Managing SMEs: Tricks to Bank On

The last decade in India has seen the IT industry flourish

with the emergence of the Internet. Its ubiquitous nature has changed and

continues to constantly change the way businesses and customers view each other.

Traditionally, small and mid-sized enterprises have always endured stress–the

IT revolution just added another to the list. The dot-com bubble may have burst,

but the resulting trend of increased customer awareness and a lower barrier to

entry for the competition forced businesses to focus on core competencies.

Consequently, there was a clear movement of outsourcing IT services to third

parties, be it for website hosting, remote application monitoring and support or

even for network/file back-ups, maintenance and recovery.

Application service providers were the talk of the day,

touting the introduction of a new paradigm to the world. They provided a

cost-effective IT infrastructure that SMEs could use, without having to deal

with its maintenance and upkeep. However, their services were limited and they

were never able to fulfil the needs of SME customers. Their numbers have, thus,

been dwindling by the day. Outsourcing of services, per se, is not anything new

and revolutionary. Each one of us has been using an ASP for years: the

"dial tone" in your telephone land line–you pay a fixed monthly fee

and then get billed for usage! The reason for the ASP failure was their service

model.

ASPs allow many disparate customers to access a single

installation of an application over the Internet, thus distributing the cost of

software, server, IT infrastructure and IT people required for its maintenance,

between all the parties/customers accessing the application. However, the

pattern of usage for a software application is very different from the phone

dial tone. Business apps, like lead management, sales force automation or an ERP

package, cannot exist in isolation–they need to be customized to each SMEs'

needs, maybe even integrated with their proprietary back-end systems, like a

customer database or a home-grown financial package. This need couldn’t be

matched against the scalability requirements of ASPs.

The need for managed hosting depends on the type of

application that has to be exposed on the Internet. A simple informational

website about your company can be co-located with other businesses’ Web pages

on an ASP server and will not require all the bells-and-whistles that a managed

host provides. If however, you require a larger application that needs to be

accessed by your sales force, your distributors, your partners and your senior

management to get real time status of resources/deliverables; a managed host may

be the best option for you. Some factors that may influence the need for managed

hosting are:

• The criticality of the Internet application as a source
  
  of revenue for you.

• The need for the application to be up round-the-clock,
  
  guaranteed.

• The adequacy of your current in-house resources in
  
  providing support as needed, without diluting your focus on the business at
  
  hand.

• The affordability of the application software–would you
  
  rather spend the money on your core business needs?

Managed hosts typically provide the client with full

root/administrative access, so changes can be made to your application at any

time. As an SME, you also have the ability to customize the application at your

discretion. A good hosting provider not only meets your requirements from an

application perspective, but also from a machine usage, guaranteed uptime,

access security restrictions, bandwidth and concurrent application usage

perspective.

The author is chief technical officer, TriVium India