For advanced economies SMBs are the engines of growth. It is more relevant with the adoption of IT services by SMBs. It is difficult to compete with Fortune 500 companies if the company is a small IT service provider. But SMBs make things happening and small companies can work with them to remain profitable.

Guidelines on how to successfully conduct IT service business with SMBs.

Look for Smaller projects

When working with SMBs look for smaller and longer projects rather than big projects and short engagements. There is no need to do a large fixed cost project with SMBs. Instead break up the big projects into smaller assignments. Take one project at a time, deploy it, finish it, get payment and then go for the next project.

Change Management

Changes are inevitable for any project and while working with SMBs you have to be comfortable with rapid changes. It is not possible to nickel-and-dime small change requests. But then it is possible to convince the customer of cost and time implications related to a change. The principle of ‘collaboration over contract’ can work good. It is also good practice to record small changes even if you are not charging the customer. What is important is to be flexible and not to raise hue-and-cry for every change request. But at the same it is vital to make the customer understand that changes cost money and time. So, working in short sprints and not making major changes during the sprint can be a good method to execute projects.

Provide solutions Iteratively

While executing a project maintain constant contacts with the client and develop software iteratively. The iteration or sprint should last for 2 to 3 weeks. At the end of an iteration spell deliver working software for the end user and get their feedback. Never impose solutions to clients as they are domain experts though you may be an IT expert.

Hiring developers

While working with SMBs you have to be very judgmental about hiring developers. Hiring developers from big organization may not work as they work in silo environments with analysts documenting requirements, architects designing solutions, and QA team validating results.

In SMBs developers have a greater role to play than just making codes. Direct customer interaction, being a solution architect, business analyst and usability experts are expected from developers.

Reduce Total Cost of Ownership

It is important to make short term sacrifices in order to make long term gains. Trust of clients deepens and it becomes possible to do continuous business by not becoming concerned about immediate cost to the company but concentrating on long term savings. For example, purchasing a commercial database may be more expensive for a company due to the license costs and other future costs involved as the system grows. So, clients need to be educated about the pros and cons of commercial database. Open source can be a good alternative.

Mobile Phone Access

Dependence on Application Programming Interfaces (APIs) is essential as most SMB owners and employers remain on a move and they make use of mobile phones and desktop browsers to receive alerts, realtime data and reports. This helps them to take quick decisions.

Cloud computing Dependence

Investing in capital items like servers and firewalls may not be all that fruitful for SMBs and startups. It is an expensive proposition as they have to employ people for running it effectively. Instead signing with cloud computing service providers may be much more beneficial as they offer a pay-as- you-go-model. There is zero upfront capital investment and there is the option to scale higher with the business development.

Open Systems

To build a subsystem can be necessary for making an integrated system. Software as a Service (SaaS) application that provide project management, document management, timesheets, expense tracking, accounting, and payroll services can be ideal. This will help speed up the system development process and help to create integrated system experience for your client.

Tags: APIs, Change Management, Cloud computing Dependence, collaboration over contract, constant contacts with client, engines of growth, Hiring developers, Mobile Phone Access, Open Systems, small companies, Smaller projects, SMBs
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Seeing the capability of SME in executing projects, the Union ministry is considering reserving 10 percent of IT enabled projects for Small and Medium Enterprises (SMEs). The proposal is being circulated among the state governments to get a better response and to receive recommendations from stake holders. It is expected that the companies will get direct orders and even if the projects are given to big companies there will be provision for outsourcing 10 percent of the orders to SMEs.

The focus of the IT policy 2010-15 is on start up companies, IT products, SMEs and women entrepreneurs. Promoting women’s participation in the ICT sector is also its objective. More e-governance projects in local languages are also on its agenda.

At present there are 1,200-odd IT and IT-enabled Service (ITeS) companies. Out of these, 70-75 percent belongs to the SME category earning annual revenues not exceeding Rs 100 crores. A company is considered a start up if its annual return is between 50 lakh and 10 crore, with 50 employees and operating for less than five years.

The government has made provisions to grant incentives in the form of 25 per cent power subsidy to start-up companies, 25 percent reimbursement for premises rental expenses and recruitment assistance of 2.5 lakh per 50 persons recruited.

L Suresh, president IT and IT-enabled Service Industry Association of Andhra Pradesh (ITsAP) says, “Usually, SMEs are good at executing projects. But because of their size, they are disqualified from participating in large projects. Earmarking about 10 per cent of e-governance tenders for SMEs will ensure that companies will have a level playing field.”

To market intelligence, prepare research reports & analysis for SMEs, understand new trends in technology, the Andhra Pradesh government will create libraries with support from NASSCOM, IT Exporters Association, Software Technology Parks of India, ITsAP and Institute of Electronic Governance. For the libraries, Rs 10 lakh fund will be facilitated so that the SME sector can grow. In order to evaluate the strengths of SMEs, the government shall tie up with business analyst firms. This will enable smaller ICTs to establish linkages with bigger firms and help SMEs to find international markets.

Andhra Pradesh has set a target to raise its export value to Rs 70,000 crore by 2015. The current value is 32,000 crore. The state provided 2.51 lakh employment in 2009. New employment for 125,000 people is being targeted. IT sector’s export is 50 percent of the total exports from other sectors in the state.

Tags: e-governance, ITsAP, NASSCOM, SMEs, stake holders, start up companies, state governments, Union ministry, women entrepreneurs
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The Sensex gained 446.8 points or 4.5 percent touching a new high for 2009 on Thursday, April 02. Investors were buying stocks encouraged by global markets gaining strength.

The Nifty index closed at a six-month high of 3,211.05 on the same day.

Tags: Nifty, Sensex
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Small and medium enterprises in various sectors are moving towards a new model of information technology to gain a competitive edge in the market.

Deploying software-as-a-service (SaaS), software hosted over the Internet and leased out as a subscription, avoids the upfront costs of on-premise software and server infrastructure needed to host the solutions. Minimizing operational and capital expenditure, SaaS gives business owners the flexibility to scale up the business while scaling down the investment.

Tags: small and medium enterprises, software-as-a-service (SaaS)
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