SMBs Need Services Along With Hardware
It has been a myth earlier by Small and Medium Businesses (SMBs) that latest technology is a concern for a big corporate only. Apparently, more than 70 per cent of the SMBs were into the businesses because they were supposed to be there.
The small entrepreneurs who took the businesses forward as a tradition followed the same old school methods to do businesses.The SMBs have large targets, huge client list and lots of data to work with. In the era of cut throat competition, increasing efficiency and reducing cost are critical.
It is important to know that the businesses using IT are feeling the difference in terms of revenue, costs, productivity, mobility, security and profitability.
For example, use of efficient business computer and internet has helped Dayachand Engineering, an enterprise manufacturing engineering goods bring down manpower costs by half. Further, it has also enabled the company to better manage data, which are critical for supply and inventory management and for sales and marketing.
“Due to use of computers and automation of processes, our manpower costs have reduced by 50 per cent,” says, Naveen Jain, Managing Director, Dayachand Engineering.
Beyond brand name, SMEs also want that their specific requirements should be catered to.
For example, HP has come out with a wide array of computer hardware including workstations, mobility devices, business notebooks, desktop PCs and tablets that can be used only by SMBs in applications ranging from e-commerce, mobility, cloud computing to printing. HP came out with an offer that if an SME buys their product worth INR 3 lakhs, they would offer services worth INR 75,000 free. Similarly, there were other deals too.
A recent market survey suggests that the big IT names do sell. But if one offers special services as in case of HP, it makes a huge difference and customers feel that the brands are connecting themselves directly with the SMBs.
As national barriers to spread of trade and commerce come down, SMBs are increasingly facing competition from foreign enterprises even as opening overseas markets offer new opportunities for them. But firms have to be well-equipped to survive and thrive in this changing market landscape.
TMA International, a business which exports metals, engineering and electrical products, uses internet for business development and data management, says Pankaj Bansal, director of the company.
According to a recent report from market research firm Zinnov, India has nearly 5.1 crore sized SMBs, of which 1.2 crore have a high degree of technology influence, and are looking to adopt newer IT products. The report defines an SMB as a company with up to 1,000 employees.
The report further says that these companies will spend on IT products including mobility, analytics, social media and cloud in order to increase their customer reach, manage customer relationships better, and ensure efficiency in operations.
The report states Indian SMBs present a lucrative opportunity of 11.6 billion dollar in 2015, which could go up to 25.8 billion dollar in 2020.
The market research firm has said that although there is immense opportunity, the large IT vendors may have to fine-tune their approach towards this particular segment of the market.
AMI’s findings reveal that at present RMITS comprises more than 30 per cent of the India SMB IT services spending pie and the potential for additional RMITS spending remains high.
Indian SMBs are adopting hybrid cloud, which is a combination of on-premise and cloud offerings that enables them to develop fully customised, high performance data centres in far less time than it takes using traditional processes. Overall, the focus has shifted towards ensuring modularity with a razor sharp focus on maintaining energy efficiency, they add.
SMBs’ eagerness to tap into the expanding e-commerce opportunities is also fueling demand for business computer hardware.
Consulting firm KPMG has projected that the size of the India e-commerce market would hit 80 billion dollar in 2020 and 300 billion dollar in 2030. Emphasising on the lucrative cost economics of e-commerce, the consulting firm says that with investment of just INR3,000, SMBs can enter into online trading space and reduce their marketing and distribution cost by up to 60-70 per cent.
E-commerce is flourishing as internet facilitates buying and selling, consumer feedback, market and product research, and marketing. E-commerce applications reduce costs associated with making payments, customer service, product display, inventory management, and staff recruitment, say analysts.
As much as 95 per cent of SMBs surveyed for a study sponsored by trade body FICCI were found using computers. This rate ranged from 74 percent in the foundry subsector to 100 percent in the information technology & enabled services (IT & ITES), other services, 25 tourism/transportation and transportation equipment sub-sectors.
Going by what the retailers say, SMBs are now days looking for products specifically made for them keeping in view their requirements.
“Invariably, most of the devices have far more features than we need. We are wary of people selling us capabilities we will seldom use without being strong on features that we really need. At the same time, we keep a good ear open to new technologies that can change the face of our businesses or open a new field for us,” said Capt DC Shekhar, MD, AlphaMers.
Entrepreneurs are choosing the products because they are secure, flexible in use and most importantly have features only for them. Today online shopping is preferred over the traditional shopping ways. If a customer has to buy any electronic product, they open at least 3-4 online shopping sites simultaneously to compare the deals and features. The prices and features are somewhat same in the similar category products.
“I would choose a product that comes from a longstanding player and would also resist change when a new ‘hot’ product comes along. There are very few who cater to the needs of SMBs. Others sell what they have developed. That makes a big difference. To cater to an SME for functional processes there must be basic features that most people need and a simple model for customisation.”
But there is surely something beyond the product features that makes a big difference for the buyers.