The manufacturing industry in India has seen better days. But despite economic uncertainty, channel partners are excited about the prospects of the manufacturing sector. Interestingly, most channel partners are also quick to add that the bulk of the investment in IT will come from companies trying to maintain operational health and hygiene rather than strategic planning.
"Manufacturing definitely has a huge potential to invest in IT. This is the right time to do so as business is not that aggressive and companies can plan their IT roadmap to be future ready," says B. Nageshwar Gupta, MD, vCentric.
According to a Gartner report, Indian manufacturers and natural resources companies will spend Rs 40,800 crore on IT products and services in 2013, which is an increase of 9.1 percent from 2012. The key areas of investment would be ERP, SCM, CRM, manufacturing-specific applications, and virtualization.
Deepak Jadhav, director, VDA Infosolutions, attributes most of this growth to significant investments in upgrading or fine-tuning ERP systems. "As operating costs increase and companies are forced to save cost and improve bottomlines, there will be an affinity to move towards more efficiency and automation like inventory planning, production planning, and supply chain management," says Jadhav.
Gupta lays bare the fact that despite ERP being one of the most basic business applications for a manufacturing firm, many companies—some with revenues of over Rs 500 crore—still rely on basic applications like Tally and Excel for payment processing and operations management. But it's a good time for these companies to re-think their strategies as ERP will improve operational efficiency to a great extent.
And that works wonders for companies stuck in a downturn. An HBR study points out that the 37 percent of companies that emerged as post-recession winners reduced costs selectively by focusing more on operational efficiency, even as they invested comprehensively in IT, R&D, and new assets. Other factors driving IT investment in the sector are Oracle's 12 G roll out SAP's in-memory range of computing solutions called HANA, says Praveen Dwarkanath, Director, MN World Enterprise Pvt Ltd.
While HANA has been around for almost two years now, Dwarkanath feels this is the right time for the technology to spread its wings. "Both these technologies are closely related to how ERPs operate. This will raise significant opportunities for channel partners who specialize in cross-platform integration, storage expansion and licensing," he says.
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