SME City

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Enterprise Application for SMEs in India context
Vishad Rahangdale
Vishad Rahangdale
Chief Information Officer, Electrotherm India
A hardcore IT strategist,with sixteen years of extensive experience in Steel, Capital equipment, ... more>>
Post globalization, if any segment that required being most competitive was SME’s. And challenge was bigger for the simple reason that SME segment more or less being unorganized. Processes, automation and IT usage was at bare minimum level. The reasons could be manifold, such as limited market reach/competition, monopoly business or these factors may not be prominent drivers.

Globalization broke the boundaries not in Indian geography context but competition was with the global players. Actually it changed the rule of the game and field as well. For survival, there was no way out for SME players but to adopt/change ways of doing business irrespective of the business segment they are catering to. Innovation, process efficiency for survival became the buzz word across.

Fortunately, it coincided with IT revolution that was happening in India and across the world. Everyone was trying to embrace IT solutions. Some embraced with herd mindset some used it mindfully. Those with herd mindset miserably failed while deploying IT solutions. Their IT investment drained down without any return, rather it complicated the case.
If we try to do soul searching as to why it failed.

Few points that come to mind are
1. Inadequate knowledge of IT
2. IT as a support function, no consideration that IT should be part of mainstream function
3. IT is untouchable, few IT people to man it
4. Too much of expectation, it will take out all pains
5. No clarity on what IT can deliver
6. Selection of IT solutions and keeping pace with IT evolutions

Some enterprises actually approached in a very structured way; in fact they integrated IT into their business plans. Most of the failed stories are due to adhoc decision making in IT.

Here are few critical points which I learned from my experience that perhaps would be able to help SME’s to drive value.
1. IT Roadmap
2. IT Policies
3. Categorization of IT services
   a. IT Infrastructure – Data center, Connectivity (LAN/WAN)
   b. Enterprise Application (ERP, Messaging, CRM, SCM etc.)
   c. Desktop computing & support (hardware, software &   helpdesk support)
4. Alignment of IT with business (Making IT mainstream function)
5. Evaluation of right technology (fitment with business requirement)
6. IT Budgets (Accountability of IT investment)

Let us deliberate each in brief:
1. Why IT roadmap: IT must be integral part of business growth plan. Manifestation must get demonstrated through business plan. It will help business to identify how IT can play effective enabler role while executing business growth plan. It will also guide business to evaluate IT solution to address requirement specific to the business growth plan. Above all it will provide blueprint for IT deployments and bring stakeholders on the same page as far as IT deliverables are concerned. This will also bring transparency in the business.

2. Why IT Policy: IT provides humongous opportunities, but it cannot work in scattered fashion. IT governance is mission critical and uniformity across the board is essential ingredient to gain control. Data losses, pilferages etc. must be arrested. Uniform user experience also helps faster adoption.

3. Why to categorize: To make services more focused and accountable it is essential that services must be categorized. This also will simplify technology evaluation in sync with the business requirement.

4. Alignment of IT with Business: Democratization of IT decision making is pivotal factor to align IT with business. What is exactly required to be done to enable every business process so that it runs effectively. Unless micro level assessment of requirement is carried out, perhaps we will be falling short of deliverables vis-à-vis the requirement. This gap would aggravate over a period of time and there would be little scope to fine tune at that stage. The only option left could be redo the whole thing. Very purpose of IT deployment is defeated from the top.

5. Fitment should be the key parameter while evaluating IT solutions. Irrespective of the market popularity of the IT solution, business must look at what is best to suit for their requirement. However, it is also important to see future of the solution in terms of technical support and cost of ownership of the solution. Availability of resources in the market should not be ignored.

6. Generally, businesses invest to achieve growth plans but they tend to ignore IT investments. They calculate return on capital investment on plant & machineries, but sideline ROI on IT investments. Hypothesis must be built like; in particular process if IT is used then it should save so much of time/cost if it is done otherwise. This appears theoretical, but it is achievable. It will actually provide visibility at the top and justification to IT investment.

SME’s by nature are very cost conscious and why they should not be. Can every SME afford independently IT investment or is it justifiable to pour so much money into IT.

Here is where, SME’s should look at the options available in the market. There are multiple options like cloud computing. They can identify which are the services can be hosted off-premises and on-premises. Thorough cost calculation should be carried out while assessing this also without compromising security aspect.

Another option that can be explored like syndication of IT services by forming a cluster comprising of similar business SME. It will help to reduce initial cost and better security controls. Everything is on shared basis thus opex also come down drastically. Outsourcing the management part can be considered. Faster adaptation to process change could be another advantage. Gartner had also indicated in one of their studies, future of IT usage lies in its democratization of innovation.

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