Why is IT important for SME’s?

There is a misplaced notion among many that IT (Information Technology) is only for big corporations, Universities and Government. IT is considered expensive and not affordable; most of the tools, techniques, software, solutions and services are NOT addressing the Small & Medium Enterprises (SME) sector.  There is partial truth in this observation; but things are changing fast enough. In fact a whole lot of recent developments are bringing SME’s to the main focus of IT. Let me elaborate.

Is IT expensive?

Computing and Communications used to be expensive for decades. Thanks to commoditization of hardware, software and networking, today, IT is likely to be one of the least components of any business. The continuously falling hardware prices along with increased performance and reliability has made IT far more affordable in the last five years. If you walk into any office, the interior design, furniture, rentals and staff salary are likely to be far more expensive than hardware prices, thanks to PCs. Thanks to aggressive pricing by Microsoft, base software like Windows NT operating systems, Office suite of software (that addresses most of the needs of small offices like Word-processing, Spreadsheets, Databases, Presentation, Mail and Organizer) and accounting software like Tally are very affordable today. To address the needs of SME’s companies like HP & Compaq have a range of PC models that are marginally low in performance but cost significantly less. An e-marketplace that Wipro is about to launch will have a PC range that will be as inexpensive as assembled PC and offer features of a branded PC. Companies like Intel & Cisco have special networking products that a small enterprise can buy off-the-shelf and install the local area network and connect to Internet. Today, there are ISPs such as CalTiger providing free Internet connections(in most Indian Metros). Many in India have followed the experiment pioneered by Geocities to offer free Web-hosting space too; VSNL, India Info and many others offer up to 10 MB of Web-hosting space free. The Domain Name Registrars coming to India has brought down the Domain Name Registration (yourcompany.com, yourcompany.co.in) to as low as Rs 379! Tools like Macromedia Dream Weaver or Microsoft FrontPage lets you build snappy Web pages in minutes to start up your web presence. With Indian companies like Satyam and Banks like ICICI Bank setting up Payment Gateways you can do full-length e-commerce in India today though you could be a real small enterprise. Of course, you have e-MarketPlace creators like indiamarkets.com that bring the buyers and sellers on to the virtual marketplace practically free. So IT is NOT as expensive as you might have felt at first thought. Of course, you need a strategy, consultant and a lot of homework to do before you can use all the power of IT. But cost need not deter you.
 
Are IT vendors addressing your needs?

Surprisingly ALL IT vendors are focusing on you. I had mentioned earlier the strategies of PC vendors, network vendors, ISP’s etc. Not to be left behind, Enterprise software vendors like SAP (whose products were considered expensive even by big corporations until recently) are addressing the SME sector today. mySAP targets you. Almost the entire suite of enterprise software – ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Relations Management) and SFO (Sales Force Automation) – are addressing your needs through special packaging, special pricing. There is a move towards application sharing in the form of ASP (Application Service Provider). There is even an attempt to move towards CSP (Commerce Service Provider) who will handle your entire e-business needs on an outsourced basis. And, of course, you have innovations like e-Business Centers that indiamarkets.com is pioneering.

In a sense, every IT-related product and service vendor – PC, Server, Network, Software, Application, Consultant, Intermediaries – is addressing you – the Small and Medium Enterprise. It is for you to take advantage of this changing scene and leverage IT for your enterprise. Are YOU ready?

(Professor Sowmyanarayanan Sadagopan is the Director of IIIT-B, Bangalore. The views expressed are his personal views. He can be reached at askss@iiitb.ac.in)