Introduction to SAAS
Let’s begin today’s blog by talking a bit about the SAAS ecosystem without which the Indian Sales force automation (SFA) and Distribution management system (DMS) platforms would not have flourished the way they have in the past decade. As a concept, SAAS was introduced to India sometime around the late 2000’s, and it dramatically transformed the Indian software industry by opening up the playfield to a large spectrum of enterprise technology vendors who started to believe that there is enough space for them to create products and potentially compete with the global market leaders in the enterprise application space (like SAP, Oracle, Microsoft) and at the same time, it gave the Indian FMCG industry participants of all shapes and sizes the opportunity to adopt standard, best-in-class software platforms without having to allocate millions of dollars in annual budget and go through an organisation-wide change initiative without the surety of its success.
SaaS is currently a 200-300 billion dollar market globally, expected to double in size by 2025 which represents an extra ordinary growth trajectory. In terms of how SAAS impacts the industry, a little over 33% of all software today is SAAS, which is expected to reach 80% by the end of this decade.
Peri has been at the helm of the SAAS technology curve since 2015 and have closely witnessed the SAAS transformation as consultants and project owners of turnkey enterprise initiatives for various companies across industries including the medical consumables, FMCG and financial services. We believe two factors have played a major role in SAAS growth in an Indian context:
- Penetration of ERP platforms: Global majors like SAP, Oracle, Microsoft invested dedicated efforts in translating the benefits of adopting an ERP to the Indian manufacturing companies and created an ecosystem of implementation partners across the country to do the last mile implementation. This resulted in a slow but steady knowledge transfer to Indian software resources including developers, managers, and entrepreneurs. And a handful of these trained and skilled professional later became SAAS entrepreneurs.
- Explosion of Organised Retail: The shift of Indian retail from unorganised (>95% at one point) to organised (including modern trade, and online) meant that manufacturers (both FMCG and Consumer durables) got onto the journey to modernise their sales and distribution functions, an important component of which was to incorporate automation at various levels of the supply chain. This resulted first in the creation of customised software solutions as per an organisation’s business processes, and then led to the creation of standardised, industry-wide software platforms which paved way for an eventual shift to SAAS.
What’s Missing In Indian SAAS - Accessibility
Although the Indian verticalized SAAS ecosystem has had a fair share of success stories, Peri believes that it has a long way to go in terms of delivering tangible business benefits to tier-2, tier-3 Indian FMCG companies and their distribution partners. Let’s analyse the ecosystem based on a rough, back of the envelop calculations:
As per our estimates, India has anywhere between 25-30 thousand FMCG manufacturing companies with around 5 lakh feet-on-street (like sales representatives, managers, promoters, and merchandisers) and 5 lakh distribution partners (like stockists and distributors), served by less than hundred pure-play, and vertically aligned FMCG SAAS providers like Peri CRM. If we apply the Pareto principle, only 20% of these 25-30 thousand FMCG companies (that contribute 80% to the overall FMCG market) have been the focus of the SAAS automation wave leaving a long tail with none or minimal levels of automation. This tail includes large companies with legacy inhouse systems, family-run businesses with no interest in automating processes, small-to-mid sized companies who rely on Tally to manage inventory and WhatsApp to manage workforce, and distribution partners who do not want to go digital fearing loss of local knowledge and control to parent companies. This also corroborates with the fact that the top FMCG salesforce automation vendors (like Salesforce, Bizom, FieldAssist) publish anywhere between 300-500 FMCG companies in their portfolio. Also worth noting are the low number of fresh implementations that happen yearly and how most RFP’s have 2 or 3 vendors competing to grab the deal at any cost. Based on these observations, it is safe to conclude that the Indian FMCG SAAS is a highly competitive buyers’ market with single digit growth rate.
What’s Missing In Indian SAAS - Affordability
Coming back to our point, it is clear that the Indian FMCG SAAS has only been able to influence the top layer of the industry which already had the know-how, budget and resources to onboard an enterprise-wide automation solution, whereas the rest of the industry participants spread across 2000+ Indian cities have been left out of the wave. The proponents of SAAS would argue here by saying that “SAAS model reduces the entry barriers by splitting the Total cost of ownership (TCO) into smaller monthly payments” which is true but what they are ignoring and perhaps is the root cause of these disappointing numbers is the fact that majority of the Indian FMCG SAAS vendors charge an upfront implementation fees which ranges anywhere between INR 50,000 to INR 2 lakhs. And the implementation takes anywhere between few weeks to few months for the system to be fully stable and adopted. This creates high entry barriers for the 80% of the FMCG universe even when their senior stakeholders are inclined to evaluate and adopt a SAAS solution.
Let’s Test The Waters
For a moment, put yourself in the shoes of a tier-2 or tier-3 Indian FMCG company’s which is evaluating a SAAS platform to automate its sales and distribution team of around 20 sales representatives covering 2-3 adjoining states. What is the typical search phrase the IT head of such company is bound to search on Google. Perhaps one of these “FMCG SFA India” or “best SFA for FMCG companies” or “FMCG SFA free trial”. An analysis of the results thrown by Google by searching the world wide web are eye opening
- Software listing platform like IndiaMart and Software suggest
- OptCRM: Has a button “free trial & demo” but doesn’t work
- PepUpSales: Says contact for free demo
- Beatroute: Has a button “Request a demo” which opens a form to be filled
- RepZo: Not an India based product
Peri realised these challenges in the Indian verticalized SAAS landscape during the Covid time when field force market visits were reduced due to frequent lockdowns and illness (or the risk of getting infection), supply chains were broken, and FMCG companies were keen to get digital but there was no quick, easy and affordable way to onboard a new SAAS platform. There were many software vendors who genuinely wanted to support the industry but were limited by the rigidity, accessibility, and affordability of their commercial and implementation models. There was no option then and there is no option now to access a FMCG SFA platform on a trial or demo basis for a certain number of days, to allow companies to fully understand the strengths and weaknesses of a platform vis-à-vis their organisational structure and maturity. There is no way to conduct a pilot with handful of users, see how well they adopt/embrace it before rolling it out fully. There is no feedback mechanism to observe the tangible benefits in FMCG KPI’s like TC, PC and take an informed decision to move from trial and onboard a platform organisation wide and get into a long-term contract with the software provider.
After a year of hard work, on 1st June 2022 Peri has launched an affordable, do-it-yourself, free to try (for 90 days) Sales force automation (SFA) and Distribution management system (DMS) for Indian FMCG companies and their distribution partners of all sizes (start-up or an established brand), all selling models (General or Modern trade or Van sales) and all stages of digital preparedness (first timers to deep tech know-how).
What to do Next?
If you are part of an Indian FMCG company, we request you to visit this link Peri Free Trial Signup, spend 30 seconds to sign up, and follow our 7-step Activation wizard to get up and running with one of India’s most innovative and loved SFA and DMS platform and test our super-easy, beneficial and best-in-class features which are designed keeping in mind a typical Indian sales organisation like yours. You will be amazed to see how simple things like pre-configured Sales hierarchy, product catalogue, General trade concepts like beat, TC, PC will help your organisation get digitised in a matter of days with a gradual shift towards creating employee productivity, increased revenue and optimised costs.