 "Global competition key issue for Indian SMEs, says study")
Increasing global competition is the greatest issue affecting Indian small and midsize enterprises (SMEs), with 43 per cent citing it as a top concern (the global average is 26 per cent), the highest ranking among all countries featuring in a new study. Economic uncertainty (34 per cent) and shifting customer expectations (29 per cent) are distant second and third concerns.
The survey of 2,100 executives across 21 countries (100 per country) and five industries, for SMEs: Equipped to Compete, a research study conducted in April and released earlier this month, aims to better understand how SMEs around the world are leveraging technology to boost innovation, strengthen customer relationships, improve agility, and expand their businesses. The study was conducted by SAP and Oxford Economics.
Global expansion is cited by 58 per cent as the key to growth, followed by innovation, cost reduction, and efficiencies (45 per cent) and expanding products and services (35 per cent). Eighty-three per cent say they now compete with larger firms to a greater extent than in the past.
"There's been a basic change in mindset. Earlier, SMEs did not look at inducting new technology, but a new generation is looking at it as a way of creating efficiencies. We have seen SMEs adopt new technology faster than even larger enterprises," said Priyadarshi Mohapatra, vice-president, ecosystem, channels & general business, SAP Indian subcontinent.
He cited the use of technology tools such as business management software, mobile technology, analytics and social media, in a bid to drive cost efficiencies, optimise the supply chain, improve product and service development, and improve innovation.
Indian SMEs are aggressively expanding their global reach, the study reveals. Only two per cent generate no revenue outside the country today, and this will fall to just one per cent in three years - the most "globalised" of all the countries surveyed. Nearly half (48 per cent) expect to be generating 21-40 per cent of their revenue globally in three years.
A mere three per cent of Indian SMEs expect to be operating only in their home country in three years (down from 13 per cent today), and the number operating in six or more countries will rise from 24 per cent to 56 per cent (compared with a global level of 15 per cent and 35 per cent, respectively.
Understanding the need to adapt to an increasingly global marketplace, the vast majority of SMEs in India have either recently completed, are in the middle of, or are about to begin a significant business transformation. A key reason for transformation is to capitalise on growth opportunities in expanding markets, while entering new geographic markets is seen as the key challenge of transformation.
"Indian SMEs are now doing business across the world, including Europe and the US. They are also increasingly looking at emerging markets," said Mohapatra, giving the examples of verticals like cycle parts, paints and pigments, and packaged foods.
Among the Indian SMEs surveyed, 38 per cent were from discrete manufacturing, 23 per cent from professional services, 19 per cent from consumer products, 12 per cent from retail, and nine per cent from wholesale. Thirty-eight per cent of respondents were C-level executives, with 20 per cent CIOs or head of IT.
Roughly one-third (32 per cent) of the surveyed firms have revenues of $20m-99m; and 36 per cent had revenues between $100m and $249m. Asked whether the results of the study would have been any different if companies with revenues as low as $5-10 million had been surveyed, Mohapatra said it would have made little difference, because the change of mindset among SMEs was very evident.
The survey of 2,100 executives across 21 countries (100 per country) and five industries, for SMEs: Equipped to Compete, a research study conducted in April and released earlier this month, aims to better understand how SMEs around the world are leveraging technology to boost innovation, strengthen customer relationships, improve agility, and expand their businesses. The study was conducted by SAP and Oxford Economics.
Global expansion is cited by 58 per cent as the key to growth, followed by innovation, cost reduction, and efficiencies (45 per cent) and expanding products and services (35 per cent). Eighty-three per cent say they now compete with larger firms to a greater extent than in the past.
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Among other key findings, 57 per cent of Indian firms say they invest in new technology only when there is a clear return on investment (earlier, technology was not on their radar); 77 per cent are increasingly focused on new geographic markets; and 93 per cent have either completed, are in the process of, or are about to begin a significant business transformation.
"There's been a basic change in mindset. Earlier, SMEs did not look at inducting new technology, but a new generation is looking at it as a way of creating efficiencies. We have seen SMEs adopt new technology faster than even larger enterprises," said Priyadarshi Mohapatra, vice-president, ecosystem, channels & general business, SAP Indian subcontinent.
He cited the use of technology tools such as business management software, mobile technology, analytics and social media, in a bid to drive cost efficiencies, optimise the supply chain, improve product and service development, and improve innovation.
Indian SMEs are aggressively expanding their global reach, the study reveals. Only two per cent generate no revenue outside the country today, and this will fall to just one per cent in three years - the most "globalised" of all the countries surveyed. Nearly half (48 per cent) expect to be generating 21-40 per cent of their revenue globally in three years.
A mere three per cent of Indian SMEs expect to be operating only in their home country in three years (down from 13 per cent today), and the number operating in six or more countries will rise from 24 per cent to 56 per cent (compared with a global level of 15 per cent and 35 per cent, respectively.
Understanding the need to adapt to an increasingly global marketplace, the vast majority of SMEs in India have either recently completed, are in the middle of, or are about to begin a significant business transformation. A key reason for transformation is to capitalise on growth opportunities in expanding markets, while entering new geographic markets is seen as the key challenge of transformation.
"Indian SMEs are now doing business across the world, including Europe and the US. They are also increasingly looking at emerging markets," said Mohapatra, giving the examples of verticals like cycle parts, paints and pigments, and packaged foods.
Among the Indian SMEs surveyed, 38 per cent were from discrete manufacturing, 23 per cent from professional services, 19 per cent from consumer products, 12 per cent from retail, and nine per cent from wholesale. Thirty-eight per cent of respondents were C-level executives, with 20 per cent CIOs or head of IT.
Roughly one-third (32 per cent) of the surveyed firms have revenues of $20m-99m; and 36 per cent had revenues between $100m and $249m. Asked whether the results of the study would have been any different if companies with revenues as low as $5-10 million had been surveyed, Mohapatra said it would have made little difference, because the change of mindset among SMEs was very evident.