SAP Journey with GST

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.

What would be your advice to organizations which are gearing up for GST? What are some of those few things that they need to keep in mind when they select a GST implementation partner or GST technology partner?

 We don’t look GST from a compliance or regulatory perspective. It’s an opportunity for a single market. Organizations need to relook at how their operations are done. This is a great time to automate and digitize organizational operations. It’s a great time to expand the business and improve customer experience. Earlier, technology used to be the distant support system but today, technology is the business. Organizations now will need to have a separate budget and manpower for IT.

What’s happening on GST Suvidha Providers on front?

Many companies have been listed as the GST Suvidha Providers and it’s a great opportunity. We have created the ASP application for SAP and non-SAP customers, through which, they can log on to any GST Suvidha Provider. While we have announced a specific tie-up with Reliance where they would bring in their GSP capabilities, we are also interacting with all other Suvidha Providers to help them and their applications.

Is there anything about this GST which can really makes you anxious and little nervous about this?

For every company and even with the authorities, it is like exam time anxiousness. The good news is that the policy makers have already thought this through and have given a complete timeframe because they also know that for a vast country like India, it’s not going to happen overnight or in 30 days and without problems. It will require participation, collaboration from the government, from companies, from the GST agencies, solution providers- everybody to be able to collaborate and come to a mutual solution, because it’s a humongous opportunity to be automated and it is not an option if it doesn’t go right, then there’s a huge impact on the economy as well, let alone individual companies. There will be lots of talks about whether it will be stable, whether the platform will be user-friendly, etc.

The concern there would be likely to have an impact on jobs?

One of the promises of this government is to create new jobs. In fact, to support the government’s initiative of Digital India, we launched a program in participation with corporate called ‘Code Unnati’ last week. This program is not just about digital literacy, but more about creating employable opportunities by making Indians digitally literate. We have partnered with our customers ITC, L&T Public Charitable Trust and six NGO partners including UNDP, Agastya International Foundation, NASSCOM Foundation, HOPE Foundation, Samarthanam Trust for the Disabled and Pratham Infotech Foundation to take this initiative forward.  We had recently conducted a similar program successfully in Africa called ‘Africa Code Week’, wherein we created half a million employable opportunities across 30 countries in the continent.

Our objective is to conduct three full levels of digital training programs for the youth, which will make them employable. Children, women, differently-abled citizens will also be trained under this program. This is a first-of-its-kind campaign. There are 1000s of digital literacy programs already in the country, but what makes Code Unnati stand out is that unlike other programs where free laptops and basic training sessions are given out, Code Unnati goes far beyond that- it helps create employable opportunities especially in new areas of the industry. Like many nations with digital economy or Industry 4.0 that we’ve seen, there are jobs that would possibly get automated in the future. But at the same time, a lot more new jobs will be created. For example in India, Uber and Ola made the business of cab aggregations easier. While it may have affected the jobs of kaali-peeli taxis, it did create numerous employment opportunities for skilled drivers. And these drivers did not go through any formal classroom-style digital education, which may have probably failed. They learnt the digital part of the business through touch-and-feel experiential learning. The format and the pedagogy are completely different. Similarly, businesses like Flipkart and Amazon in India created almost two million entrepreneurs who in turn, will employ almost ten million people in the coming years. And it’s the same story in healthcare, education even e-retail; these sectors are going to create a significant amount of career opportunities, perhaps even more in the core sectors.

In the western world, we have seen smart manufacturing, digital farming or 3D printing with automated processes. On one end, this made a few jobs redundant but at the same time, they have created far more new opportunities. So unless both go hand-in-hand, it will continue to create employable opportunities. For a young economy like India’s, this will also create a significant challenge. And our effort is to get the corporate sector to collaborate and rise to this challenge.