Strengthening SMEs to fulfill their Ambitions.

We all know of a successful restaurant that starts a second restaurant in another location, and then fails. There are others which go on to become a nationwide chain. What is the difference?

Every business starts small. Most are able to grow and some make it to Rs 10 crores. Some become Rs 100 crore businesses and a smaller number cross Rs 1,000 crore. What allows some to grow faster than others? One of the key areas is the ability to scale.

When a business is small most of the important information resides in the CEO’s head. As it grows bigger, there is a need for automation, but mostly that is solved by a basic spreadsheet. At the next stage of growth the company invests in financial services software. Unfortunately, for many organisations this is where the journey stops.

This impacts the ability of the organisation to scale and replicate. Today, even a moderate size business can have over 1,000 transactions per day. It is important to be able to capture this information and retain it, in order to be able to learn from it. Are they repeat customers? Can we give them an incentive to return? There is so much of knowledge buried in the transaction data. In the absence of a data-centric strategy, it is likely to remain a buried treasure. Mr J C Jha, VP Manufacturing, National Engineering Industries comments that “In today’s age of competition it is impossible for our business to run without SAP.”

So, why do enterprises hesitate to make the leap? In the past, in order to have automation or CRM software implied a large investment in hardware. The software also required a fixed outlay. More than the investment, many smaller enterprises, more so those outside the metros, were hampered by the lack of skilled technical resources. All of this conspired to keep businesses from unlocking their true potential.

To quote Mr K L Jain, Secretary General, Rajasthan Chamber of Commerce, “With SAP solutions, Rajasthan state will surely benefit and will also help in further expansion of SMEs.”

What’s changed? What makes it possible for firms to now cross the IT barrier to grow their revenues 10x? One is that the cost and complexity of hardware has dropped dramatically. The second is the advent of hosted (cloud) solutions. This allows the software to be hosted remotely and also managed easily. These options cut time to go-live and also reduce costs considerably. And added advantage is that cloud solutions are built on a gold-standard process, so just by adopting them you can get a leap ahead in quality of process too.

Of course, accessibility may still be a concern, which is why efforts such as SAP’s Innovation Express that is completing a tour of 12 cities across 4 states is a great initiative. To quote Mr Arun Kumar Bagaria, Executive Director of Mayur Unicoaters, “We were extremely amazed to see the bus. It really helps to understand the solutions first hand and in such quick time.”