TECH TALK: SMEs and Technology: New Technologies and Trends (Part 2)

1. Computers: It may seem very obvious that computers are an important business tool, but in most small- and medium-sized enterprises (SMEs) in emerging markets, the penetration of PCs is no more than 10-20%. This is because of the investment needed for a PC. The result: a device as fundamental as a computer is being used by very few SMEs for real productivity applications. What is needed is for the cost of computers to come down so that there can be a computer for every employee only then will SMEs begin to rethink their business processes and achieve major leaps in productivity. Two ideas to bring down total cost of ownership are: server-centric computing (all processing and storage happens on the server, which can be a high-end desktop for smaller businesses), and low-cost, low-configuration thin clients for users (which also simplifies management). Either way, having a computer on every desk is the first step that an enterprise needs to take to begin benefiting from technology.

2. Internet: Connectivity to the Internet is another fundamental building block for the SME. The Internet is not just an information resource, but can be a powerful marketing tool. Every individual in the company must have Internet access. Being able to visit websites of potential customers, partners and competitors bridges the information divide. Getting access to industry directories and niche publications helps make people abreast of all the new developments. Search engines can be good, cost-effective marketing platforms. In other words, the Internet with the computer creates connected employees not just to each other, but to the outside world.

3. Open-Source Software: Software is the engine that drives the computers and makes them useful. For long, software had just three difficult options: paying a lot of money for the applications (since most pricing is dollar-denominated), piracy or non-consumption. Now, open-source software now creates a fourth option: affordable solutions. Open-source software is a godsend for SMEs, especially those in emerging markets. For almost every component in the stack of applications that businesses need right from desktop productivity applications and messaging servers to accounting and CRM applications, there are equivalent open-source applications which are more than good enough for business use.

4. Broadband: High-speed connectivity to the Internet and across an enterprises offices is very critical for business. It takes away some of the friction of doing business. Broadband is the solution to the connectivity woes that bedevil most SMEs in emerging enterprises. Bandwidth in India is about 50 times more expensive than the US. Poor connectivity hinders the use of new technologies for effective business. Countries need to learn from South Korea, where a government initiative has seen affordable, broadband connectivity made available to small businesses, along with specialised, hosted applications relevant for different verticals.

Tomorrow: New Technologies and Trends (continued)

TECH TALK SMEs and Technology+T

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.