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Thinking Big

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DQI Bureau
New Update

Indian SMBs are big in their numbers and big in aspirations. They are also
impacting the rate of IT adoption in India. As a result, today, SMBs are one of
the most preferred customers in the Indian IT industry.

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A recent study by AMI-Partners revealed that despite the challenging economic
conditions, IT and telecom (IT&T) expenditure by small and mid-sized businesses
in the Asia Pacific region will reach $153 bn in 2009. Indian SMBs are the
fastest growing pool in the region with a forecast of 8.5% growth in IT&T
spending over the last year, and nearly double the average of 4.5% growth
projected for the APAC region. The study also noted that Indian SMBs are
increasingly becoming aware of issues such as RoI, TCO, and scalability of
business.

India is a hotbed for SMBs, as they mushroom in tier-1, 2, and 3 cities,
presenting ample opportunity for IT vendors. Indian SMBs are witnessing the need
and impact of technology adoption, and are setting benchmarks on how companies
from the emerging economies can utilize innovative technologies. In an attempt
to gain a strong foothold in their respective domains, SMBs are seeking ways to
thrive in their new ventures and gain optimum operational value from their IT
investments. The country has also witnessed tremendous traction by SMBs in
tier-3 cities and rural regions due to increased Internet and mobile access.

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Vendors aim to tap this segment by offering customized products/solutions
that suit the unique requirements of the respective industry/vertical to enhance
their business, productivity, and RoI.

In order to sustain themselves in the competitive marketplace, SMBs need to
differentiate themselves by improving significantly in terms of their business
processes, personnel, infrastructure, and products. To address these
requirements, IT will be instrumental in enabling businesses to set a framework
for processes, systems, and sound business practices.

But, even SMBs have to confront various challenges in their path to IT
adoption. One such pain point is the risk and complexities involved in exploring
new avenues. SMBs look for cost-effective solutions that can be deployed and
managed easily, and refrain from spending extensively. Another major bottleneck
is the lack of a clear understanding of technological requirements, sourcing the
right kind of IT infrastructure and maintenance for sustainability. Hence, it is
essential to employ the right resources to manage IT infrastructure. By and
large, the markets that SMBs operate in are fragmented and not organized, a
factor capable of blurring business vision and resulting in vulnerability to
market fluctuations. Adding to this, issues such as lack of exposure to best
business practices, considerable delays in the settlement of dues by large-scale
customers, and absence of transparency in financial information systems,
compound their IT adoption preferences.

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In the wake of the current economic scenario, SMBs will have to consider a
set of critical parameters like TCO and environment while engaging in a
decision-making exercise.

TCO: While evaluating the total cost of ownership of an IT product or
service, it is important to factor-in the expenses that will be incurred during
the entire lifecycle of the product. These include repair and maintenance, spare
parts, add-ons, upgrades, depreciation, apart from the initial capital
investment. A budgeted approach prior to the purchase decision ensures
transparency on the actual investment expected to be made by the company, as
against the company.

Environmental Considerations: With voluntary corporate conformity to
environmental regulations increasing by the day, SMBs are not far behind. New IT
purchases will have to be in the interest of reducing carbon footprint, while
ensuring savings on power consumption. There are options galore in the market
for energy-efficient offerings tailored to varied requirements. Leading IT
vendors have been launching innovative solutions that adhere to international
energy and environmental benchmarks like EPEAT and Energy Star.

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In terms of reach, IT vendors will need to tap the market opportunity with a
well-professed distribution strategy which will give them the reach to SMBs
across India in tier-2 and 3 cities and not just metros. The path forward has
been clearly defined by market dynamics, and evolution is waiting to happen!

Jaivinder Singh Gill,

The author is executive director, relational business, Lenovo India

maildqindia@cybermedia.co.in

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