up losses, but there are enough indicators to show there is a makeover in progress at Ramco. "There is nothing to guarantee it will work out. But there is a tectonic shift in technology and we are at the right place at the right time," said Aggarwal, who quit his last assignment in search of more excitement. "It's a feeling of being there, done that. Outsourcing today is as interesting as producing cement. It's more headcount based." And with so much happening on the cloud, Aggarwal said he didn't want to miss the opportunity and hence joined Ramco Systems.
Aggarwal is the first non-promoter CEO of the Chennai-based group that is also into textiles and cement. Ramco has had a cloud-based ERP product for about four years, but the company was more engineering-focussed than user-focussed. Since his joining, Aggarwal has oriented the company and the product from engineering-driven to usability-driven. Engineering-heavy presentations were replaced with how the product could solve user problems.
"We poured a lot of money into our product and, ideally speaking, we should've been the SAP of India. We are not. Now, we need to get our rightful place in the global market," said Aggarwal, who also accelerated some of R&D efforts, while cutting down on research for the sake of it. Ramco is among the few companies globally that offer ERP on the cloud. It integrates Google Maps, Google Location and Directions to represent data spatially instead of through spreadsheets. What this means is a manager can view dealer sales by region and right away see which regions are lagging or leading.
"Earlier , we were suffering from a syndrome that if we haven't developed it, we will not offer it in our product. Now, we are saying, even if it is not developed here, if it is good and we can integrate it, we will do it," said Aggarwal. All its 3,000 screens run on iPad, and many modules have a Facebook-like interface. The company says it is getting as many as 20 enquires per day from countries like Australia, New Zealand and the Scandinavian countries with cloud-based model. Customers are even willing to be guided through the installation on Skype.
A lot of its marketing is digital through Google Adwords, banner advertisements on websites, especially for the overseas audience, although traditional advertising on billboards and in-trade magazines are also happening. If the company was spending $100 a day on Google Adwords , it is now spending $200,000 a day, he says. Overall, the company expects sales and marketing spends -- currently about 2-3% of revenue to increase to 10% of revenue in a year's time.
The global benchmark for sales and marketing spends for product companies is 20-30%. But how is this going to be funded Ramco Systems had losses of Rs 8 crore on revenues of Rs 223 crore in fiscal 2012. In the latest quarter, losses were Rs 12 crore, although down from the previous quarter. "We are focussed on revenue growth because in cloud business, revenue growth matters more than anything else, and we have a very short window before the big boys come in, so we have to occupy a space and build a brand name in that." The top 70 people in the company have taken pay cuts and after years of flying business class, Aggarwal now flies low-cost airlines. For his current trip, for instance, he flew Tiger Airways from Singapore, where he is based. The day the company becomes profitable, employees have been promised free food, as in Google.
The company has moved from a direct-selling model to also selling through partners. Dell, Ingram Micro and NIIT Technologies are some of its partners. In the US, from where it aims to get at least half of its business, it has 20 partners. The US, Middle East and the Scandinavian countries will be key markets for Ramco, going ahead, said Aggarwal. "He (Aggarwal) is turning things around. Since he took over the role as CEO, his first priority was getting the right sales strategy and team in place. They are building mobility solutions for the clients to increase the touch and access points for them," added Gogia.
(With inputs from Akanksha Prasad)
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