The SME March Goes On…

Every time and in every sector of the economy, when there is talk of
"India Shining" it is quickly ridiculed by the critics who point to
the SMEs in every sector and say—what has been done to improve their lot? When
the Nasscom SME movement started in the city of Pune in May 2003, the
"flight to scale" evident in the software services sector had got many
SMEs wondering whether they could scale their own companies and compete on even
terms with Indian and global majors in the immediate future.

A year has passed and there is a mood of optimism that now prevails in SMEs
in many parts of the country, notably smaller towns like Ahmedabad and Pune,
where I have personally had the privilege to interact with many of the small
company CEOs.

Predictably the Infosys wannabes have faded out or decided to switch tracks
but those companies which had strong leadership and a definite "point of
view", be it Vishwas Mahajan and his innovative Project-by-Net firm,
Compulinks, Kaushal Mehta and Gujarat’s first BPO success story Motif, Uma
Ganesh and her band of IIT Kanpur technologists pushing the envelop of Knowledge
Management and e-Learning with Kalzoom or Dhananjay Datar making Documentum sit
up and take notice with their Record Manager product—all these and at least a
dozen others have earned the right to play with the big boys with their
confidence and capabilities.

There are of course no shortcuts to success, but for every CIO or systems
executive reading this column, here goes an appeal to use Indian ingenuity and
product suites to solve typically Indian problems. In every contemporary area
ranging from web services to knowledge management to equity research to wireless
interfaces to specific solutions for retail point of sale systems to investment
banking to healthcare and hospitality products, high quality capabilities exist
built with better quality and significantly lower costs than what global brands
can ever offer to the corporation. And don’t forget, SMEs will take on the
responsibility for tweaking and interfacing their products with most
contemporary ERP suites or legacy accounting systems, thus obviating any messy
system rewrites or reengineering—truly a boon for the hard pressed CIO of
today!

There is a lot for the SME to learn too as the times get easier and more
investment dollars flow into the budgets of CIOs worldwide. The three key ones
are..

n Avoid significant marketing
dollar spends. One wrong recruitment in an expensive market like the USA or
Europe can eat away those hard-earned profits. Rely on web and telemarketing
campaigns from India with occasional visits to meet prospects and of course try
to tap the CIO of large Indian corporations who are facing the same challenges
as their global counterparts.

n Don’t over engineer your
products or solution suites and make them unsuitable for quick customization to
serve specific customer needs. Having a demonstrable framework or solution
template and then installing a customized product for each customer is an
approach more likely to succeed than trying to predict every need of every
customer in the original solution design and satisfying none in the process.

n Shorten the P2P (Path to
Profitability) cycle by using a judicious mix of products and services and
partnering with larger firms and even forming "zaibatsus" or
collaborative consortiums of complementary SMEs to service customers in a
specific domain.

There is still a lot to be done and "miles to go before we sleep"
but SMEs are tasting success and with some well chosen strategies and quick
implementation, the IT industry can show the way to many of the other sectors in
building an environment of symbiotic relationships where large and small firms
can coexist and prosper.

Ganesh
Natarajan

The author is deputy chairman & managing director of Zensar Technologies
and chairman of Nasscom’s SME Forum for Western India