IT Must be a Strategic Input to the SMEs Apart from Support Tool

IT Must be a Strategic Input to the SMEs Apart from Support Tool

We spoke to Nirupam Chaudhuri, Regional Director, Eastern Region NASSCOM, about the numerous technology and business obstacles in the Indian SMEs and how the organization is helping the smaller companies to adopt suitable technologies.

Established in 1988, NASSCOM is a non-profit organization and is a global trade body with over 2000 members, of which over 250 are companies from the China, EU, Japan, US and UK. NASSCOM's member companies are in the business of software development, software services, and software products and majorly works with IT and associated areas. “Bigger Indian IT companies like Wipro and Infosys were also start-ups during the earlier days and from that time NASSCOM is working with them. We also do lot of marketing for IT in the globe and for lots of SME companies,” said Nirupam Chaudhuri, Regional Director, Eastern Region NASSCOM.

Business and Technical Challenges

For majority of the SME organizations in India, IT still acts as a support function. “For SMEs this is an age of extreme competition. For various verticals like manufacturing, retail, or in some other micro-verticals there are many guys who are working in the scattered market. For them it is a big business challenge in getting market shares in the business and to expand the business at the same time is also the major hurdle,” said Chaudhuri.

Nowadays, technology supports a major part of the business and the verticals like retail, healthcare, manufacturing and BFSI leverage IT where technology is supposed to help their strategic session. “For bigger organization IT is not just a support tool it is also a major strategic input to the organization whereas for a smaller organization IT still hasn’t reached that level,” said Chaudhury. For example a big organization utilizing ERP and a small company with 10-15 crore profits in a year using ERP makes a lot of difference.

Another huge technical obstacle for SMEs is low budget. If they are supposed to purchase major advanced technology like data science, analytics or some major security solutions they fail to do it because there are no investment in their organization. They are not aware which technology would prove to be beneficial for their business. Therefore, deciding ROI for those kind of system is not easy.

Tackling the Challenges

“The CEO or the owner of a small organization must accept the fact that there are lots of challenges, which they basically don’t recognize. They must list down the major challenges and must prioritize them by hook or by crook,” remarked Chaudhury. “The most important aspect is that if I am a CEO of a company and if I need to sort out few things I need to prioritize them within one year,” added Chaudhury. A company that is into exporting has to make sure it is having all the standard processes, it has to have a great website and to have good sales people who can speak impressively.

Helping SMEs to leverage IT and business growth

“Basically our members are solution providers. We also do lots of IT sessions for end users and tell them why IT is required. It is not just a support tool, but it is also a strategic tool and it can help them,” said Chaudhury. Each of the areas, each of the technology buckets, BPM or IT services, networking or hardware NASSCOM does focus sessions, held major events, and they also help start-ups to grow. Then for skilled development or supporting initiatives, NASSCOM is working very closely with NSDC and also work closely with all the governments. They also have a division called GTD- Global Trade Development where we take SMEs as a team and go to overseas various places like Germany, middle-east. The GTD team helpsSMEs to grow and makes them aware that business can be done successfully in the abroad also.

Level of IT usage among SMES

It actually depends upon SMEs to SMEs and the area they are into it. Maturity of a BFSI SME (technical) is better than typical non-important, non-critical manufacturing entity. A guy who is manufacturing cement representation and usage of IT is different from a guy who is selling high-end financial solutions. “Having said that if you compare some advanced geographies which still have some catch-up to do what helped them in the last few years is lot of influx of digital technologies, like digital marketing, digital tools, usage of social media. You know these are affordable solutions. With those technologies coming in life and business became bit easier for SMEs,” said Chaudhury. Therefore, the large enterprises have huge governance teams, they know what they are investing in, they have complete budgeting system and that completely lacks in smaller enterprises. They don’t plan much, if something is essential they will simply buy that without any thought.

What should be the awareness level of IT among SMEs

“The awareness level is average at the moment and that’s why associations like ours and others hold lots of sensitization and awareness workshops,” remarked Chaudhury. “Now, there are certain technologies which people are aware of, but if I talk about block chain technologies or high-end big data systems, all of that might not be necessary for SMEs also,” added Chaudhury. So, there are two parts like one is awareness sensitization, second is actually what is necessary because SMEs don’t have big pockets.