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Page 1: Transforming IT-SME in downturn

4040thth session -Transforming session -Transforming SME –IT companies in the SME –IT companies in the

down turndown turn

Page 2: Transforming IT-SME in downturn

Transforming SME –IT Transforming SME –IT companies in the down companies in the down

turnturn

Prof S DubeyProf S Dubey

From Caterpillar to Butterfly From Caterpillar to Butterfly

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Good News : Good News : Every IT giant was once an Every IT giant was once an SMESME

• Google, HP and Apple were started in the garage of the Google, HP and Apple were started in the garage of the founders.founders.

• Infosys was started in a Flat in Bombay with a capital of Infosys was started in a Flat in Bombay with a capital of Rs.10,000 borrowed from the founder’s wife.Rs.10,000 borrowed from the founder’s wife.

• Wipro started as a small vegetable oil company. In fact Wipro started as a small vegetable oil company. In fact Wipro stands for Western Indian Vegetable Products Ltd.Wipro stands for Western Indian Vegetable Products Ltd.

• Adobe was started by ex-employees of Xerox and named it Adobe was started by ex-employees of Xerox and named it

after a river that ran by their neighborhood.after a river that ran by their neighborhood.

• YouTube was founded by 3 ex-employees of Paypal, who YouTube was founded by 3 ex-employees of Paypal, who had nothing but a creative idea to begin with.had nothing but a creative idea to begin with.

• EBay started as a small venture by Pierre Omidyar and its EBay started as a small venture by Pierre Omidyar and its first sale on the internet was a broken laser pointer. first sale on the internet was a broken laser pointer.

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What made the above What made the above organizations so successful?organizations so successful?• The concept of an efficient search engine was pioneered by Google, The concept of an efficient search engine was pioneered by Google,

which made it a leader in that segment.which made it a leader in that segment.

• The idea and concept of the Macintosh made Apple a dominant player in The idea and concept of the Macintosh made Apple a dominant player in the software as well as the electronics market.the software as well as the electronics market.

• In 1977, India’s socialist government made IBM leave the country. Azim In 1977, India’s socialist government made IBM leave the country. Azim Premji saw this opportunity and made the first Indian made computer Premji saw this opportunity and made the first Indian made computer and hence began Wipro.and hence began Wipro.

Most of these organizations, which began as an SME and emerged into a Most of these organizations, which began as an SME and emerged into a mammoth organization had just one creative/innovation, on which the mammoth organization had just one creative/innovation, on which the empire was built on. empire was built on.

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Challenges for an SMEChallenges for an SME

•Limited opportunities for Economies of scaleLimited opportunities for Economies of scale

• Increased development cost, low profitsIncreased development cost, low profits

•Losing customers, repeat orderLosing customers, repeat order

•Higher cost of marketing Higher cost of marketing

These challenges can even get worse during a down turn or a crisis.These challenges can even get worse during a down turn or a crisis.

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In bad times Test these fourIn bad times Test these four

• Patience Patience

• PersistencePersistence

• PalsPals• PartnersPartners

Dheeraj Dharm Mitra aru nari , aafat kal Parakhiya Dheeraj Dharm Mitra aru nari , aafat kal Parakhiya Chari ___________________________…. Goswami Chari ___________________________…. Goswami TulsidasTulsidas

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Some things that should Some things that should never be done during the never be done during the downturndownturn•Don’t panicDon’t panic

•Don’t let your client/employees/investor panicDon’t let your client/employees/investor panic

•Don’t Believe every thing what you readDon’t Believe every thing what you read

•Don’t Brush aside every thing what you hearDon’t Brush aside every thing what you hear

•Don’t isolate yourself. A team is more successful than an Don’t isolate yourself. A team is more successful than an individualindividual

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A few things that must be A few things that must be done:done:

•Sustain a day at time, follow the ICU model… (later in Sustain a day at time, follow the ICU model… (later in the presentation)the presentation)

•Socialize, serve others and don’t hesitate to collaborateSocialize, serve others and don’t hesitate to collaborate

•Sign up at the first signal of ecosystem changeSign up at the first signal of ecosystem change

•Be observant and be quick to notice the changes Be observant and be quick to notice the changes around you to adapt effectivelyaround you to adapt effectively

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Managing the SME business Managing the SME business like managing an Intensive like managing an Intensive care unit*care unit*

• The survival at any cost and rate is mandated by keeping the vital The survival at any cost and rate is mandated by keeping the vital organs functioning. organs functioning.

• The vital organs refers to the key resources, the revenue The vital organs refers to the key resources, the revenue assurance departments and the stakeholders of the SME.assurance departments and the stakeholders of the SME.

• The policies of the SME is its heart and soul, which will determine The policies of the SME is its heart and soul, which will determine its organizational structure.its organizational structure.

* Refer Innovation with IT from McGraw Hill education

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HLB model HLB model

Brain = Creativity

Heart = Enthusiasm

Lungs =Cash flow

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Innovating the Business Innovating the Business Model by SME ITModel by SME IT

• Tapping revenue from challenging current labor based model to asset and Tapping revenue from challenging current labor based model to asset and annuity based models and creating an Industry eco system. annuity based models and creating an Industry eco system.

