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Ludhiana: Tapping the Industrious Lot

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DQI Bureau
New Update

The busy lanes of Ludhiana bespeak the story of

entrepreneurship. The numerous bustling small and medium entrepreneurial

ventures jostle alongside prominent biggies like Vardhman Group, Nahar Group,

and Hero Cycles. From self-made entrepreneurs to successors to family legacies,

the citys entrepreneurial streak has begot industrialization, validating its

claim to the title Manchester of India.

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So, it does surprise us that the software industry failed to

ride this strong entrepreneurship wave in Ludhiana. But, the disappointment over

the possible loss of opportunity is offset by a more potent potential

opportunity. While the city couldnt feed the software needs of the US and

European markets, this industrial hub offers a vibrant domestic IT market,

something not to lose sight of.

The Industrial Behemoth



Ludhiana is one of the most prosperous cities not only within Punjab, but also
within the country in terms of wealth owners.

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Ladda Kothi, Sangrur

The city has become a major hub of industrial activity. It is

home to not one but several industrial clusters. Its a major textile and

light engineering center and exports woolen garments, machine tools, dyes, cycle

parts, mopeds, etc to international markets. The city, reportedly, produces

approximately 95% of the country's woolen knitwear, 85% of the country's sewing

machines, and 60% of the nation's bicycle and bicycle parts.

Coupled with the entrepreneurship spirit, there are other

factors that make Ludhiana the industrial hub that it is today. Its proximity to

the countrys capital is one of them. The city also has the advantage of

cluster development, helping one city feed the other.

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Ludhiana throws open a vast market for the IT shops. However, it

has not been as easy as it sounds, considering the fact that IT adoption in

Ludhiana is still comparatively low. Being an under-penetrated market opens up

an even bigger opportunity to be tapped. The city is now on the radars of major

IT vendorsSAP, Microsoft, Sun, etcwhile the hardware vendors are stepping

up their coverage through strengthening their channel base in the city.

So, what is it that is beginning to attract IT vendors to the

city? The usual suspectvendors. They are now looking beyond tier-1 cities and

into the next tier of cities that can offer them incremental revenues. But, more

than the next tier of cities, it is the next tier of companies, beyond the large

enterprises, that offer the market for the future. Ludhiana offers an ample base

of small- and medium-sized enterprises. The citys industrial belt is largely

dominated by SMEs.

There is also a growing recognition for the need for technology

to run the businesses successfully. The increasing realization for the need for

automation is coming not only from the point of view of running the operations

more efficiently, but also because of the growing pressure from international

markets. For instance, the knitwear industry is facing intense competition from

China, forcing the units here to improve efficiency, deliver on time while

offering more competitive prices. All this, the market is realizing, can be made

possible through the use of IT that can help manage the supply chain better,

have better control over the production processes and the inventory, and avoid

undue wastage. Considering that many of the shops here are export-oriented units

and targeting the international markets, they are also forced to go the

automation way as part of certain compliances required by the partners they deal

with in these markets.

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Strengths

  • Entrepreneurial spirit

    fostered by the local textile industry

  • Emergence of clusters as

    a key dynamics of industrialization could help

Weaknesses

  • Though there are a large

    number of SMBs, cost and lack of awareness prohibits wider adoption of

    IT

  • Availability of trained

    manpower is another major challenge

While the basic level of automation is in place among the larger

enterprises and preliminary adoption is in place among SMEs, the market is now

moving towards the next level of IT adoption in Ludhiana. The bigger enterprises

are now looking at graduating from stand-alone island of applications to

standard ERP packages. Meanwhile, with the ERP vendors coming out with trimmed

down and lower-priced versions of their ERP, they are now aggressively targeting

the smaller units in Ludhiana. For instance, SAP.

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Cluster Advantage



A key dynamics of the nature of industrialization in Ludhiana is the
emergence of clusters, which effectively make things easier for the IT vendors

in terms of marketing. According to Ajit Lakra, managing director, Superfine

Knitters and the president of the Ludhiana Knitters Association, being in a

cluster most of the units are within close proximity, thereby making it easier

for the vendor to target a much larger number of units with comparatively lesser

effort as opposed to a non-cluster industrial area. Also, considering the units

within a cluster work closely, the word of mouth helps in spreading awareness

and marketing for a solution. So, an entry into the cluster makes it easier to

grow the market beyond. Further, an entry into one industry helps in providing

an access into the other allied industries in a cluster. More vendors are

gradually realizing the broader as well as the finer nuances of the Ludhiana

market, bringing the city on their radars.

The Channel Link



The channel community is gradually beginning to emerge strongly in the city,
considering that vendors are strengthening their channel base to strengthen

their presence in the city. According to Samit Jain, CEO, SK Trading Company,

most of the hardware vendors and their brands are now well represented in

Ludhiana. Another key reason for the stronger channel base in Ludhiana is the

fact that it is emerging as the hub to cater to rest of the markets in Punjab.

Jain explains that the city is strategically located at the center and that

makes it easier to feed the remaining IT markets in the state. And, its

proximity to Delhi also works in its favor in terms of logistics. Further, the

sales ASMs and RSMs of most vendors are now located in Ludhiana. The Association

of Computer Entrepreneurs (ACE) has also been formed to solve any partner

related issues.

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Challenges



The potential opportunity comes with its own share of challenges. The
biggest one is the cost and awareness factor. While on one hand these industrial

units are increasingly recognizing the need for technology, on the other hand,

they are not willing to bear the cost of an expensive solution. As Lakra says,

even a Rs 10 lakh ERP package is going to be way too expensive for a small unit.

There is also dearth of industry-specific customized solutions specific to the

needs and requirements of a particular industry. The need of the hour,

therefore, is cost-effective and industry specific solutions coupled with

spreading awareness.

According to Narinder K Miglani, general secretary, Knitwear

Club and also managing partner, Election Knitters, the availability of trained

manpower is also a challenge as once these companies have the system in place,

they also need the right manpower to maintain these systems. With most

IT-trained workforce moving out to the hubs for software development, the

availability of not only trained manpower but also ISVs is becoming a challenge.

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