AMI Partners specialises in analysis of Information Technology, Internet and telecom trends in the small and medium enterprises segment at a global level. The New York-based research firm has tracked Small and Medium Enterprises in 30 countries and has identified high-spending units or clusters. In December 2008, AMI launched a survey, ‘Quarterly Pulse’, in eight countries — including India — to reflect the impact of the current downturn on SMEs. Chairman & CEO Anindya Bose told Pradipta Mukherjee that AMI had revised the SME growth outlook for 2008-2012 from 20 per cent to around 15 per cent.
What does the ‘Quarterly Pulse’ cover?
AMI decided to launch a quarterly survey of SMEs to monitor the impact of economy on these. We will track relevant parameters. For instance, how have the SMEs fared over the relevant quarter and their plans for the next quarter; IT-related actions and plans, which will include a mention of purchases made in the quarter and investments in IT products.
We will also document services required for the next three months and try to reflect the units’ attitude towards IT. We will also try and identify patterns in how SMEs view IT and the impact of this pattern on their businesses including software-as-a-service , IT-as-a-service and managed services.
What did your surveys suggest?
Our surveys said that 60 per cent of the units were very concerned. Most were fearful that the situation would get worse. The remaining were unsure. Our surveys also revealed that SMEs will grow at close to 15 per cent between 2008 and 2012. This is a downward revision from 20 per cent growth we had initially projected. In our next few quarterly reports, we may have to revise SME growth projections.
Any positive results from the survey?
The majority of the Indian small enterprises are in the first wave (building infrastructure stage) of IT adoption. There are nearly 2.5 million non-PC small units in India. Our surveys indicate nearly 22 per cent of these non-PC units have plans to invest in computers for the first time over the next year. This will also boost spending in other IT categories such as software, services, security, and others.
How has the sector taken to recession?
India has 4 million small units. Of these, around 1.5 million use PCs. Our surveys are based on PC-owning SMEs. We have identified a distinct category of SMEs which we have categorised as ‘concerned SMEs’. These are small enterprises which have expressed their concern with the current economic scenario and state that general business conditions will get worse in the next 12 months. This segment of concerned SMEs earn higher revenues, make quick decisions, have a larger branch network and a bigger mobile workforce, and are thus more concerned about the current economic downturn.
What are the measures taken to tackle the slowdown?
Around 50 per cent of the units are cutting down or planning to cut down on travel and office stationary expenses. Interestingly, nearly 40 per cent of SMEs surveyed want to utilise and leverage technology to increase the efficiency of processes. Some units are also adopting certain technologies to bring down cost of operations like customer-relationship-management (CRM) solutions. Nearly 60 per cent of the SMEs surveyed said that they would invest in improving employee productivity by investing in training and processes.
More From This Section
Over 90 per cent of the units surveyed are of the opinion that they would look at customer retention by offering more bundled by-products, promotions, rework pricing strategy, flexible payment terms, and adopt more service-oriented behaviour towards customers.
What are the issues small units are facing today vis-a-vis IT solutions?
Typically, small units go through three distinctive phases of IT deployment — from building infrastructure solutions (Wave I) to deploying connectivity solutions (Wave II) and ultimately enterprise solutions for extending their business reach with remote locations, customers and business partners (Wave III).
The majority of Indian small enterprises are in the first wave of IT adoption, but are fast adopting new technologies to move to the second level. Security, storage and high-speed Internet are some of the areas that these units are looking at.