‘Show Us the RoI, and We’ll Buy’

by December 8, 2015 0 comments

Nagpur enjoys the unique geographical location of being at the centre of India, and as a result is well-connected to the other major cities of the country. It has a good mix of small, medium to large industries, catering to a range of verticals such as light to heavy engineering goods, plastics, iron forging industry, mining and metallurgy, chemicals and pharmaceuticals, and so on. The SMEs that form part of the NVCC face broadly the same problems as faced by other SMEs across India. A challenging business environment, stiff competition, power outages, lack of skilled manpower and a higher than normal attrition rate amongst the existing manpower working at production units.

Prakash-Mehadiya President, Nag -Vidarbha

Prakash-Mehadiya
President, Nag -Vidarbha Chamber of Commerce

The business challenges before SMEs
Being well-connected with other industries in India, the city’s small and mid-sized companies are not immune to the sluggish economic environment that affect both supply and demand elsewhere. The world outside uses a lot of IT in their business processes and elsewhere in India also there are industrial townships that have upgraded their business processes to bring them at par with those followed in the west. Nagpur, through its various MIDCs, still has a lot of catching up work to do. Getting the most out of the existing resources, both living and non-living is a universal challenge and was rated at the topmost challenge by the Nagpur industrialists as well. So, while they fight for survival and try to remain competitive, spending on new technology takes a back seat. As Mr Mehadiya pointed out, “We have multiple vendors coming to us with new and innovative solutions, but we get confused over what to buy and more importantly which solution is more relevant to our needs. We might want to modernise our setups but unfortunately our budgets are limited.” And wherever IT is used aggressively, training is a big challenge. Most of the staff is still from the traditional, manual setups and take a longer time getting used to technology, unlike the younger generation. Another key challenge is corruption. Corruption in the bureaucracy impedes any strides towards making the industry clean and to declare revenue openly through IT software. All said and done, getting the smaller companies to shore up resources and making them spend on IT is no mean task. The IT infrastructure in use across SMEs varies with the type of vertical. For instance, pharma setups are more aggressive investors into IT as they have to maintain compliance standards both for the internal market and even more so while exporting. This is in constrast to say an iron forging industry where one can still find a 10-year old desktop PC on the CEO’s desk!
What the industry expects from IT vendors
Discuss the RoI in black and white. They might not be tech savvy but still constitute the biggest market for all IT vendors combined. So, come up with small but innovative IT solutions and implement them in parts in a company. This shall take care of costs and tight IT budgets, and also make SMEs more receptive to new technology on offer. That way not only shall modernisation of old industrial setups happen but also the industrial processes could be made more efficient. Mr Mehadiya and his team were appreciative of the efforts to increase IT awareness through the BusinessNow Express and wondered if such initiatives in future could be taken further deep inside the state to cover rural areas as well.
Enterprise mobility came up as a hot topic of discussion with the association members who felt more economical portable devices with efficient business solutions should be introduced so that executives across SMEs could be able to afford them.

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