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Technology

Time for SMEs to adopt ICT

Dolly Bhasin
Jan 2009

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Information and Communications Technology (ICT) needs of SMEs vary according to their ICT awareness and scale of operations.

However, in general SMEs resources are limited and manpower including management time and financial means are both constraints for them. SMEs therefore try to focus their resources on their core business and on daily operations, the ICT requirements that can support their core business, work well, are user-friendly, easy to upgrade and at as low a cost as possible.

This calls for “plug-in solutions”, e.g. in the form of sector specific, nationally adapted packages of standard applications, both hardware and software). Another solution could be “Apps on Taps”, where SMEs use a “dumb terminal” and where the responsibility for upgrades, backup, virus protection etc. are bought on the ICT Service provider for a small fee, on a pay per use model. The new trend is to offer “Software as a Service (SAAS)”.

Access to secure, high speed broadband internet and wireless technologies are also essential for SMEs. But their purchasing power vis-à-vis large national telecom providers are weak and SMEs often get poor access at high prices, whereas large companies can negotiate better deals. Many SMEs also have a significant difficulty in finding reasonably priced software for vertical or specialist areas.

In a continuously shifting operating environment and a rapidly evolving technological landscape, SMEs often face difficulties with software licence management. Rigid licensing policies, overly complex metrics, high maintenance costs, the broad range of available licensing options and pricing models makes it particularly complex for SMEs to comprehend and take a stock of the best solution.

SMEs make up the vast majority of India's innovative community and contribute to economic growth. Profitable market opportunities increase the rate of SME creation. This increases the total number of SMEs in the country, which increases job creation and per capita income. As people become wealthier, they will increase their consumption, which in turn will open up new market opportunities which will entice the creation of more SMEs. Contrary to multinational corporations, the growth of SMEs directly benefits the country because most SMEs are domestic firms.

ICT is one of the key enablers to increase productivity, sustainability and in fostering innovation in SMEs. Therefore, understanding the usage of ICT in SMEs is very vital to us and needs to be examined in greater details.

What is ICT?

Information and Communications Technology (ICT) is the study or business of developing and using technology to process information and aid communications.

Contrary to the general belief, ICT is not Computers or Computerisation. It is also not Internet, nor does it mean Telephony. However, all of these may play a part in effective ICT deployment.

The scope of ICT covers not only the hardware, the software, the systems and applications, but also the connectivity, bandwidth and information that resides in digital form and moved through the communication channels.

While trying to understand the ICT, in context of SMEs, it is important to address two aspects of the same

1. SME ability to compete in the ICT arena

2. SME capacity to benefit from ICT solutions

The first set refer to the vendors and service providers of hardware, software, applications solutions, ISPs, turnkey service providers, Web hosting companies and consultants who are themselves SMEs. Whereas, the second set of SMEs, refers to the ICT users from various Industry verticals and Business Enterprises.

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