Sensing a market of at least 100,000 companies, some Indian software companies have come up with affordable branded solutions.The latest brand that will hit the Indian ERP market for the SME segment is the Matrix ERP solution developed by the Calcutta-based software company, Matrix Infosystems Ltd. The product will be available from February next year at a price price range of Rs 7 lakh to 12 lakh.

The company has already started the process of marketing the package and according to the company, companies like Khadim and Emami have decided to implement the solution.

Said Mr Alok Agrawal, managing director, Matrix Infosytems Ltd, "Our product is for the SME segment which will help the small enterprises to put all business functions in an integrated platform and connect the business needs with the Internet world. But why is it that the SMEs suddenly seem to need ERP solutions?

Said Mr Anil Bakht, managing director and chairman, Eastern Software Systems (ESS), the developer of the web-enabled ERP solution Ebizframe, "The coming of the big multinational companies has forced their suppliers and distributors to automate their business process. Time has arrived where the SMEs' survival depends on how quickly each of the companies integrates their functions with the whole operation and the Internet."

Industry observers also feel that another important reason why ERP is becoming popular in the SME segment is the sudden importance of customer relationship management (CRM), supply chain management (SCM) and B2C in the business environment. Unless the whole operation is integrated, no information will be there to run CRM or SCM.

The market needed an ERP solution that will have all the functionalities required to run an operation in the tradition of best business practices. At the same time, the price tag should not scare away SME entrepreneurs opting for ERP.

The result: Indian packaged software companies whose activities till now were confined to accounting have entered into the high-tech world of ERP with a price tag ranging from Rs 8 to Rs 12 lakh. Indian brands like Maarsman, Evolus and Ebizframe are said to be involved over 500 sites to implement the ERP in the SME segment of the Indian market. Matrix itself hopes to earn Rs 12-15 crore from the ERP solutions market in the coming year. When ERP came to India, the market was dominated by Dutch major Baan, Oracle of the US and its German rival SAP whose software and implementation cost would run into few crores of rupees and whose clients were large Indian and multinational companies.

The ERP giants never felt the need to work out small-budget ERP solutions for the Indian SME segment and local software entrepreneurs stepped in to fill the gap. Mr Agarwal of Matrix said these big software companies always assumed that Ford and its tier one and tier two suppliers will need the same kind of solution.

"The ERP solution for a company like Ford would be a complete misfit for its suppliers. The two company's requirements are different. The two important factors to be considered before any ERP implementation are size and complexity of operation," said Mr Agrawal.

However, the big operators seem to have woken up to the possibilities in the SME sector. Some of them are offering individual modules at prices not to steep for smaller companies.

"Companies like Oracle and SAP are going for single functionality sale. For example, Oracle is selling its financials to the SME segment but the package will never take care of needs in areas like supply chain, B2C and CRM," Mr Agarwal said.