In order to sell technology to small and medium businesses (SMBs), Tata Consultancy Services has decided to make technology more affordable, relevant and easy for them. After meeting representatives of almost 250 SMBs across the country, the company’s SMB Global Head, V Ramaswamy, found that SMBs lacked simplified technology. He speaks to Pravda Godbole about SMBs’ need for simplified technology. Edited excerpts.
What common technology problems do small and medium businesses (SMBs) face?
Owners buy personal computers, then go in for networking PCs, after which they buy some office software, accounting software, and as the customer base increases, customer relationship management (CRM) and enterprise resource planning (ERP) solutions are needed. Since technology develops fast, in no time hardware stops supporting ERP and the software becomes redundant. In this whole equation seven to ten vendors like Microsoft, Tally, Dell, etc, are roped in. This has to be made less complicated and there has to be one all-encompassing offering.
What solution has Tata Consultancy Services (TCS) come up with?
Computing on the cloud with IT as a service is a catalogue model. It is a service with an integrated model of 11 softwares and networking hardwares with different layers. One is a common office solution including document spreadsheet, power-point presentation, email and chat. The second layer has basic business applications for finance, accounting, HR, payroll and CRM. The next layer is a core reactive solution which will change according to industry. The last one provides analytic solutions. As the company gets bigger, one can add solutions from the catalogue.
What is the payment model for this service?
We call it PUMP: per user monthly price. It is not pay per usage, it is pay per user. So, what we do for different segments is based on the set of solutions that they consume. The fundamental intent of doing this is less capital investment.
Does TCS want to focus on any specific sectors?
Today, approximately 47 per cent of micro, small and medium enterprises exist in the manufacturing space while retail and wellness industries are enjoying a year-on-year growth rate of close to 18 per cent in terms of IT spend.
What did the SMB players tell you when you met them?
I tried to understand how all of them consume IT and I learnt that they face a lot of cash flow challenges. SMBs have to manufacture and sell to get some cash in and to be able to manufacture the next batch. Also, if paying people on time is a major block, how can they even dream of spending on IT?
How different are government policies for SMBs in other countries?
The basic difference is the IT support that governments across the globe extend to SMBs; and secondly, ensuring that there is no misuse of policies, which often happens in India.
Is TCS doing something about that?
We have proposed to the government to consider starting a Technology Adoption Fund. Through this the government can support SMBs with technology adoption, giving some impetus for SMB product technology. This fund has the potential to reduce carbon content to the extent of 30 per cent. The government has a huge role to play.
We are also looking at another project called Green Fund. The government would encourage SMBs to pollute less by having a very light IT footprint, helping them trade carbon emissions effectively. So, a small company would have reduced carbon emission by using TCS’s IT service. If you are a small company and if you can demonstrate that you are reducing carbon emission, you can get loans at much better interest for technologies that can enable a reduction of COP.
How will it work?
The National Small Scale Industries Corporation, one of the successful PSUs, will appoint someone to administer this and they will enlist a set of providers who SMBs can contact in order to consume IT. It will work in such a way that we give Rs 100 worth of service to SMBs, they can use and demonstrate to the government and take a subsidy of 25 per cent from that.
Do SMBs fully exploit the power of IT?
If I have to put a percentage to it, it will probably be 10 per cent.
The key therefore is to keep it simple?
There are five basic principles to make IT uncomplicated — it has to be fit for its purpose, highly useable, integrated, accessible and secure. Things constantly keep changing in a company set-up, so solutions have to be built in such a way that they can be configured continuously. As complexities grow, the cost goes up.
