24 Sep 2020, 11:03 — 8 min read
In my previous article in the series on SMEs, we looked at how the adoption of a technology platform such as an ERP (Enterprise Resource Planning) solution can act as a first step towards more efficiency, profitability and growth in this sector. In this article, we look at the adoption of cloud platform by this sector, and the challenges and opportunities therein.
During our research on SME sector, especially in terms of their adoption of technology for business purpose, we found one common but the very interesting thread of misinformation. Most of these SME have a very basic online presence in terms of a static website giving details of their business. We noted a very unique, but surprising pattern, namely, that their website is listed as say, www.xyz.com, but the mail id is defined as firstname.lastname@example.org. This means that even though the company has its own domain as well as have subscribed to a hosting space for their website, still they are not using the mailing on their hosted server.
It is also a matter of concern that most of these hosting servers are unmanaged (and hence unsecured), and most probably hosted somewhere outside the country and anyone with not even a lot of understanding of hacking can potentially damage the sites and cause havoc.
The other gap is in understanding the cloud and related subjects, that we have come across, stems from a near-absolute inclination, by the SME owners, of treating everything, even remotely connected to computer usage, being branded as IT. We have had SME customers asking for consulting on such wide variety of topics as, networks, software licensing issues, financial accounting applications, ERP, project management, training on the business application, website creation, and even social media marketing. For a typical SME customer, all these are real and live issues that they would expect the IT partner to handle and take the onus of.
Whether this means a lack of understanding or treating this issue as a non-priority item on their list is anybody’s guess. We consider the above, as a fundamental lack of awareness as well as a hint of apprehension on handling technology, amongst the SME.
The actual benefit of the cloud is not about implementing IT; it is about reinventing the business itself; it is more about how the same processes can be delivered, more efficiently.
Which brings us to the primary issue, of the IT industry’s oft-repeated claim, of portraying cloud computing as a solution for almost all ills plaguing the SME sector. Traditionally the outsourcing business took off mostly because companies felt that the process (to be outsourced) is too monotonous and mundane to be done in-house. It’s not that the company cannot do this activity in-house; they outsource these services because they feel that this activity is not their core business. By outsourcing this activity, they can concentrate better on the core business.
As an example, think housekeeping or courier services. Now compare these services with the IT outsourcing services that IT industry promotes especially in the SME sector. We feel that the IT vendors need to understand the SME business pain and then suggest the right solutions to them. The vendors have to appreciate the fact the customer is not outsourcing the process because it is monotonous for them, but because they do not understand the nuances of the IT usage within the organisation.
Let us illustrate this with a very simple example of designing, explain and manage the SLA (Service Level Agreement) for a cloud customer. We feel that many times the meaning of SLA is not clearly defined and hence not clearly understood by both parties, including the customer and the vendor. The SME customer expectation when they outsource the IT services (whether cloud or on the premise) are mostly relatively simple to understand and deliver. IT vendors need to improve their understanding and then set customer expectation on this account.
So when the SME customer outsources its process to the IT Vendor, they assume they have passed on all manageability issues to the vendor. It is for the IT partner to understand and appreciate this. Is the SME outsourcing one process, or are they passing the onus of all core as well as related Business Processes to the cloud vendor? The SME customer expectations are different from say, Enterprise customers. SME suffer from a lack of deep understanding of IT and hence need an extra level of hand-holding from the IT partner.
The term “cloud” means a smarter way to handle almost all of the SME’s computing needs. The benefits of cloud computing to customers are very tangible. The actual benefit of the cloud is not about implementing IT; it is about reinventing the business itself; it is more about how the same processes can be delivered, more efficiently. SME’s customers around the world are adopting cloud computing for planning unprecedented growth or introducing innovation, such as entering new lines of business or reshaping an existing process.
With the cloud technology now available, SME can now plan growth more systemically. The most significant factor to the successful deployment of the cloud is choosing a quality technology partner to whom the IT functions of the organisation can be outsourced strategically. It is the IT partner’s duty to take the customer to a 'cloud-ready' level and to simultaneously develop an adoption strategy while keeping the legacy systems in mind.
While, in many cases, the overall benefits have been communicated to the SME owners, they continue to face two primary bottlenecks in cloud adoption – cost and trust. Since many of the cloud solution providers are startups, the credibility of these companies along with the trust of handing them the data is also an active concern, amongst almost all SMEs.
We feel that the SMEs themselves are in various phases of maturity and transition. There are the ones who are in the traditional business of manufacturing or trading, and the others are in services and are comparatively newer in business. The latter category of SMEs are technologically more tech-savvy and are more likely to adopt technology at the start of their venture.
While this holds absolutely true of the newer, tech-savvy businesses, its relevance to the older, more traditional businesses is still a matter of debate, amongst the SME owners.
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Posted bySameer Mathur
SM Consulting (www.smconsulting.in) is a New Delhi based Business and Technology Advisory. We guide our customers on their journey towards adopting Technologies to achieve their...
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