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In an exclusive conversation with BW Businessworld’s Arjun Yadav on the sidelines of SAP NOW, SAP Indian Subcontinent Managing Director & President Manish Prasad talks about the India growth story, the company’s commitment to Indian markets and the readiness in the midmarket segment to embrace new technologies
Despite the volatile environment in the software industry, SAP’s overall momentum continued in Q2 with India being highlighted as one of the standout performers. Please elaborate on what is driving this momentum.
I think the most exciting part about the India growth story is the inclusivity. We are not leaving any segment of the society, any segment from an industry vertical standpoint. Organisations across all sizes are growing and it is also creating a significant talent movement. This trigger along with all key growth indicators is what we are seeing from a market standpoint and SAP is at the front and centre of this growth strategy.
What is the potential that you are seeing for your business in the midmarket segment?
We have been in the market for almost three decades now. About 60 per cent of India's GDP touches the SAP system in some form and shape. We work with almost every large enterprise cutting across industry verticals, government, healthcare, life sciences, the entire gamut of auto industries and component manufacturers. But equally important has been our focus on mid-market. We estimate that there are about close to 75 million SMEs in India.
We have been able to create solutions and platforms that can be embraced by mid-market as they are going through quantum leap. The mid-market is going to be a huge area of growth and being able to complement this growth with our technology solutions and partner ecosystem is one of biggest advantage that we see for ourselves in the country.
What is your take on the readiness in the midmarket towards embracing these newer technologies?
The key challenge for SMEs is how to embrace technology to drive this growth, especially with talent shortages. To achieve exponential growth, they need to leapfrog in both processes and outcomes, blending human talent with AI at the forefront. Our recent survey found that business AI adoption in the mid-market could reach 96 per cent, compared to a global average of 90-93 per cent. This shows how AI is becoming essential for aligning talent and business acceleration, playing a pivotal role across all industry verticals.
Globally, 20 per cent of your deals closed in the latest quarter included premium AI use cases. Give us a sense of how SAP is looking at AI and tailoring it for businesses?
Technology has always been there to automate the processes. Our customers have been using two or three generations of technology which has helped them to automate their processes. AI is essentially embedding the entire efficiency into a process in conjunction with human talent to bring in non-linearity of growth by making the process more efficient.
Any business process has an element of talent in conjunction with AI to bring in that efficiency. What SAP has done well is that we have been able to design our entire AI in the context of business. We are not calling this as GenAI, we are calling it Business AI – AI which is relevant for business.
Our entire AI strategy hinges on three Rs – designing and developing solutions which are relevant for business and communities, ensuring that it is reliable and, most importantly, holding it all very responsibly.
The culmination of all three is accelerating our business given the plethora of platforms and services and capabilities that SAP has today for the market.
How are your innovations on the AI front being received by clients in India?
Once our customers move and embrace the SAP cloud platform, it is much easier for us to co-innovate with them because the capabilities that we are talking about can only be delivered through a cloud outcome. In the case of Mahindra and Mahindra, we looked at the entire experience part, the entire human capital management part and then broke down into pieces where an element of human and technology can co-exist.
Other customers focus on improving processes like order-to-cash, boosting sales efficiency, or developing AI use cases to enhance product quality. A particularly exciting example is our work with Narayana Hrudayalaya, where AI is helping reduce infant blindness, demonstrating AI’s transformative potential beyond business.
SAP mentioned about undergoing a major restructuring programme at the start of this year. How is this restructuring expected to impact SAP’s operations in India and what opportunities do you see for India’s growth/contribution in the wider APJ region?
India is a growing market. The speed and scale at which innovation is happening is phenomenal. Through the restructuring, we are shifting our entire transformation into areas that are going to propel growth, keeping our customers at the centre of it. The only thing that SAP as an organisation talks about India internally is just positivity and the scope of investments here. We are thinking about expanding our business, be it our investments in labs, R&D centres and campuses. The India story keeps on growing and SAP is super excited about its commitment to the Indian market.
Brief us about SAP’s journey to Net Zero and how your sustainability solutions are helping companies to align with their internal Net Zero commitments?
We must stay mindful of the planet as businesses expand and communities grow. As an organisation, we’ve prioritised not just the top and bottom lines but also the "green line." With our green ledger, we measure carbon footprints at both process and sub-process levels. As India’s industries are set to grow 3-4x, it's crucial to adopt technologies that reduce carbon emissions. This is a pivotal moment for India, and we're leading the way in embracing green technologies. SAP is committed to becoming carbon neutral or negative by 2030, and we're making significant strides in that direction.
