SAP in South East Asia

While many business-software makers are seeing sluggish growth, Germany's SAP AG bucked the industry trend in the first quarter by posting a double-digit profit gain. This was in part owing to Sales in the Asia Pacific region. SAP's Asia-Pacific operation says Asia is changing its business.

For SAP, the world's third-largest software maker, success in the Asian-Pacific region is vital. At first glance, the region's contribution, 15% of the company's overall revenue in the first quarter pales in comparison with the U.S. and Europe. But SAP's Asian-Pacific operation, says that the region is playing an increasingly important role in the company. SAP's software business in Asia has doubled over the past three years, and that growth isn't likely to slow: In China alone, the company plans to invest $2 billion by 2016.

For the past three years, Asia-Pacific has been the fastest-growing region for SAP, and the business is expected to stay solid as SAP invest more. The region now has around 23,000 customers and about 8,000 employees. They are investing not only in major markets like China and India, but in other emerging markets like Indonesia, Vietnam, Sri Lanka and Bangladesh. In this region there is more potential in existing customers, and more potential new customers, than anywhere else in the world.

So what is the biggest challenge for SAP in Asia?

Major global competitors like Oracle are in Asia. But the biggest competitor in Asia today is a mix of alternative uses of capital. Instead of spending money on software, customers can spend it on a new shop or factory, or to hire more people. In Asia, people running fast-growing businesses are not interested in technology for the sake of technology.

10 or 15 years ago, software makers sold products based on new functions and features, by showing customers how well it worked on the screen, however that's not the situation we have today. You have to show how the software will help improve, for example, shipping and transportation management and what kind of impact that will have on the customer's business. The software's functions and features are an absolute given and that's not a differentiator any more. The differentiator is the business value you get out of the technology.

And most importantly;

Building and scaling talent, Asian emerging markets are talent rich but experience poor. The graduates coming out of school are incredible, but the availability of mentors and coaches around them isn't as great as other more mature markets. In mature markets you might find 10 people in middle-management positions who have experience in some of the core operations. In markets like China, Sri Lanka and Bangladesh, you might find one.

SAP projects are built on talent and having the best people always delivers the best solution and foundation. BPS World are currently working with a number of clients in South East Asia to deliver both local and non-local resources to deliver the best solutions for our customers. To find out more about the SAP market in South East Asia please contact Nick Connell on nicholas.connell@bps-world.com or 01628 857339.