A Small Step by an SME Owner...a Giant Leap for Economy

Sameer Mathur, Consulting Editor—PCQuest and MD-SM Consulting

This, we feel, is a good beginning. The first step towards bringing about any change in how organisations are managed, is the intent of all the major stakeholders. Once the intent or desire to bring on change is there, we strongly feel that the first bottleneck to adopt technology has been cleared. One could almost claim that that’s half the job done. Once the message, that there is no survival unless the organisation changes itself, adapts itself to the massive changes going on around the world, has been understood and appreciated by the concerned stakeholders, then only the process of successfully adapting technological changes can happen.

Not only does the management need to be convinced about adapting the right systems they need to convince the employees too. We have seen many projects, undertaken with the full approval of the top management, fizzle out, within a few weeks as the second line managers were not convinced of its usability within the organisation.

The lack of interest or the fear of adopting technology, we feel is becoming a big bottleneck in the overall growth of the SME sector. A recent study monitoring the MSME Sector indices was conducted by IFC/World Bank in 132 countries. This rated India poorly in terms of entities growing from Micro to Small to Medium scale. A very high percentage of Micro scale entities in India continue to struggle. Here are some other startling facts about SMEs in India:

- There are more than 45 million small enterprises

- Over 95% of these are proprietorship/partnerships

- The above ensure little or negligible access to institutional finance

- More than 70% employ 50 people or less.

In contrast one of the most developed economies today, China, is increasing its focus on the development and growth of this sector. Let us try to illustrate the above with few figures of how the Chinese are going about in enabling their SME sector towards the growth path:

- According to a report, Small-medium sized enterprises (SMEs) contribute 60% of China’s industrial output and create 80% of China’s jobs.

- The Chinese government’s 12th Five-Year Plan contains a key strategy specifically in support of SMEs. According to the plan, the total number of China’s SMEs will grow steadily over the next five years and achieve an average annual growth rate of 8%.

The ministry of MSME in India also runs some very innovative programs on development amongst this sector, but the most of the SME’s we have come across are ignorant of this. Most of these programs are listed on the website of the ministry. This month we plan to highlight some “baby steps” or initial ideas on how SME owners can initiate their entry take into the amazing word of technology.

Website

It is of utmost importance for every SME to have a proper and fully updated website. Think of this as an activity which shows the SME’s face to the world. Update the website regularly, with achievements and highlight past performance. Too many SME owners treat this lightly and majority almost never update for years together. On the other hand we come across hundreds of success stories of SMEs generating new business just by positioning their website in the right manner.

Email solutions

Almost all SMEs have started using this facility for their communication. SMEs should use their own domain name for emailing facility rather than using some public domain. They should also learn the “basic rules” of email communication, or “email etiquettes” as they are nowadays referred to. Email communication is quite different from other modes of communication. This is especially critical for SME which are doing business with other countries.

Basic security features

Majority of the SME owners we interact with have an unknown fear discussing about their IT security. We suggest the basic understanding and appreciation of the concept of IT security, acknowledging the gaps and the solutions being offered by the vendor.

Get introduced to the concept of Digital Marketing

Almost all SME would like to get on this bandwagon but are not sure how to start with this and where to go in times to come. Again we suggest SME owners not to treat this as some unknown demon and to understand the pitfalls and the advantages before going down this path. They should remember that the Digital Marketing Consultant hired for this job is probably carrying just a year of experience. To summarize, we suggest the SME owners get involved in the expectation setting exercise and appreciate the results.

Some other pointers for the SME owner planning to adopt technology

Outsourcing the IT function does not mean the onus of running the IT has fully been shifted to the concerned department or the vendor. SME should realise that the outsourced IT Vendor or the in-house IT team has little idea of the overall business goals and very few can actually relate the investments in IT to the companies long term goals. Even if the SME owner does not understand technology, they should try to relate the whole exercise to their business goals:

- Clearly define the goals and manage expectations

- Listen to experts and learn about how their peers and competitors are doing this.

- Try to understand the usage in the concerned industry verticals

- Appreciate the fact that IT is an ever growing industry and it is only a tool to achieve your ultimate business goal

As far as possible do not be fully dependent on the outsourced vendor. Learn the basics of what is happening in terms of the solutions and try to get involved. From a SME point of view, probably the biggest challenge is to grow the existing market as well as to enter unexplored territories. It means channelizing existing resources, including appropriate technology resources, to create products and services that customer buy happily at a significant lower prices. This should not translate into cutting corners in terms of quality or providing inadequate services. As they say there is No Escape from adopting technology, by the SME, and to use this as a tool for its growth.

So, a small step by the SME owner... is indeed a giant leap for our economy.