'IT adoption among SMEs in Peenya is less'

BANGALORE, INDIA: Cimtrix Systems Pvt Limited, a small-scale enterprise located at the Peenya Industrial Area in Bangalore, is now on an expansion mode. The special purpose tool manufacturer, which has a turnover of Rs. 8-10 crores, is planning to garner Rs 40-50 crores in the next three-four years.

In an interaction with CIOL, Krishnan Sahasranam, MD, Cimtrix, talks about his business plans and exports, technology adoptions in the company. Excerpts:

CIOL: When was the company launched? What kind of products does it manufacture?

Sahasranam: Cimtrix was launched in 1994. The company designs and manufactures special purpose machines that are meant to automate manufacturing of certain products. We are concentrating on a few products that include motor armature, battery and also manufacture CMMs for metrology applications.

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The armatures are used in home appliances, vacuum cleaners, washing machines, power tools, automotive motors etc.

The company is also catering to battery industry and is working with companies such as Exide and Base Corp. We have service points in Pune, Delhi and Himachal Pradesh.

CIOL: Do you export products to foreign countries?

Sahasranam: Yes, we have been exporting to foreign markets such as Poland and South America, basically because the solutions are identical there. We are also getting enquiries from Sri Lanka, Turkey and Northern Africa.

We do direct exporting as we have no formal marketing strategy. The company is a small player and currently our products sales are purely pull-based, and not push-based. We have an agenda that we add one or two customers every year and continue to work with the same customers on a long-term basis. For instance, we have been working with Bosch and Lucas-TVS for more than 10 years now.

Our key segment is the automotive segment and India is our key market, as a major share of the sales - around 70-75 per cent - comes from here.

CIOL: What prompted you to launch this Special Manufacturing tool company?

Sahasranam: The idea to start a machines tool company evolved form my previous job. I was a resident engineer for a French machine tools company, before I started this venture. That experience made me to think of something related to machine tools.

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We started as a services provider and began with retrofitting, a kind of service where newer control systems or products take over obsolete products in a certain capital equipment. Later we moved on to product design and manufacture. We put together a team and founded Cimtrix.

We have currently 50 people working in our company. We directly recruit people from institutes such as NTTF, and provide them training for eight months to one year. We do not have a tool room or manufacturing facility here. Instead, outsource the entire manufacturing process to Peenya Industrial Area, and then bring in those products, inspect and assemble them.

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CIOL: Is the company planning to adopt IT or software solutions to increase productivity and reduce cost?

Sahasranam: In fact, we have been approached by the Government of India to 'e-enable' most of our services. I believe that there is an agenda for the government to help SMEs to adopt IT solutions to boost their businesses.

However, the problem is that most of us have little awareness about these solutions and do not know how to optimally deploy them. We have been asking the government to give us a clear picture about that.

We, as a small player, have limited idea to exploit the advantages these software solutions provide. Moreover, our system is not fully ready to adopt IT. However, I have been talking about it in our forums and trying to understand more about the business advantages of these solutions.

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Many software companies suggested us to use ERP solution. Essentially, all these companies are trying to bring us a certain software that can be used in their own system. That is not something we are looking for.

We are looking for solutions that are meaningful to us. As long as I know, the prevalent software solutions require high level of customization and as an SME, we have neither time nor can we afford to migrate to the new system from the existing system easily.

We know that various IT majors are offering cloud-based services and infrastructure solutions. However, security is a major concern in all such solutions. When it comes to infrastructure solutions, they have not yet reached end users.

Not only that, we should get a feel of the product which these companies offer and they must convince us in terms of security.

CIOL: What is the technology adoption trend among SMEs at the Peenya Industrial Area?

Sahasranam: I don't have the correct figures. However, I think that the SMEs in the PIA are more comfortable with low-ended software packages and they are keeping them in their own intranet, rather than going for a shared application outside.

Not more than 18-20 per cent of the businesses in the PIA use IT solutions.

CIOL: Did any IT company approach you with any specific software solution?

Sahasranam: We got some telephonic enquiries. Some of them came and did some presentations in our forum. However, all the companies, even Microsoft, have lower-ended shared software solutions provided via their service providers or network partners. Ultimately the success of the package depends on the knowledge to customise it.

We have formed a cluster of 10 tool manufacturing firms. We re now planning to approach some design companies where we can share resources, which will help us in reducing the cost associated with IT implementation. However, still, ownership, commercial and security issues are there.

Transforming unethical software users to ethical software users is a major problem. The SMEs have to match up to the the international standards of design, FMEAS, and methodologies to grow in today's environment.

Many of the SMEs in the PIA are of individuals or are micro businesses. If there is a common IT resource sharing opportunity and practice inside the industrial area, that will help us save massive expenses.

Last week, I had talks with an HR company. It offered outsourced services to us. It, in fact, is a huge cost factor for SMEs to run an admin service. So if it is shared that would help us in cost-cutting.

CIOL: In your opinion, how serious is the government about SMEs in India?

Sahasranam: The government has to seriously look at the SME sector. Each company in our cluster had invested 20 lakhs each, last year, to implement lean manufacturing initiatives in our group.

We hired consultants and the government is funding about 80 per cent of this expense. We are also using various allocations being provided by the government. However, funding alone is not enough. The government's role does not end there. It has to go deep into the problems we are facing and find solutions as well.