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Cloud for SMEs
Cloud for SMEs

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Building Stronger SMEs, on the Strength of the Cloud

Over the years, a large number of small and medium enterprises (SMEs) in India have kickstarted the process of adopting digital practices, including Cloud, to grow and expand in different ways. Consider the following instances:

Digital adoption helped Delhi-based social enterprise, Swechha, to launch “Million Kitchen”. An initiative aimed at empowering 20+ women chefs from the slums of Delhi to be part of a mobile-based home food delivery platform. The mobile application operates on the principle of “hyperlocal homemade food on the cloud”.

Furthermore, Punjab-based Precision Machines & Automation (PMA), a manufacturer and exporter of carbon folding machines, expanded its business and built awareness around its products by strengthening its digital footprint.

India has approximately 6.3 crore MSMEs. The sector forms the backbone of the Indian economy, contributing significantly to employment generation, innovation, exports, and inclusive growth. 2020 was a phase of evolution for these midsize organizations. It has been an experience that has required great foresight, agility, and flexibility. Traditionally, SMEs have operated with a mix of manual processes, accounting software, and disconnected point solutions. But as an organization grows and enters new markets processes start to become more complex. Without a reliable technological foundation, many find themselves folding under the strain.

However, the pandemic also accelerated the digitalization process across industries, creating a more level playing field between larger and smaller businesses. Heralding the digitalization of industries all over the world is cloud computation. A stronghold for large organizations for some time now, we see an uptick in the number of SMEs joining the bandwagon.

Leading India’s e-revolution

As SMEs become more aware of digital transformation and cloud adoption, a paradigm shift is taking place in the conventional ways of business. The pandemic has led them to spend more on infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS). Digitalization opened the gates for many local businesses to strengthen their operations and cope with these stressful times. Chhattisgarh-based Gimbooks, which offer cloud-based business management and accounting services to SMEs, saw its platform grow from 2X-3X between March 2020 and June 2021[1].

According to a report by KPMG, digitally engaged SMEs have nearly twice the revenue growth as compared to offline SMEs[2]. As they enhance their digital engagement, they are more likely to upgrade their legacy systems. The results? They capture greater efficiencies and benefit from improved profitability.

Cloud also offers a gateway to the world of analytics, especially for small to midsize organizations. Data analytics provides the insights that a business needs in order to know where its potential market lies, which clients to target, how to target them, and where to focus as part of the business strategy. Unlike offline storage, where everything is kept under lock and key with its availability subjected to one person, it is available to all relevant stakeholders. To provide further impetus for cloud adoption among SMEs, the MSME Ministry—under the “DIGITAL MSME” scheme—disburses a subsidy of Rs 1 lakh to encourage them to use cloud computing for information and communication technology (ICT).

Other than simplifying collaboration and teamwork, cloud computation also provides an outlet for SMEs to unify all core functions in an end-to-end business suite by offering SaaS applications. Take the case of a market intelligence and research solutions firm that implemented similar software to achieve integrated systems across functions. This ensured scalability and information visibility, enabling the firm to fuel revenue growth while they continue to seek operational excellence. Such software allows SMEs to turn their CAPEX into OPEX as they reap the dividends of cloud technology.

Making SMEs more efficient

The $950-billion market SME sector is set to dominate this decade’s business landscape!

And why not? Employing more than 110 million people, the nation’s growth is intrinsically linked to the growth of SMEs[3]. Aiding in their continued performance is an ecosystem of aggregators, tech ISVs, large enterprises, government, and NGOs, who are playing a crucial role in SMEs’ transition to ‘digital SMEs’. Indiamart, for instance, connects about 5 million enterprises to 82+ million buyers. Similarly, India’s fastest unicorn, Udaan, serves more than 150,000 SMBs with mobile-first and Cloud-first tech solutions.

The government has taken several initiatives including upgradation of technology centers across the country and setting up of 15 new centers. To facilitate technology upgrade among SMEs, it has also started the Credit Linked Capital Subsidy Scheme with objective of providing a subsidy of 15%. Many other programs are supporting SMEs through skill development, fund generation, and awareness on IPR.

Building an SME-driven Cloud hub

Cloud technology doesn’t remove human intervention completely but offers a pre-configured package that comprises of digital book-keeping, CRM, and ERP to address multiple business aspects. Moreover, cloud computing has moved beyond conventional services such as data storage and back-up and have begun to incorporate next-gen technologies like artificial intelligence (AI), machine learning (ML), and Internet of Things (IoT). This will further boost process automation, reducing human mistake and streamlining manual frameworks.

For India’s 1,000+ SaaS companies, the SME sector presents an untapped opportunity. Of course, cybersecurity needs to be woven in the core design for cloud solutions. In the past year alone, we have seen a 300% rise in cyber attacks. A secure environment is a critical component for SMEs to provide a frictionless digital experience to their customers. As more data moves to the Cloud, user rights and access must be well defined.

In conclusion

In the contactless world we are in, business models will continue to change massively. Long gone are the days of viewing strategies through a transactional lens. SMEs must think of themselves as digital enterprises and Cloud offers the way forward. Fostering an ecosystem of innovation, syncing up data, strategies, and operating models, small businesses will be more in control of delegating tasks efficiently. Thus, practising a faster and more innovative approach for customer experience and business expansion.

While the government is doing its part with subsidies and free solutions to make these organisations future-ready, large enterprises can further bridge the gaps. Digital literacy programmes, easier availability of modern technology, access to global marketplace, simplified digital payments platforms, and other solutions will empower Indian SMEs with a competitive edge.

 

 

About the author

Subbu

  Subramanian Ananthapadmanabhan (Subbu)

  Vice President – Midmarket, SAP Indian Subcontinent

 

 Subramanian Ananthapadmanabhan is the Vice President – Midmarket for SAP Indian subcontinentHis priority is to develop strategic initiatives aimed at enablement and growth of the Indian SME/MSME sectorwhile ensuring orchestration across partners and SAP to provide seamless and unified experience for customers.  An established business leader in the industry, Subbu brings more than two and half decades of technology consulting, digital and sales experience. Prior to joining SAP, he has held several leadership roles in driving software business for top technology companies including Oracle, IBM and Wipro. Subbu is an MBA and holds a Bachelor’s degree in  Instrumentation Engineering.

 



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