Why SMBs will lead the next wave of IT in­no­va­tion

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This decade truly be­longs to SMBs as they are forc­ing in­cum­bent ven­dors to of­fer cus­tom­ized so­lu­tions that they want, rather than be­ing forced to adopt ver­sions of so­lu­tions whose fea­tures they sel­dom use or re­quire

“Strat­egy is about stretch­ing limited re­sources to fit am­bi­tious as­pi­ra­tions” In a coun­try as di­verse and large as In­dia, late man­age­ment guru, C K Prahlad’s quote, best cap­tures the thought process of mil­lions of small and medium en­ter­prises in In­dia that are look­ing to strad­dle the global land­scape with their limited ca­pa­bil­i­ties. In emerg­ing economies like In­dia, com­pa­nies in these sec­tors have the high­est growth po­ten­tial. Sta­tis­tics from in­de­pen­dent re­search firms and the govern­ment show that the SMB sec­tor em­ploys close to 40 per­cent of In­dia’s work­force. The SMB Cham­ber of Com­merce es­ti­mates that there are about 47 mil­lion SMBs in In­dia which con­trib­ute 45 per­cent of In­dia’s in­dus­trial out­put and drive 40 per­cent of ex­ports.

While most of these SMBs have global as­pi­ra­tions, many of these com­pa­nies lack the nec­es­sary busi­ness pro­cesses to scale to the next level. Adop­tion of tech­nol­ogy can en­able these SMBs take the next big leap. We are al­ready see­ing glimpses of this trans­for­ma­tion en­abled by tech­nol­ogy.

The im­pact of re- en­gi­neer­ing busi­ness pro­cesses can be huge. For ex­am­ple, Kwality Dairy In­dia, a leading dairy prod­ucts com­pany, is us­ing a cloud-based ERP so­lu­tion to fore­cast de­mand more ac­cu­rately and gen­er­ate more ef­fi­cient pro­duc­tion sched­ules — a crit­i­cal fac­tor in an in­dus­try where qual­ity and quan­tity of per­ish­able raw ma­te­ri­als change dy­nam­i­cally. Reli­gare Fin­vest, an SME-fo­cused NBFC, has re­duced its cost of col­lect­ing debt by 70 per­cent per re­ceipt with re­duced er­rors, by us­ing a mo­bile so­lu­tion.

For any SMB to suc­ceed, the ecosys­tem also has to be con­ducive. To­day, SMBs have a huge va­ri­ety of tech­nol­ogy choices cou­pled with an equally large num­ber of ven­dors who are of­fer­ing sec­tor spe­cific so­lu­tions. The emer­gence of a huge num­ber of tech­nol­ogy star­tups cater­ing to SMBs in In­dia also points out to a fu­ture where the adop­tion of tech­nol­ogy in SMBs is bound to go up.

This decade truly be­longs to SMBs as they are forc­ing in­cum­bent ven­dors to of­fer cus­tom­ized so­lu­tions that they want, rather than be­ing forced to adopt ver­sions of so­lu­tions whose fea­tures they sel­dom use or re­quire. We are al­ready see­ing dis­rup­tive tech­nol­ogy mod­els that are born out of ful­fill­ing these unique needs of SMBs. Startup Ex­o­tel, for ex­am­ple, which pro­vides vir­tual tele­phone num­bers to SMBs found a space that was un­oc­cu­pied and un­der­served. The re­sult: its so­lu­tions have been quickly lapped up by SMBs, and Ex­o­tel has more than 400 cus­tomers to­day. Given the mar­ket size, we can ex­pect a slew of in­no­va­tive so­lu­tions and prod­uct of­fer­ings from tech­nol­ogy ser­vice providers.

To­day, a large per­cent­age of the SMB mar­ket is un­der­served, and a num­ber of tech­nol­ogy star­tups have rightly sensed the huge op­por­tu­nity in craft­ing af­ford­able prod­ucts and so­lu­tions. In­dia has the tech­no­log­i­cal prow­ess and of­fers the right test bed for tech­nol­ogy ser­vice providers to power the dreams of SMBs us­ing the wings of tech­nol­ogy.

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