40 th session -Transforming SME –IT companies in the down turn

Transforming SME –IT companies in the down turn Prof S Dubey From Caterpillar to Butterfly

Good News : Every IT giant was once an SME Google, HP and Apple were started in the garage of the founders. Infosys was started in a Flat in Bombay with a capital of Rs.10,000 borrowed from the founder’s wife. Wipro started as a small vegetable oil company. In fact Wipro stands for Western Indian Vegetable Products Ltd. Adobe was started by ex-employees of Xerox and named it after a river that ran by their neighborhood. YouTube was founded by 3 ex-employees of Paypal, who had nothing but a creative idea to begin with. EBay started as a small venture by Pierre Omidyar and its first sale on the internet was a broken laser pointer.

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

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

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

Adobe was started by ex-employees of Xerox and named it after a river that ran by their neighborhood.

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

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

What made the above organizations so successful? The concept of an efficient search engine was pioneered by Google, which made it a leader in that segment. The idea and concept of the Macintosh made Apple a dominant player in the software as well as the electronics market. In 1977, India’s socialist government made IBM leave the country. Azim Premji saw this opportunity and made the first Indian made computer and hence began Wipro. Most of these organizations, which began as an SME and emerged into a mammoth organization had just one creative/innovation, on which the empire was built on.

The concept of an efficient search engine was pioneered by Google, which made it a leader in that segment.

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

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

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

Challenges for an SME Limited opportunities for Economies of scale Increased development cost, low profits Losing customers, repeat order Higher cost of marketing These challenges can even get worse during a down turn or a crisis.

Limited opportunities for Economies of scale

Increased development cost, low profits

Losing customers, repeat order

Higher cost of marketing

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

In bad times Test these four Patience Persistence Pals Partners Dheeraj Dharm Mitra aru nari , aafat kal Parakhiya Chari ___________________________…. Goswami Tulsidas

Patience

Persistence

Pals

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

Some things that should never be done during the downturn Don’t panic Don’t let your client/employees/investor panic Don’t Believe every thing what you read Don’t Brush aside every thing what you hear Don’t isolate yourself. A team is more successful than an individual

Don’t panic

Don’t let your client/employees/investor panic

Don’t Believe every thing what you read

Don’t Brush aside every thing what you hear

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

A few things that must be done: Sustain a day at time, follow the ICU model… (later in the presentation) Socialize, serve others and don’t hesitate to collaborate Sign up at the first signal of ecosystem change Be observant and be quick to notice the changes around you to adapt effectively

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

Socialize, serve others and don’t hesitate to collaborate

Sign up at the first signal of ecosystem change

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

Managing the SME business like managing an Intensive care unit* The survival at any cost and rate is mandated by keeping the vital organs functioning. The vital organs refers to the key resources, the revenue assurance departments and the stakeholders of the SME. The policies of the SME is its heart and soul, which will determine its organizational structure. * Refer Innovation with IT from McGraw Hill education

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

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

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

HLB model Brain = Creativity Heart = Enthusiasm Lungs = Cash flow

Innovating the Business Model by SME IT Tapping revenue from challenging current labor based model to asset and annuity based models and creating an Industry eco system. SME’s to try for partnership with already established IT leaders in order to gain visibility, expand business and develop relationships. SME’s to work on specializing on a particular domain. Once a domain expertise is achieved, approach bigger organizations for partnerships. TCS does passport processing and HCL Driving License preparation at RTO…. You have to find something similar Look for security, Mobile space, Nuclear energy, Defense Infrastructure, Social Service… Challenge traditional Industry

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

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

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

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

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

Collaboration with innovation Many SMEs collaborated Big competitor

Advantages of Collaboration Many successful ventures have venture partners. SMEs must partner with other SMEs to tackle bigger competitors Shared Capital and Lesser expenditure on marketing/sales Higher visibility as a bigger unit , you can be More competitive than before Combined expertise of all the SMEs integrated into one entity into, Amul experiment or Khadi Gamodyog or Lijjat Papad example. Best practices of all the SMEs in one entity, Follow a Collaboration model that makes the SMEs ready to adapt changes : if Jet and Kingfisher , Daimler Chrysler , Centurian amd Bank of Punjab, can do it why not you,

Many successful ventures have venture partners. SMEs must partner with other SMEs to tackle bigger competitors

Shared Capital and Lesser expenditure on marketing/sales

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

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

Best practices of all the SMEs in one entity,

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

Corporate discipline

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

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

Corporate discipline Manage time, especially your time as CEO more effectively, delegate The policies of the SME must be designed in an employee friendly as well as a budgeted manner One of the biggest expenses in any organization is the telecom expense. This can be resolved by setting of a telephone password specific to employees, who can account for business/ personal calls made with their personal password. Control cost of Energy Regulated expense reimbursement of employees in order to curb unnecessary spending.

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

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

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

Control cost of Energy

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

Flawless Execution Abhinav Bindra, Olympic gold medalist in action

Flawless Execution Why do we all like home food? It is an example of Flawless execution and customized to individual needs . 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 SME’s ability to deliver. You don’t get second chance as you can not hide under the brand equity 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 customization However, Please do choose your customer carefully, avoid those who don’ t pay (in time) .

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

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 SME’s ability to deliver. You don’t get second chance as you can not hide under the brand equity

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 customization

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

Finally Find a mentor who can help you with the tough times, and all times. Regularly bounce ideas , whether you are on the right path. Guru Gobind Dono Khare kako Lagu Paun Balihari Guru aapno jo Gobind diyo batye

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

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

Guru Gobind Dono Khare kako Lagu Paun Balihari Guru aapno jo Gobind diyo batye

Thank You for Listening [email_address] 9810506355 Some of these thoughts are elaborated in the forthcoming book by Sanjiva titled Innovation with IT from Mc Grawhill Education