• SME’s to try for partnership with already established IT leaders in order to gain SME’s to try for partnership with already established IT leaders in order to gain visibility, expand business and develop relationships.visibility, expand business and develop relationships.

• SME’s to work on specializing on a particular domain. Once a domain expertise SME’s to work on specializing on a particular domain. Once a domain expertise is achieved, approach bigger organizations for partnerships.is achieved, approach bigger organizations for partnerships.

• TCS does passport processing and HCL Driving License preparation at RTO…. TCS does passport processing and HCL Driving License preparation at RTO…. You have to find something similarYou have to find something similar

• Look for security, Mobile space, Nuclear energy, Defense Infrastructure, Social Look for security, Mobile space, Nuclear energy, Defense Infrastructure, Social Service… Challenge traditional Industry Service… Challenge traditional Industry

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Collaboration with Collaboration with innovationinnovation

Many SMEs collaborated

Big competitor

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Advantages of CollaborationAdvantages of Collaboration Many successful ventures have venture partners. SMEs must partner with Many successful ventures have venture partners. SMEs must partner with

other SMEs to tackle bigger competitorsother SMEs to tackle bigger competitors

•Shared Capital and Lesser expenditure on marketing/sales Shared Capital and Lesser expenditure on marketing/sales

•Higher visibility as a bigger unit , you can be More competitive than beforeHigher visibility as a bigger unit , you can be More competitive than before

•Combined expertise of all the SMEs integrated into one entity into, Amul Combined expertise of all the SMEs integrated into one entity into, Amul experiment or Khadi Gamodyog or Lijjat Papad example. experiment or Khadi Gamodyog or Lijjat Papad example.

•Best practices of all the SMEs in one entity, Best practices of all the SMEs in one entity,

•Follow a Collaboration model that makes the SMEs ready to adapt changes : Follow a Collaboration model that makes the SMEs ready to adapt changes : if Jet and Kingfisher , Daimler Chrysler , Centurian amd Bank of Punjab, can if Jet and Kingfisher , Daimler Chrysler , Centurian amd Bank of Punjab, can do it why not you, do it why not you,

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Corporate disciplineCorporate discipline

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Time to practice Five S (5S)Time to practice Five S (5S)

• Sort: Separate what is needed from unneeded

• Straighten: Neatly arrange for everything

• Shine: Clean and wash make it shine.

• Standardize: Establish schedules and methods

• Sustain: Create discipline to perform the first four S

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Corporate disciplineCorporate discipline

• Manage time, especially your time as CEO more effectively, delegateManage time, especially your time as CEO more effectively, delegate

• The policies of the SME must be designed in an employee friendly as The policies of the SME must be designed in an employee friendly as well as a budgeted mannerwell as a budgeted manner

• One of the biggest expenses in any organization is the telecom One of the biggest expenses in any organization is the telecom expense. This can be resolved by setting of a telephone password expense. This can be resolved by setting of a telephone password specific to employees, who can account for business/ personal calls specific to employees, who can account for business/ personal calls made with their personal password.made with their personal password.

• Control cost of Energy Control cost of Energy

• Regulated expense reimbursement of employees in order to curb Regulated expense reimbursement of employees in order to curb unnecessary spending.unnecessary spending.

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Flawless ExecutionFlawless ExecutionAbhinav Bindra, Olympic gold medalist in action

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Flawless ExecutionFlawless Execution

• Why do we all like home food? It is an example of Flawless execution Why do we all like home food? It is an example of Flawless execution and customized to individual needs . and customized to individual needs .

• An SME must design its organizational processes with a view on the An SME must design its organizational processes with a view on the end result. The future business relation with the client is based on the end result. The future business relation with the client is based on the SME’s ability to deliver. You don’t get second chance as you can not SME’s ability to deliver. You don’t get second chance as you can not hide under the brand equity hide under the brand equity

• The client saves a lot by getting his work done by an SME than by a The client saves a lot by getting his work done by an SME than by a big players, all it demands is flawless execution, responsiveness and big players, all it demands is flawless execution, responsiveness and customizationcustomization

• However, Please do choose your customer carefully, avoid those However, Please do choose your customer carefully, avoid those who don’ t pay (in time) .who don’ t pay (in time) .

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Finally Finally

• Find a mentor who can help you with the Find a mentor who can help you with the tough times, and all times.tough times, and all times.

• Regularly bounce ideas , whether you Regularly bounce ideas , whether you are on the right path.are on the right path.

• Guru Gobind Dono Khare kako Lagu Guru Gobind Dono Khare kako Lagu PaunPaunBalihari Guru aapno jo Gobind diyo batyeBalihari Guru aapno jo Gobind diyo batye

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Thank You for Listening

[email protected]

9810506355

Some of these thoughts are elaborated in the forthcoming book by Sanjiva titled Innovation with IT from Mc Grawhill Education


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