Here is a statement that can be cut in stone: “SMEs are the backbone of any industry.” Perhaps, Ganesh Kumar Murugan has a plaque to that effect on his table, I wonder, as we meet over lunch on March 6.
Murugan is passionate about SMEs (small and medium enterprises); and, as Vice-President, Customer Services, Operations and Technology, Rising Solutions, Chennai ( www.risingsolutions.com), he has a team d eveloping software for some of the ‘hardest’ SME customers — in the stone industry.
Rising is an example of the thousands of SMEs in the IT (information technology) sector, providing both global and domestic solutions to customers. Since the revenues are very low from Indian customers, these enterprises face a big challenge in managing their costs, rues Ganesh. “If the Government can take steps in improving and supporting the mid-market players it will be of great help to provide more affordable solutions to customers.”
While any possibility of such sops remains tentative, what is, however, certain, like taxes, is death, which to the stone industry translates as demand for monuments. “An industry unaffected by recession or slowdown,” sombrely observes Ganesh. And we keep our conversation alive over e-mail.
Excerpts from the interview.
As an IT (information technology) product company, how do you see the global economic crisis impacting your operations?
We do see an impact in terms of deferring delivery commitments of our solutions at the customer-end.
On the other hand, we also see this as an opportunity to learn and build, in functional areas such as optimal customer delivery, just-in-time recruitment, and process endurance at shorter delivery cycles.
As a product company, we see in the current phase scope for stability in building our internal processes that will add value to customers and our products.
Towards that end, we are working closely with our customers in terms of prioritising their requirements and delivery cycles by reducing overheads.
Can you walk us through the reasons why you chose stone industry as a niche area for developing IT solutions? What are the industry trends that make the market attractive?
Stone industry is a prestigious industry with a sales turnover of Rs 15,000 crore and with an export growth rate of 20 per cent every year.It employs around 1.5 million people across India, with a concentration in Tamil Nadu, Andhra Pradesh, Karnataka and Rajasthan.
Despite being the second-largest exporter in India, this industry doesn’t have an enterprise software solution that can meet its end-to-end requirements. With unique process areas, this industry poses a big challenge to the leading software products for customisation.
Stone industry encompasses granites, marbles, limestone and natural stones. The scope of IT work spans from managing their back-office data to the management decision-making process for the senior management.
Today these industries operate with disparate and legacy applications to manage their back-office data; these solutions cannot meet the scalability of the business that this industry looks at. We, therefore, developed Kubix as an integrated enterprise solution for the stone industry to manage the back-office applications, and also provide intelligence and data to the management for taking quicker decisions.
Do you see a ‘long tail’ in terms of market potential for more such areas, where bigger IT players have not focused?
We are getting traces of requirements from verticals that exhibit similar needs and demand that the stone industry exhibited.The advantage for a smaller IT company, compared to the bigger IT players, is the experience in meeting and managing customer expectations and commitments at micro level that keep changing continuously.
What are the challenges in SMEs, as IT customers?
Some key challenges when working with SMEs are:
- Competition from the big IT players who also want to play in the SME market.
- Awareness and exposure of end-users who use IT at the enterprise level.
- Brand awareness and brand identity for acquiring the best skills and competencies in the market.
- Price vs cost, that is, while the price of the products being sold out of SMEs is competitive in the Indian market, the cost is always higher compared to that of the IT majors.
The major differences, however, are in the awareness and also the exposure of end-users to processes and procedures. This becomes a challenge for IT players when providing solutions to Indian businesses.
But this situation has been changing over time, with the traditional family businesses being taken over by the newer generation that thirsts for the latest technology and solutions for business.
The new age business people see the difference that IT can bring into their operations, so this will be a great breakthrough for IT business in India.
Even the IT leaders have begun understanding this situation, and are therefore offering solutions that will meet the needs of the Indian customer base.
Would you like to comment about improvements needed in our engineering education? Also, about the industry-academia interaction.
Today students get more time to think out of the box, which gives them a bigger platform to innovate.
Educational institutions should take an active part in working on the curriculum to leverage this competency. Application-driven thought processes and innovations should be the core agenda of educational institutions.
The industry should both welcome these thought processes and be an enabler. Big IT companies work with the top engineering institutions and B-schools. Likewise, the SMEs should begin collaborating with the smaller institutions where still lots of skills and resources remain untapped.
How can innovation be fostered in IT product companies?
I think innovation is the core value across the country which will enable us to face the competition that we will run into, post recession.
To meet this challenge every organisation should start focusing on consolidating innovative thoughts together for the growth of the company.
With product development getting expensive, innovation at all levels of an organisation can be a great source of ideas for the management to look at.
For instance, at Rising, we have an ‘innovation forum’ wherein every employee can post his innovation with a plan of implementation.
This gives the management visibility to a broader spectrum of ideas that would have been unexplored in the product development.
dmurali@thehindu.co.in
http://www.thehindubusinessline.com/ew/2009/05/04/stories/2009050450120400.htm
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