A small success story
Business World, 25th January, 2010
An article by Ravi Venkatesan, Chairman, Microsoft Corporation (India) Pvt. Ltd.
We are, and not surprisingly, a nation of small enterprises: 99 per cent of businesses in India fall under the SMB (small and medium sized businesses) segment, and are responsible for almost 50 per cent of the GDP of the nation; account for around 40 per cent of the country's industrial output; and 35 per cent of direct exports. Globalisation has been both – key in expanding the opportunities available to SMBs, as well as a test of resilience in the face of competition, especially with recent economic concerns. If these businesses are to succeed as a nation, they must continue to use competitiveness in cost and quality as their mantra.
In fact, the recent developments around the Indo- Asean Free Trade Agreement open up another road in this journey. It gives us access to a trillion- dollar Asean economy, and can increase the overall trade turnover between India and the 10- country block by as much as $50 billion. The stakes are high, and the challenges may be tougher. It will once again create a new environment within which SMBs will have to compete and perform.
Past Is A Teacher For Tomorrow
Technology adoption proved to be a powerful tool in the productivity- driven race of the past, and stakeholders in this equation, namely, the SMB, the government and enablers such as Microsoft have learnt from this experience. So, IT is important for SMBs. Ergo. SMBs are important for IT companies, representing the next frontier of growth for our industry.
We now know that when this segment looks at business imperatives, it considers four factors:
- Efficiency– maximise time spent on work that directly improves the bottom line.
- Flexibility– be nimble enough to react to threats and capitalise on opportunity.
- Reliability– that critical business infrastructure is fully available when called upon.
- Liquidity– low capital expenditures, and any other financial support that is possible.
SMBs want to be financially strong and as effective and efficient as possible, just as any other professional profitable organisation. But the true difference is in the 'how'. SMBs in India are unique in their origin, even while they are similar in many ways to SMBs worldwide.
Keep It Simple, Affordable and Relevant
One simple example is cloud computing, which comes as manna to this segment, with its offer of pay- as- you- go, and low capex IT consumption models. This will completely change perceptions of technology being 'out of reach' or 'for the larger set'. Implementing IT solutions will soon be as easy and widely used as probably getting a phone connection.
I witnessed some promising work being undertaken in Tirupur, one of the largest hubs of textile manufacturing. We had, in partnership with the National Manufacturing Competitiveness Council (NMCC), started Project Vikas a couple of years ago. Under this initiative, we worked with Airtel, Wipro and Global Outlook to develop tailor- made solutions for the clusters, and the results were certainly optimistic. Each manufacturer and exporter in the cluster chose a relevant 'hosted' solution/s from among the tailored options available and took advantage of the 'pay as you go' model, rather than installing an on- premise solution.
What We Need To Do
This is the kind of success story the industry must replicate in other parts of the country if we want to drive economic inclusivity that is so critical for India's economic progress.
But while we do so, we must be able to ensure the last mile connectivity that is still relatively elusive in India, and that is critical not just to the marketer but also to nation building. For us to build a sustainable model, we must ensure that the entire chain sees business value in the involvement. An approach that hinges on 'partnership' will ultimately succeed, just like it has in Tirupur.
SMBs are investing in the future – making changes and taking risks to survive compete and thrive. This is the opportunity for technology companies to contribute to the growth story of India. And it is a win- win situation. As SMBs move to the centre- stage of the economic growth, they become the inspiration for the government, financial institutions and vendors like us to innovate. It is only through looking at sectors like these that we will, as a nation, be able to reduce economic disparity, which keeps us ticking in hope.
This article was first published in Business World.