The size of the SME market in India is too big to be neglected. And while technology players normally chase the large enterprise segment, it is important for them to know some more details. These details will further augment our belief that the SME opportunity is huge in India. After the US, India houses the second largest population for SMEs. Did we ever realize that these small and medium businesses give employment to nearly 75% of India’s workforce?
Alright, the opportunity is huge. But where does the problem lie. Why are the SMEs low on technology adoption? I feel the biggest challenge facing SMEs today is the technology hygiene. The first biggest handicap is the basic automation of an SME (the ERP). I have generally found that whenever ERP solution providers approach SME organizations, the first few questions asked are embarrassing to the latter. What’s your revenue? What is the geographical spread? How many branches? How many users? What is the correlation between an ERP solution for an SME and its size, turnover or geographical spread? Ideally these questions should not be part of the discussion. They shall instead be asked: What are your pain areas? What are your key expectations from an ERP? An ERP vendor should be able to help SMEs find the answer to their pain areas and not adding to it. They shall be able to ease the complexity rather than puzzling them further.
In a country where just a little over 10% SMEs use systems and technology, it is difficult to cope up with such a treatment. Although the Indian SME sector (predominantly manufacturing) has clocked a sustainable growth of 15-18% in past two to three decades, their understanding of technology-enabled growth is little as compared to new age companies or companies which are large in size and can’t live without information technology.
Technology vendors instead of considering this space as an opportunity, make it complicated for them. While the SMEs look forward to a great, promising future, there still is a need for customized and much palatable solutions, which fit their budget and the nature of their business.