Business Accent

Increasing IT usage in Indian SMBs

Sairee Chahal on the need to address the major concern areas for SMBs—cost-effectiveness and good customer service

Sairee Chahal

‘These IT guys, I tell you….’

This phrase pretty much sums up the state of IT usage in most SMBs. There is nothing against the folks who comprise the IT workforce, however, it speaks volumes in terms of user perception and experience.

Most companies and entrepreneurs realize the potential and the need of information technology as a business enabler and competitive advantage, it is the experience of having to deal with multiple implementation agencies, piecing the whole puzzle together, the inexplicable jargon thrown at you and the layered expenses that keep stretching like that mozzarella slice.

Fulfilling information technology needs for SMBs is a typical case of blind men and the elephant, each one approaching it from their perspective, without really keeping the complete picture in mind.

What I am talking about here are not the software or technology driven companies but hundreds and thousands of businesses, which inherently have not relied on IT as a business driver. These include secondary steel manufacturers, auto component and ancillary units, textile manufacturing and sourcing units, medical practitioners, retailers of varied kinds, trading companies, resort owners, HR firms, accounting firms, architects, publishers, printers and hundreds of service providers across the board.

A brief survey of over 100 such enterprises reveals a very strong inclination and buy-in to adapt information technology as a tool to create business advantage. However, this enthusiasm is marred by the kind of effort and attention needed to achieve such objectives.

To begin with, prohibitive cost of proprietary software and lack of information or easy adaptability of open source software is a major concern. This is backed up by almost fragmented state of the hardware market, without zero service and support mechanisms—within the branded and the unbranded markets.

Allow me to explain this through an example. One of our recent clients is a manufacturing enterprise based in Punjab. The company is a family run traditional enterprise clocking a turnover of over Rs 100 crores. The management team and family realize the need to use information technology in order to maintain or strengthen their business position. A complete brick and mortar company begins to use IT as part of their business. It starts with investment in hardware (laptops, desktops, printers), software (Windows, MS-Office, Adobe Acrobat, Tally, etc.), creating an online presence (buying a domain name, buying Web hosting space), setting it all up, and of course training the staff to use the new systems.

While the company has invested a fairly significant amount in increasing their IT Quotient, their experience getting it done has been less than pleasing. The major cause is the disconnect between various vendors and service providers, lack of information and support regarding making the correct buy decision. The service levels leave much to be desired as well.

This is a very small example—a tip of the iceberg of how hundreds of small and medium businesses are grappling to find the right fit to their IT needs.

There are revenues running into a few hundred million USDs waiting to be made by just accessing and servicing this absolutely ready segment. However, it does need initiative and enterprise to provide the right support.

It is easier said than done, but it certainly is doable. The following approach may assist in bridging the divide between the IT consumers and providers.

Simplify: Give the customer what fits his need best. Don’t try to sell a server to a guy who is yet to buy his first set of desktops. Throw out the jargon, explain, educate, and excite the consumer. Don’t intimidate or overwhelm the consumer. Put together a basic solution if that is what matches the customer’s needs best.

Standardize: Let there be synergy between various components of the IT chain. Make sure the Internet browser talks to the website programming, the word processor is compatible with the OS, and the hardware pluggins are simple and easy to upgrade.

Service: This is a major one, especially with hardware. Once the payments are cleared, the vendor or service provider has the consumer out of sight and out of mind. Lack of service and transparent information on making the appropriate buy decisions is one of the major hindrances to increasing IT spends for SMBs. Increase in quality of service will ensure that the consumer views IT as a true enabler rather than a ‘have to’ spend. There is a significant market waiting to be tapped.

Strengthen: The IT value chain across businesses is large and there is a need to strengthen it by adding components, which accumulate value for businesses, without increasing the cost of acquisition. Specialized customized solutions like Software as a Service (SaaS), Technical Documentation, Internet Estate Management across the value chain will go a long way in increasing IT usage numbers for Indian SMBs.

There are thousands of vendors providing IT solutions across the chain, there are very few who can engage comprehensively to meet the IT needs of SMBs—an opportunity to the ingenious IT entrepreneurs. The opportunity lies in creating cohesive solutions and sustained service quality—something that will catalyze the vast SMB market to adopt IT as a crucial business driver. The trick is to sell/provide most solutions under one roof—one brand name—one quality and replicate the model to various industrial clusters and SMB groups.

An enhancement in user purchase and usage experience will result in incremental rise in buy-in on IT as a business strategy. There is perhaps a strong takeaway from the IT Consulting model of the big four Indian IT majors, but the real value will be in arriving at indigenous solutions for the indigenous market.

The author is Co-Founder Consultant, SAITA Consulting. She leads the initiative of running India’s first general management consulting company. Sairee has been involved with setting up various entrepreneurial ventures and start-ups particularly in emerging markets. Email: sairee@saitaconsulting.com