Introduction
ICICI-Infotech
has developed a well-earned and respected reputation in the Europe, Middle East,
and Africa (EMEA) region of the world. Now it has set its sights squarely on
the North American market. To reach this target, ICICI-Infotech has developed
an intriguing strategy to attract new customers. This research note explores
this strategy to assist you in determining whether ICICI-Infotech and its enterprise
resource planning (ERP) offering, ORION, makes sense for
your company, deserving a closer inspection and careful consideration.
After
providing some background information on the company, the strategy is examined
from the viewpoint of its market focus, customer focus, and innovative pricing.
You'll see how pricing, both for software and professional services, is critical
to making this strategy work and is the underlying foundation for the other
two components. The research note concludes by discussing the challenges facing
ICICI-Infotech and presenting user recommendations.
Under its customer strategy, ICICI-Infotech's ORION offering is particularly attractive to companies who are not making their initial foray into enterprise-wide software. Implementation experiences gained throughout the world have taught ICICI-Infotech that young, maturing companies cannot take full advantage of features, functions, and integration provided by the full scope of the ORION software. This does not mean the company will turn away these prospects. However, customer expectations must be carefully established. Again, this is why ICICI-Infotech is targeting companies migrating from legacy systems or software that is simply out of gas.
ICICI-Infotech's customer strategy understands that the workflows and procedures for SMEs are as complex as those of large enterprises. However, what differentiates these two classes of companies is the volume of data processed. As you will see, ICICI-Infotech's customers need the ORION software to manage the complexities of their businesses. But they do not want to be charged at the same rate as larger companies with greater data and, therefore, more instances of processing.
ICICI-Infotech employs processor-based pricing for ORION. While traditionally reserved for hardware manufacturers, under the processor-pricing algorithm the customer and ICICI-Infotech jointly scope out the size of the server hardware needed to satisfy the processing requirements of the business over a four- to five-year period. Accordingly, using a software-pricing model grounded in a per-processor basis is simpler than pricing on a per-user basis. Vendors and customers don't have to constantly keep track of how many employees, partners, and customers are using their software or whether users are concurrent or not. Furthermore, they are not restricted to the initial allocation of end user licenses as the software gains wider acceptance and utility. Additionally, while a customer gets all of the ERP modules up front, if the company will not be using a particular module, say consolidations or field maintenance services, the processor is sized and priced accordingly.
While kinks may still need to be worked out to try to satisfy every customer, ICICI-Infotech is approaching a pay-as-you-grow model. Such a model can be particularly attractive to SMEs who don't need each and every ERP feature and module on day one.
ICICI-Infotech bolsters its subroutine-like architecture for enhancements with extremely competitive pricing on two fronts. First, as typical with many software vendors, enhancements with general applicability to a majority of users are completed on a no- charge basis and, then, become part of the baseline software. Whether your business can wait on the vendor's time schedule is another issue altogether and requires further negotiations.
Secondly, ICICI-Infotech leverages the fact that its development centers are located in India where the cost of living and wage scales are lower than in other parts of the world. This means that the company's internal cost of developing an enhancement is also lower. ICICI-Infotech then passes these savings onto its customers in the form of lower hourly rates for development that are, on average, 50 percent less than rates in the United States. Of course, customers must overcome the emotional issue as to whether they are comfortable with the fact that their support group may be located halfway around the world. The reduced costs can help alleviate the discomfort. Be assured that ICICI-Infotech has a group of developers based at its New Jersey headquarters. However, the major development efforts come from India.
Because of ORION's ease of deployment, ICICI-Infotech argues convincingly that its implementation costs are lower than implementing ERP packages of comparable scope in organizations of similar size. Whereas the industry ratio of software dollars to implementation dollars is typically $4 or $5 for every dollar spent on software, ICICI-Infotech has brought this down to the $3 or $2 dollar range.
When you combine its processor-based pricing, lower than average development costs, and ease of rollout, ICICI-Infotech offers an attractive pricing option that should intrigue prospects into taking a closer look.