BANGALORE, INDIA: Millions of Indian small and medium businesses (SMBs) are expected to adopt computers in the forthcoming years thus providing a sea of opportunity for vendors to develop tailor-made solutions that cater to the needs of SMBs. Further, the economic slowdown is pushing SMBs to the brink therefore forcing them to adopt certain technologies that would make them more efficient to fight the slowdown and survive through difficult times.
In an interview with CIOL, Kishan Bhat, engagement manager, Zinnov Management Consulting Pvt. Ltd, says the disruptive innovations in technology, revenue and delivery models are helping unlock significant potential among the SMBs.
Excerpts:
CIOL: Do you think Indian SMBs are open enough in adopting IT ?
Kishan Bhat: Only 16 percent of our SMBs use PC in their business operations. There is hope in the fact that more SMBs are adopting PCs by the day and by 2012, nearly 40 percent of our SMBs would be penetrated with basic IT. Increased PC adoption within this vast base will create new opportunities for information technology products. Most of this growth opportunity will be provided by sectors such as manufacturing and retail.
CIOL: So, what will be the top technologies for SMBs in 2009 ?
KB: The retail industry is the largest SMB sector in India and is sure to witness increased IT adoption in years to come. Organized and large retail players are deploying ERM suites for inventory management and demand forecasting along with accounting and payroll. The unorganized sector is not far behind in terms of IT adoption and presents ample opportunities for IT solution providers. Focus should be on building solutions that can address the retailers' pain points across the value chain of sales and inventory management. Talent attrition and increased usage of plastic money in transactions is pushing smaller retailers to adopt basic technology such as credit card swiping terminals and POS terminals for faster invoicing and enriched customer experience.
The manufacturing sector, which is the second largest sector of SMB with 13 million units, also holds large potential for the growth of ERM software. The Manufacturing industry is one of the biggest consumers of ERM software today, which is used to manage supply chain, logistics, warehousing, order management, material movement and processing, inventory management, accounting and payroll, production outflow etc. to improve business profitability. Deployment and implementation of ERM packages is relatively easier and the cost and time overrun is lesser compared to other verticals since the users are adept with required technical expertise.
The growing SMB sector in India will also bring in the initial opportunities for storage solutions. Innovation in delivery models such as storage as a service can help technology companies address the SMB potential in a better fashion. IT brings along with it security threats and hence adoption of security software to avert these threats. Security software offerings through software-as-a-service (SaaS) and appliance models are expected to influence increased adoption among SMBs.
CIOL: Do you expect any new technology initiatives by vendors, specially for the SMB sector ?
KB: Over the last decade interesting business/revenue models have emerged and have revolutionized the perception of both enterprise and consumer software. Innovations in three key areas of technology, delivery models and platform have already made way for non-license business model.
Disruptive innovations in technology, revenue and delivery models are helping unlock significant potential.
SaaS, an innovative delivery model is also being explored by Indian technology majors such as Bharti Airtel and TCS. The SaaS model offers the user the convenience of paying for the software as a service, on a monthly or annual basis etc. This avoids the upfront cost of software purchase as also vendor lock-in.
The appliance model provides an integrated solution to the user, consisting of hardware and software that is mostly plug-and-play, and thus offers high convenience. Innovations in revenue model have provided flexibility to customers to choose and buy software products based on need and reduce upfront costs.
CIOL: Finally, how liberal do you think will the Indian SMBs be in their IT spends during 2009 ?
KB: The ongoing economic recession has impacted the Indian SMB sector as well. Especially sectors such as textile and automotive have been adversely affected. The sector has switched into a cost cutting mode and many of the SMBs have even adopted extreme options such as layoffs and reduced IT spent.
