Indian SMEs adopting IT – who is driving the trend?
Without any preamble let me put it directly - at the macro level NO ONE Really! In the micro level a few ambitious Small enterprises are adopting IT and in that few, only the minority reap benefits from adopted IT.
This small minority makes a considerable impact on the IT industry’s overall revenue from the domestic market adding excitement to IT firms and media on the growth of enterprise applications market in India.
The Myopia: Growing market size for IT products is a direct result of SMEs adopting IT.
The fact: Growing market size for IT products is a direct result of a microscopic fraction of the small sector adopting IT.
What about the rest - the SME majority. They are far from right IT adoption.
Initial indications from our recently commissioned SME – IT survey proves my above comments.
Why do the majority still stay away from IT adoption? Good question. This is what I have to say.
1) They do not want transparency – Not really an IT problem …
2) No one to guide them on IT adoption
3) IT salesmen are the wrong ones to guide a small enterprise on IT adoption – at least many
are not trained to handle a small enterprise.
4) Lack of drive and determination from the management – CEO
5) SMEs fears and feel shy and go into a shell - when IT salesmen use management jargons
and technical terms to show up there wisdom ( Remember if you show up you will throw
up)
6) No plans to grow – let me run my firm as long as I can…..
7) We tried – paid through our nose and burnt our hands …
8) Confused …which vendor to select – everyone down the road nowadays is an ERP vendor !
Some says 2 lakhs …others 50 lakhs ??????
How should we drive IT awareness among SMEs? Here are my suggestions and comments
1) “ By IT firms – through educating SMEs”
Comment: (Remember education is not sales presentations, cocktails and dinner)
IT firm apart from their sales team should have a SME mission team who instead of sitting before their PCs and Laptops move around from morning till evening in industrial areas, meet SMEs - talk to them (80% listening 20% talking) have Chay with them in the local tea shop, love him, learn from him……discuss and give digestible Gyan
2) “SMEs should drive it themselves – it’s for them to realize…”
Comment: Bad suggestion. If your IT organization pays you till your market realizes about the need for your product, enjoy that luxury.
3) “Media should educate them”
Comment: 100% I agree their role. Unfortunately Tech magazines like PC world, Chip, BenefIT etc are hardly read by SMEs in the manufacturing sector.
4) “SME associations and Clusters”
Comment: They should – but they have lots of lobbying and politicking to be
done rather than educating their members ( There are exceptions however…..)
Let me end abruptly. Please let us have comments/suggestions from all
Vinod Menon
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10 comments:
nice blog
SME is too a general term. What you meant by SME ? turnover ? Number of employees ? ..The adoption is related to the size of the firm if I am right. A firm with a turnover of 300 crs could be a medium compnay. I think compnaies of this size have fairly good IT infrastructure.
Primary responsibility is with IT sector: IT sector has both technical and the functional people. IT sector has also drawn people from Industry. So they need to take the lead.
1. They need to understand the SMEs. Each of them are (think) different, though they are not.
2. IT industry need to have a SME strategy. Technical jargons, BIG NO. Functional experts, who has hands on experience has to drive this initiative. Investment, infrastructure, organizational preparedness (CEO and others), Training & rollout, ROI to be explained to them in detail. Selling for SME is not only the sales man's job. If it is left to the sales men, they will promise the moon and take the cheque and P.O and disappear.
3. IT industry may need to approach them through their association for a cluster development. This would prove to be economical and workable.(3 Hrs presentation Big hotel, Dinner, Cocktail etc.,. is only a feel good effort, may not give results)
4. The product or service to be matured to the extent that no customization is required.
5. Proper schedule, people and time lines to be drawn like ISO implementations. To be closely monitored. Not to leave anything subjective. This may derail the project. Project over all time frames not to go beyond 3 months. SMEs cannot wait and they will loose interest.
6. The project is not over till the ROI to be shown to them and to monitor and nurture them like any agricultural projects.
Looks tough, but big money is there. It is like any treasure hunt. The process is not pleasing, but the results are yes.
I believe, it's the lack of compelling applications that prevents massive IT adoption. For instance, in China, a lot of small companies (with staff as little as 10) use technology-intensive companies. It's so because, more than 70% of them have global tie-ups. either they are suppliers, intermediateries, etc to companies in US, UK, Japan, Korea. It's become sort of mandatory for chinese companies irrespective of their size to use technology for ease of operations. This is lacking in India as SMEs here are yet to get on to global trading. But I guess, that's fast changing:-)
Sunita has put in a valid point..another driving factor for SME's IT adoptin can be when a large IT adopted firm asks it's ancillaries to go for IT to be online with them. BHEL Hyderabad has asked its 200 ancillaries to adopt IT !
Clasification of companies under SME is difficult and has varied opinions from different organizations. Some clasify with the number of employees and others with the turnover, but we feel it should be from the level of IT implementation in an organization.
The issue in ICT enablement with SME is inability of the Indian IT Industry to create and model a ROI for the SME's.
Assuming the Export Oriented Manufacturing SME's might have decent requirements to IT enable, how does one go about building a ROI for them? What are we solving - new sales, better floor utilization, improved productivity.. these are answers to be shared with SME..
People should read this.
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