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SAP Journey with GST

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SAP has came up with GST offerings which gives enterprises an opportunity to get GST ready in 100 days on a hosted cloud model. 

Has the industry been taken by surprise on the GST regarding the technology readiness which is required?

Companies who are listed in India, that is about 10-20% of all enterprises and have statutory regulations- these enterprises have been preparing for GST since last 6-12 months, at least. For these companies, it is not just about getting themselves GST ready; it is about their tier one/ tier two suppliers to get GST ready. It is also about their customer contracts and internal processes being updated. We are aware of these facts because A) a significant portion of corporate taxes in India are paid by an organization’s customers. B) As a philosophy and a policy, ever since we started our operation in India, we have tried to ensure that our business solutions are statutory compliant.

SAP started its GST journey way back in November 2014 and six months ago, we created GST awareness workshops. We realised that many mid-sized businesses and SMEs and MSMEs across the nation are the ones that needed education and hand-holding. We went to 21 cities for our GST health check drives and also launched specific GST solutions for their benefit.

What are some of the biggest challenges that you see with respect to gearing up for the GST? What are some of the challenges that you have experienced while working with large organisation?

Large organizations usually have multiple suppliers. But not all suppliers will be GST ready, which is a threat to these organizations, as well as to the suppliers. Some of these big organizations have taken a very principled approach and are willing to not work with suppliers who aren’t GST ready. This will push a lot of tier two and tier three suppliers to become GST compliant. Also, large organizations have worked on their fallback options, so technology readiness or preparedness won’t be a big challenge. It is more about the preparedness of the ecosystem and to see how it operates altogether.

What you will say about the SMBs and MSMEs and their issues/challenges?

For SMBs and MSMEs, GST is more about the awareness of moving from an informal sector to a formal one. But everybody is seeing this as a tax problem, which isn’t correct. SMBs need to check their level of readiness, awareness and what kind of advice they are getting to be technologically ready, not just from compliance perspective will be the key factor. There will be some transient revelations by some of the evolved ones as most of them are entrepreneurs and they learn fast. Every industry has a big network. SMBs will find out what their peers are doing, and then adopt that. It’s a cascading effect and there is a bit of a learning curve. It will take a while for the SMB sector to adjust but there is nothing to worry about as the government also has given a phase-wise GST timeline. We can expect some adjustment issues, especially when it’s a huge ecosystem like India, but it will be a bit of learning curve.

 As per the SAP perspective, how big is the GST business opportunity?

It’s very difficult at this point of time to quantify but it’s a significant opportunity. We currently have 8500 customers in India and due to GST and other digital initiatives; we believe we can have almost 100,000 SMEs as customers in the next few years. We have actually productized our offerings, like ‘GST in a Box’, as well as a Digital Compliance Service for GST which is a cloud based online app for which we are seeing a tremendous response not just from SAP customers but also from non-SAP customers.

We are offering enterprises that have absolute manual or home-grown systems, an opportunity to get GST ready in 100 days on a hosted cloud model at a very minimal fixed price per month. For the enterprises that already have their systems and processes in place, we have come up with an ASP solution. They can leverage our ASP solution to hook on to any GSP and get compliant. All of this is part of the first phase.

We also have very specific and customized offerings for digital supply chain, as well as for ‘Omni-channel commerce’, that is to improve the enterprise’s customer experience. Our solutions and platforms are ready and it is a significant opportunity for us, not just now, but in the future too.

SAP has got 30 GST solutions centres, so how do they work and what’s been the response so far?

Our GST Solution Centres are in collaboration with our partners and each of our partners is ready and enabled. How these centres work is, our clients walk in for the GST awareness and readiness checks. Basis their readiness and awareness levels, we show them how the entire process works- from how the data gets uploaded to how we tackle the various steps of the process. At the same time, we have a methodology by which these companies can become GST ready in 100 days. We do a lot of online and digital marketing done through our partners to reach our potential clients. They get to know that a centre is available locally and then just walk into the centre.

How is your online GST training program progressing?

We have created a GST portal (sap.com/India/Simple GST) that guides interested parties to our SAP solution centres and our various partners who can educate and guide them. For companies that have already gone through our GST portal, we have a 24/7 helpdesk support for all our customers. We are completely ready and kept our helpdesk ready. Not everybody will be able to apply those formats smoothly, but the good news is that there is a GST council within SAP where we collaborated with For instance I have leveraged our user groups. We have a very active user group called INDUS.

 Have your partnered with various integrator and the channel partners?

Yes. Integrators, channel partners and cloud service providers like Amazon. Ours is an Opex based model instead of a Capex based model. In India, SMEs usually don’t have an allocated budget for technology. I see the GST implementation drive at a macro level- it is a huge drive towards digitalization as well because almost four to five billion invoices will be generated online every day. It’s huge, one of the largest digitalization efforts in the world.

What’s the kind of working relationship you have with GSTN?

We collaborate on the upcoming formats as well as with many of our customers and we’ve had a very positive response. GSTN have been very participative as everyone’s common goal is to try to make the transition as smooth as possible.

Is that the communications infrastructure in the country today required for the GST to roll the GSTN itself?

 Today, we don’t need broadband and VSATs and leased lines. As long as there’s mobile and data connectivity, data can be even uploaded in a batch format. It need not be a fully 24/7 online service. Uploads can be done at the end of the day. Even for SMEs, it will all be at a concentrated level, not a multiple office level. I don’t think that infrastructure will be a challenge in India with the tele-density and the mobile network 4G coming in, but we’ll never really know till it is tested and put to use.

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