SAP’s RP unit eyes double-digit growth this year

SAMAL ISLAND, Davao – In contrast to the five-percent drop in total revenues in its global operations last year, software solutions provider SAP AG is looking forward to a double digit growth rate in its Philippine operations.

SAP is one of the world’s leading software providers with over 50 subsidiaries worldwide. In the Philippines, it is represented by SAP Philippines.

In the past few years, SAP Philippines registered high single-digit growth in terms of revenues, and it is looking at a growth of over 10 percent this year. Part of its optimism is the outstanding growth registered in neighboring Vietnam.

SAP Phils. is part of a three-nation formation which includes Indonesia and Vietnam. It is headed by Krishnendu Datta.

Datta said in a briefing that the global software provider is unaffected by the short-term developments in the three Asian nations which are all scheduled to hold their respective national elections.

In the Philippines, the May national elections are affecting the expansion plans of most multinational companies. SAP however prefers to view the electoral process as short-term.

"Lont-term investment decisions are not affected by year-to-year business conditions but by strategic opportunities," Datta said. However, the dampener for a faster growth pace is the ability of the Manila government to offer more incentives for foreign firms wanting to do business or expand its enterprises.

"We see a market turnaround and we know how to weather storms while reducing costs and increasing revenues," he added.

SAP Philippines services 60 of the 100 top corporations in the country, including San Miguel Corp. and Ayala Corp. Other existing sectors in its existing client base are in the retail and telecommunications.

"We will be expanding our services with our existing clients while expanding into new areas in the financial, utilities, health services, real estate, as well as the small and medium enterprise sector," the SAP country manager said, adding that it is servicing 120 RP-based entities.

Its consulting business grew by 12 percent covering 14 projects including Nestlé Philippines and Singapore International Airlines.

It is also looking to expand or introduce its services to the government sector. However, it sees a snail’s pace growth rate as the public infrastructure would still be recovering from the costly electoral process.

The Philippine operations are also poised to expand to the Vietnam market. The Indochinese market had already registered the highest growth rate among the three-nation subsidiary.

It reportedly invested over $1 million last year, and it sees greater expansion in services and consultancy business in the fast growing market in Vietnam. "Their government has been offering more incentives to foreign companies doing business."

In Bangalore, India alone, SAP invested over $180 million in a span of three years.

National governments like the Philippines must gain the confidence of the (international) market before they can realize significant direct and indirect foreign investments, the SAP country manager added.