Adoption of modern management practices and IT in SMEs: opportunities for consulting

Abstract

The small and Medium Enterprises in India have an IT track record, which is much better than is ordinarily believed by the press. Their average investment in IT turns out to be 1.25% which is not insignificant, but much less compared to similar figures abroad. Their main reasons to invest are internal, like increasing control and reporting. External factor like competition and customer demand haven`t yet been big enough to have become an important reason for investment in IT. Thus the software used has been largely of the packaged kind (for accounting etc.) and customized applications are not yet the order of the day for organizations of this size. A Significant percentage of the SMEs surveyed (42%) had already hired a consultant at some point for the remaining the two largest obstacles were cost and internal resistance. The importance of internal resistance as an obstacle is further corroborated by the in-depth case study. In spite of this interestingly 4 out of 5 of those surveyed have expressed interest in seeking out external consultants in the future. This point to a significant untapped business opportunity for those with the relevant experience and the right temperament who can put the small entrepreneur at ease while helping him out on his specific problems. It is further noted that this opportunity is in areas like production sales and quality where tangible results can be produced. This opportunity is much smaller in areas like strategy, where the entrepreneur doesn`t see the possibility of tangible results.