Brief

Indian SMBs and the intelligent office

In the past, products such as PDAs and smartphones were believed to be the sole preserve of large enterprises where they increased efficiency and productivity. But a recent study by New York-based AMI Partners states that small and medium businesses (1-999 employees) in India are on track to spend $70 million on PDAs by end-2006, up 18 percent from last year. These purchases are being prompted by the need for portability and remote access. Accordingly, spending on portable computers such as notebooks and tablet PCs is expected to jump over the next couple of years.

Cost remains a concern when it comes to the adoption of ‘smart’ devices, both the upfront cost as well as the service cost. However, while the cost of PDAs is high, adoption has been limited to CEOs, proprietors and senior managers for whom the benefits of access while traveling outweigh the costs involved.

Indian SMBs are a growing segment, the numbers of branches that they operate is expected to increase, and many plan to expand their operations over and above this. This will further boost the demand for building intelligent office infrastructure.

"The principal advantage of having an intelligent office is that it adds connectivity without sacrificing portability" - Avimanyu Datta Analyst AMI Partners

The concept of an intelligent office is being exemplified by the use of PDAs and smartphones that free an employee from being physically present in the office to do his job. “The principal advantage of having an intelligent office is that it adds connectivity without sacrificing portability,” says Avimanyu Datta, Analyst at AMI Partners.

He adds, “Robust economic development in Tier-II cities in India brings greater opportunities that need to be explored to maximise profits. Since setting up an office from scratch means making high capital and infrastructure investments, intelligent office devices offer a lower-cost solution.”

According to the study, approximately seven out of 10 medium businesses (100-999 employees) and 14 percent of small (1-99 employees) have multiple branches. Datta is of the view that pervasive devices with wireless connectivity provide a cost-effective communication link between firms, freeing them from setting up their own telecom infrastructure.

The other factor is the rise of a mobile workforce among SMBs. About 50 percent of all medium businesses and 20 percent of small businesses have a mobile workforce. These numbers across both segments are set to rise, and will boost demand for ‘smart’ office devices.

Notably, spending on PDAs is forecast to grow at a CAGR of 19 percent, quite the opposite of the global scene where PDA sales have been shrinking.

Moreover, India’s economic development and increased business opportunities have resulted in intense competition where fast decision-making is often the key to success. “Today, clients cannot wait for suppliers to respond via e-mail…they want an immediate response. A decision on product purchase or on business partnerships often requires that people interact across various locations. The most important reason for the adoption of the concept of an intelligent office is reduced decision-cycle time. Intelligent devices with wireless connectivity allow this to happen seamlessly,” explains Datta.