Information Technology Management with a Purpose

Apr 19 2013   5:16AM GMT

Is the SME sector leveraging IT ?



Posted by: S R Balasubramanian
Tags:
small and medium businesses

The small and medium enterprises (SME) today form an integral and a meaningful part of the Indian economy. They have contributed to the growth of the industrial sector in quite some measure, have been feeder companies to large industrial houses and have provided employment to a large section of our population. Their growth and prosperity therefore augurs well for the economic health of the country.

During the last couple of years I have been trying to help small and medium sized organizations enhance their efficiencies and competitiveness by using IT. The attempt is to bring to them systems and good practices that are used in large and professionally run organizations. My experience has so far has been a little short of expectations and I think more effort is needed to bring them into the right fold.

I had an encounter with a large number of SME owners a little while ago at Ludhiana in Punjab. I was a speaker in the event and the event was a part of the seminar series sponsored by one of the leading Banks and coordinated by one of the technology media companies. The sponsors intended to wake up these companies to the new reality so that they prosper, though the interest of the sponsor could be to seek a share in this prosperity. However the effort was commendable as it exposed these companies to the contemporary industry practices.

The first speaker at the seminar was the country head of a global consulting organization. He spoke about the life cycle of small and medium companies based on a study and experience from across countries. He explained the journey that such companies take right from its birth through to survival phase, stabilization, consolidation, growth, decline and death. He laid special emphasis on one of the reasons why these companies fail – that is when in a growth phase they fail to modernize and professionalize or when inducting professional they are unable to manage the conflict between the new breed of professionals and the old guard. The audience listened intently and asked quite a few questions eating up a lot of time. They demanded more of such session and were ready to walk the path.

As I rose to speak, I got a request from the organizers to shorten my talk as we had overshot time. In keeping with the flow I explained to the audience the importance of IT and the need for modernizing their set up with automation. With examples I explained to them how companies have leveraged IT to reduce inventory/outstanding, to enhance customer reach, to bring efficiency to operations etc. I also emphasized the fact that if they continued to ignore, their competitors could steal a march over them. I listed down few of the emerging technologies and explained a few including cloud computing, ERP and web content management and told them how they can use these technologies to get benefits to business. I thought they listened but there were no questions at the end and it looked like a pass-through session. In the subsequent cocktails & dinner session too no one came up and asked for help.

Later as I mused on the subject, the situation looked a little grim to me. Owners of these companies were generally ignorant (based on questions I raised to them during the session) of IT but did not seem to be keen in understanding it either. Advice of the earlier speaker asking them to modernize and use IT did not seem to have penetrated their minds too. They were more concerned about building their businesses and not worried about how to run them.

I spoke to the sponsors and I shared my concerns with them. They agreed to take up this matter with the industry associations and persuade them to organize events focused on educating these organizations to understand and use IT. While the rest of the world is progressing and leveraging technology for their benefit, our small and medium sector should not miss out on this trend and repent later. I think vendors, media, industry associations and Government should play a part in spreading awareness.

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