Importance of the SME Sector
With close to 50 million units,
the Small Medium Businesses sector (defined as companies in the 1 to 999 employee size) in India is
one of the largest in the world in terms of number of units. More than 90
percent of these SMEs are very small enterprises with less than 10 employees.
The SMB sector plays a very
crucial role in the economy in terms of contribution to the GDP as well and
generating employment opportunities.
It is therefore important to
improve the overall health of this sector and ensure sustainable growth.
Problems it Faces
SME’s today have to contend with
the forces of globalization, rapid technological changes, ever increasing
competition, and rapid changes in consumer need and behavior. These challenges
have only got compounded by the overall slowdown in the economy and subdued
consumer sentiments. SME’s today not only compete with similar sized
organizations, but also larger corporates who in current difficult economic
scenarios are expanding their product footprint to compete with SMEs.
Being informed is one of the
methods to be competitive. And when it comes to being informed, continuous flow
of information is required.
DATA EXPLOSION –
Advantages
Data explosion among SMEs has
been caused by IT applications and email. The deployment of IT applications
such as ERP and CRM has ensured that organizations generate excessive digital
information. This information can be used to draw deep and impactful insights.
Along with the internal data
there is a lot of information available through external sources like the
social media. The main advantage this type of data offers is real time
information, which can greatly reduce the time lag between the accumulation and
analysis of data, and subsequent responses. Real-time customer expressions of
brand experiences online have the power to influence business performance more
than before. Social media interventions effectively manage escalations and
customer dissatisfaction thus bringing you closer to your customer’s opinion.
Given that context, SMEs need to
enhance their competitiveness through use of technology and data driven
decision making process, while keeping the nimbleness in business intact.
Business Intelligence enabling
right decision making becomes highly important, ensuring
ü Better
ROI
ü Faster
Break Even Points
ü Channelizing
Expansion
ü Risk
Mitigation
ü Sustainable
Growth through Meaningful and actionable insights
ü Enhancing
Marketing and Branding Efforts
DATA EXPLOSION -
Pitfalls
Investment Needed
- Even when they adopt IT, the focus for SMEs is initially on basic computing
hardware, networking and core business applications. Business intelligence
adoption is limited to those SMEs who are at the top end of IT maturity and
adoption. Most of these are the larger SMEs (500 to 999 employee size). SMEs
should not get drawn into doing things the “Big Bang” approach with respect to
implementing BI and Data Analytics, as it will delay the impact of these
initiatives for business results. Incremental and steady approach will always
have better ROI and faster break even points for the SMEs as it will
demonstrate the benefits quite quickly and give flexibility to make adjustments
if needed.
Requirements
vary from business to business – SME’s have varied
requirements ranging from managing customers to Operations, HR, Finance and other business
areas. Their requirements also vary because with respect to domain needs. Today
SME’s have a wide range of options when the start thinking of business
intelligence solutions. There is an ever growing network of channel partners,
that cater to SME’s, who are able to bring in a range of solution and are able
to customize them for SMEs.
Acceptance
and applicability - For years, before these sophisticated
techniques of analytics were developed, executives have relied on expertise of
their experience and on ‘gut’ feeling to make decisions. Hence the acceptance
of Analytics and Big Data Analytics among the business users is key issue which
need to be tackled before investing in Big Data.
Bypassing Basics
- SMEs should watch out for is not to get carried away with things like “Big
Data” at this stage (things which are getting lot of “attention”) till they become
mature with respect to BI and Data Analytics. However as part of all
initiatives related to BI and Data Analytics, they should keep future
applications like ‘Big Data” in perspective while designing the BI and Data
Analytics infrastructure.
Channelizing for profit maximization
Analytics as an area of expertise has evolved
beyond creating sophisticated tools to sift data. It is more about how
to deliver value by increasing revenue, profitability or the customer base
Detailed Analysis+Targeted
Marketing = Higher Profits
SME's should focus around
- Value creation and insights from diverse data sets;
- Specialized intelligent solutions keeping in pace with latest socio-economic trends;
- Optimize business processes through smart evaluation of programs
