What is your analysis of the SMB segment in Pune with respect to IT implementation within their organizations? What are the major issues that they face?
SMB segment in Pune is diverse in nature and it comprises of midsize to small to very very small enterprises. Though the PC penetration in SMB is good at almost 95%, IT implementation is not so good in Pune especially in companies of annual TO bellow 50Cr. Only 10 to 15% of these businesses use the integrated IT solutions. Most of them use stand alone packages for accounting or designing and rest all are on Word, Excel & Powerpoint. Their problems are, lack of awareness in decision makers of IT’s utility in business, shortage of trained & affordable manpower and most importantly the total cost of implementation of IT solutions.
You have offerings in the BI solutions space. Tell us how such solutions can aid an SMB to resolve its business challenges and grow?
Iota has developed business solutions like Sixth Sense ERP, Sixth Sense CRM focused onmanufacturing industries in SMB. In last 10 years we have implemented Sixth Sense in various small and medium industries. The SMB segmentin India is growing fast; their infrastructure, plant & machinery is getting added and the head count is also increasing rapidly. These SMBs can be more equipped if they use software solutions like ERP.Their processes will be standardized; automating the business functions like purchase, Stores, production and quality will improve their efficiency. Consolidation of business data will help them to be more competitive. Getting MIS or useful & reliable reports willbecome easy for the owner. In short ERP / CRM can be the handle totake a good control of your business.
SMBs have tight IT budgets and hence have to find just the right business applicationfor their organization with limited investments. What are the key criteria that an SMB should keep in mind so as to choose the right business application and the right vendor?
Proper planning of IT investment
SMBs should consider the investment on IT & IT applications as acapital expenditure, a one time but long term investment which willgive them desired results at least for next 5 years. Keeping this inmind SMB should shell out about 1-2% of their turnover as first yearinvestment (about 6 Lac to 20 Lac depending upon the requirements)and make provision of 1Lac to 2 lac for maintenance of applicationslike ERP. In fact one should ask the vendor to give economicjustification of the investment asked for. We have a standard business tool defined for such exercise and usually we do it duringevaluation for interested businesses.
Finding the right product and the right vendor
While deploying business applications SMBs should study their processes andr equirements first and then should find a ready product which isdeveloped for their specific type of businesses. The product should have the flexibility for multi-company, multi-location and features designed for Indian SMB.
Nextstep is to find the vendor with sound reputation andsustainability. The vendor’s team size, management and theirbackground, skill set, its customers and years of operation all arekey attributes of evaluation. SMBmust define their expectations and requirements they have from the application. Defining the project scope in the beginning andinvolving the top management in monitoring the project are certainthings which help SMB to complete the project on time and enjoy thebenefits.
Post implementation support
Post implementation support is necessary; the vendor must have a goodmechanism for on-line and on-site support. It’s like a marriage; IT vendor should be a key member of your growing business. It is also important that implementers should have the functional knowledgeabout that business and they should guide users to map their businessprocesses with the software.
Change Management
During implementation of a business application change management is the keyto success. Resistance to change is a typical human tendency so training the users and letting them understand the importance of adopting this new system reduces this resistance.
It is seen that many Indian SMBs go ahead and deploy an IT solution but the implementations fail due to various reason. Can you talk about the mistakes that SMBs generally make leading to such a failure?
There are many such so called failed cases around and in most of thesecases mismatch in the user expectations and delivery of the productis the culprit. There are 3 types of products/ vendors — Local, National & Global as one can categories them.
I know many such cases where organizations buy some local productlooking at its attractive cost and they do ignore the more importantfactors of product and vendor evaluation. Most of these localproducts are tailored by small time developers for someone they know.The lack of knowledge and professional approach in product development and implementation makes them more likely to fail. Manytimes they do not have the product depth nor the scalability.
You will also find few failed cases where the big global players were unsuccessful in implementing the solution. Their product complexity,need of trained manpower to use the system and lack of business understanding by implementers are their problems in SMB. And ofcourse the total cost of project and support. In my view SMB should find a suitable national product which is between these two extremes.
Can you give examples of SMBs who have benefited from your solutions?
At Silkaans Electricals, Manufacturing of Transformers havingtrained and dedicated manpower their systems were manual and more person dependent, it was time consuming and error prone also e.g. to Purchase raw materials & consumables the officials needed to calculate stock, future requirement of production and lead time. We implemented ‘Sixth Sense Equipment’ ERP with its material module which automated their procurement process. Procurement plan is calculated accurately based on item properties by the system and purchase Orders are sent to suppliers with shortest process time.This system dependent processes has ensured standardization and accuracy. Process time and in turn decision making time has reduced.Their team is capable of handling more projects at a time on shopfloor.
Another example is that of an auto component manufacturer; Pune Metagraph which is into decals and decorative stickers for auto industry and white good industry. Manual operations were pushing them work forlong hrs to meet the timely deliveries to demanding auto OEMs. Maintaining product quality and traceability was also very difficult.We implemented ‘Sixth Sense Auto’ for their factory. Now in last 4-5 years their operations have grown more than 3 times but they have been able to manage this volume without adding more staff. Now they also have a very reliable business data for variety of decision making, for analysis & to deal with export customers.