Helping SMEs adopt ICT to compete & grow

The micro, small and medium enterprises (MSME) landscape has reshaped significantly in the last few years, thanks to increasing competition, technology development and cost pressures, among other factors. The immense growth in the services segment has given rise to new opportunities and challenges, requiring increased efficiency, productivity and innovation. Small and medium enterprises will have to adopt ICT in their day-to-day business to remain competitive, grow and attract new businesses, especially in the new, globalised and competitive economic scenario.

Considering the MSME sector contributes about 17% of the country’s gross domestic product, more than 25% of the manufacturing output and around 40% of the country’s exports, the sector has a critical role to play in the India Growth story. And there is a renewed and urgent focus on how ICT can help these companies excel.

This, broadly, was the theme of discussions at a workshop organised in Mumbai recently by PricewaterhouseCoopers (PwC), which is currently implementing a project to promote ICT in the SME sector, to improve business effectiveness and create new business opportunities. The e-governance project, called “Economic development through e-Governance,” is a joint initiative of German Technical Cooperation (GTZ), the German bilateral agency, in cooperation with Standardisation, Testing and Quality Certification Directorate, Ministry of Communications and Information Technology.

The project is being implemented by PwC in Maharashtra, Andhra Pradesh and Haryana. The Maharashtra initiative kicked off last month, wherein multiple business associations, service providers and over 100 SMEs participated in a project orientation workshop. The business associations include Bombay Small Scale Industries Association, Indian Chemical Council and Maharashtra Pharmacist Association. Workshops have also been held for Business Association members including Thane Small Scale Industries Association and Kandivili Cooperative Industrial Estate.

The programme is currently under implementation and SMEs have shown an active interest in understanding the various applications of ICT for improving their business performance. As part of the programme, around 170 training sessions in identified ICT areas have been conducted for SMEs across the three states. The ICT areas, identified based on an earlier pilot done in Rajkot and Bangalore, include website & internet marketing, e-brochures, SMS marketing, inventory management, enterprise resource planning (ERP) and customer relationship management (CRM).

The programme structure is simple but powerful, in terms of the potential it has to make a significant contribution to the growth of the MSME sector using ICT. The project ecosystem includes business associations, identified business development service (BDS) providers who would provide awareness trainings in the identified areas to SMEs for a nominal fee. The BDS providers can also help SMEs in implementing the ICT solutions
when they decide to adopt a particular solution, be it in e-brochures,  ERP or CRM.

Thus, it is a win-win story for all stakeholders of the project, including business associations  who are able to provide better service to their members, BDS providers
who provide the awareness trainings and implementation support to SMEs and SMEs themselves who would see tangible results from adoption of ICT. The project seeks to do this by quantifying the benefits of ICT adoption by seeing how many new contacts and customers were generated by adopting e-brochures, or checking for reduction in cycle time and turnaround time by adopting ICT for inventory management.

Thus, a self-sustainable system would result wherein demand for ICT awareness trainings and implementation support services would come from SMEs, which would be
fulfilled by BDS providers and business associations would play a facilitation and mobilisation role and thus be able to provide better services to their members.

The project is expected to be rolled out in more states and also further scaled up in Maharashtra in the coming months. Further, considering the Central government is also in the process of finalising promotional packages for supporting and facilitating the growth of the sector, the SME sector should witness much action. The PwC project could only be the start of an important phase in the growth story of Indian SMEs.

The writer is executive director, PwC.
Views are personal.