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‘SMAC - the next growth driver for SMEs in India’

India Infoline News Service | Mumbai |

Indian SMEs to increase cloud adoption at a CAGR of 20% between 2012 and 2016 as per EY’s latest report on SMAC - Social Media, Mobile, Analytics and Cloud Technologies

India’s Small & Medium Enterprises (SME) sector has been one of the primary drivers of the country’s economy. SMEs account for 45% of India’s total manufacturing output and employ around 40% of its workforce. The sector’s contribution to India’s GDP is expected to increase to 22% in 2020 from 17% in 2011. The last few years have seen SME’s recognizing technology as a key business driver, but its adoption is still low, as compared to other countries with large SME setups.
 
The subject of Social, Mobile, Analytics, and Cloud (SMAC) has been dominating debates across the world over the last 12–24 months. In India, the time is ripe for SMAC to finally move from being a hot trend to a business reality. SMEs will play a leading role in the adoption of SMAC in India, given the huge opportunity it opens up, not only to grow revenues by increased marketing to new customers, but also by bringing in operational efficiency and  customer experience.
 

Says Samiron Ghoshal, Partner & Leader-IT Advisory Services, EY, “the murmur around the disruptive forces of Social, Mobility, Analytics & Cloud have turned into a clamour as enterprises find themselves involved in a competitive push to be “cheaper, better, faster” than their peers. As with the telecom, where the low penetration of landline precipitated India’s growth in mobile telephony, Indian small & medium enterprises finds themselves in a unique position to exploit these forces. Intelligently and cohesively exploited these technologies will transform the way they compete with their larger competitors”.
 
This is an opportune time for SMEs to leverage this wave of technology with defined business strategies across the different sectors in India. In the last few years, three fundamental forces have been shaping the need of SMAC strategies for industries -

First force — emergence of young middle class in India
Second force — ownership and penetration of technology in urban and rural India: India is the second- largest country in the world with regard to its number of mobile phone users. Its high-end smartphone market grew by 229% y-o-y in 2013 with more than one million rural users accessing the internet through data connections on their mobile phones.
Third force — rise of social networks in India: The average Indian user spends more than 29 minutes on social media platforms and 77% access these on mobiles. Its estimated that the user base of social networks in India will rise to 550 million people by 2020.
 
These multi-dimensional changes and the dynamic business environment in the country provide an attractive opportunity for SMEs to surmount traditional barriers and engage stakeholders across wider communities in a targeted manner. SMEs will thrive if key enablers powered by SMAC technologies are created in integrated ecosystems to support their multiple needs of knowledge accessibility, financial independence and risk mitigation, targeted marketing reach and sales, operational excellence, efficient services provisioning, real time insights and decision making.
 
Indian SMEs are expected to increase cloud adoption at a CAGR of 20% between 2012 and 2016. The demand for cloud services by SMEs is particularly high in the areas of disaster recovery, remote database management and e-mail hosting.
 
Greater adoption is leading to a significant shift in the number of providers offering cloud-based services. The total number of channel partners catering to SMEs in India increased by 10%-15% year-on-year in 2013, while the number of cloud channel partners increased by 25%-30%.
 
“It is necessary for certain sectors/industries, including government bodies, with wide and multi-industry customer engagements to leverage SMAC technologies to create and nurture an ecosystem  that will enable SMEs to do business better and garner relevant insights to streamline their operations and build a much stronger relationship with organizations”, 
says Samiron.
 
Despite acknowledgement of positive results from past technology initiatives, adoption of SMAC technologies is taking time, and results from successful cases are facing criticism, as in the case of any new technology initiative including ERP, CRM, SCM, etc. However, traditional models are being digitally displaced at very rapid pace. Businesses need to navigate and ride this disruptive technology wave to emerge as winners or they face the risk of being marginalized by their competitors.

 
Digital transformation needs to start at the top. Business leaders need to take charge of creating digital strategies, since this is challenging because of the nascent stage of the technology.
 
The most common mistake made by organizations while leveraging SMAC is to directly develop applications and implement related initiatives. In India, this is primarily due to the fact that enablement of technology can be achieved at a minimal price. However, lack of a robust business and digital strategy will only lead to another “me too” initiative and will fail to generate the desired results in areas including marketing, sales, service or operations.
 
SMAC technologies have become so advanced, affordable and pervasive that they are now available to businesses of all sizes. This is opening up an opportunity for SMEs to level the playing field and compete with larger players. The need of the hour is for SMEs to take the lead in adopting SMAC and make it an integral part of their business strategies. Those that are successful in understanding the power of SMAC and harnessing it across their businesses will lead this new wave of growth.

 

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