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The Small and Medium Enterprises (SMEs) contributes 45%* of the industrial output and 40%* of exports in India. In addition to this they employ around 60 million people. The SME contribution towards GDP was around 17%* in 2009 and is expected to reach 22%* by 2012. Going by the numbers the SME chamber of India claims there are 26.1 million MSME Units in India.

 

Given the facts and figures, we definitely have a huge A help solving some of them.

 

Most of them do not have adequate and timely banking finance. This reduces the economic stability of the organization while staggering further growth options. Most have limited knowledge of their field of operation and this is a major setback, considering the cut throat competition from bigger players. Highly skilled labour is not available at an affordable cost. Adding to this they also face non-availability of suitable technology both in manufacturing and operational areas.

 

Often due to missing use of technological advancement, the production capacity is reduced. Marketing and identification of new markets is another area of improvement for most of them. This is an area where IT can provide value-add to SMEs. With the given production capacity the planning can be improved to utilize the resource capabilities. Marketing and customer relationship management would also be more organized and result oriented with IT enablement. In addition to this, IT can help in efficient use of human resources. With the right kind of information available, the risk mitigation would be higher and thus they gain a competitive edge.

 

SAAS solutions have gained momentum in the last few years mainly due to lesser capital investment. The whole cost of setting up IT infrastructure and maintaining it is erased thanks to SAAS. With SAAS also comes the benefit of using the industry best practices. Tailor made processes help increasing the operational efficiency. In addition to this most of the SAAS offerings allow customization possibilities to reduce the gap between the tailor-made and the required solution.  More so, the increasing penetration of telecom providers and internet usage has fostered SAAS further.

 

All of this definitely makes SAAS the most suitable option for SMEs, SAP Business ByDesign being one of them.

 

 

* Facts and Figures courtesy SME Chamber of India

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