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Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
Clextra sme india_it
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Clextra sme india_it

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The myth of the SME, MSME medium and small Industries especially in India.

The myth of the SME, MSME medium and small Industries especially in India.

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  • 1. The SME myth White Paper on IT for SME’s in INDIA Casper Abraham CEO and Founder Edgevalue 62-B Modi Residency, Millers Road, Benson Town Bangalore 560 046 INDIA http://www.edgevalue.com http://www.clextra.in casper@edgevalue.com 91-98450-61870 © SEP 2009
  • 2. Clextra (NOT for India SME’s) Clextra is an Enterprise Intelligence Framework and works for any firm in most industries who want an „honest software framework‟. In India, there are an estimated 12+ million such SME‟s, employing over 31 million persons and accounts for a third of all Manufacturing output and a third of all Services output. It‟s 4 times larger than organized and larger Enterprises. While there may be exceptions – the potential to sell Software, Business Models and Quality Services such as integral to Clextra will NOT work for the SME segment in India for the following reasons …. SME Background & General Information 1. 2. 3. 4. There are 26 million units in India. Of these 97% are Proprietorship or Partnership firms. They employ a total of 60 million people. They account for 40% of industrial production. (Of the GDP 56.8% is Services; Agriculture is 23.5% while Industry is 19.7%). GDP is about US $ 1.3 trillion in the year 2009. 5. They account for 45% of the exports from India. Why NO to ICT for SME’s 1. Any and all of the above consumption figures are for hardware, nuts and bolts and commodity products. 2. Usually there is only one decision-maker – older person – not willing to change – not too familiar with IT, Technology and more up-to-date methods. Let‟s call him THE PERSON. 3. Traditionally Indians will not pay for information; intellectual property; talented people and their time. (read services) – its God given; its free – the seller should not be giving it for money in the 1st place. 4. Even if valued – THE PERSON – can get a free or CD-value only copy of the Software or Service from his friendly neighborhood paan-wala. He‟s not going to pay you anything – leave alone valuable top-dollars! 5. The typical Indian SME is family run – mostly by 1st generation Entrepreneurs. THE PERSON has built the person; the patriarch; the money-bags; the Lord of all he surveys; the King of his domain. 6. Mostly THE PERSON does not have a second line – or their next in line is(are) making more money having studied or engaged with other non-SME forms of Business. 7. THE PERSON is not formally educated in Systems, Management and Methods to grow a business.
  • 3. 8. THE PERSON has put in 16-hour days 6 (even 7-day) weeks for years and decades – he does NOT want his off-spring „to suffer‟ the same way. 9. THE PERSON has made better profit than otherwise by avoiding tax, duties and other statutory payments over the years. Any transparency to new ways of doing things is seen as a threat to this evasion and rotating of owed-funds for whatever purposes. 10.When it comes to labour and Staffing THE PERSON pays minimum wage – and has gathered a whole lot of „yes-men‟. Can‟t do their own jobs let alone adapt to a new and changing Trans-national Information Economy. (“If You pay peanuts you get monkeys”). 11.THE PERSON finds his „off-spring‟ not up to the mark – not worth spending time, money, effort, resources on anything – including his or he proposal for „expensive‟ computers, servers, networking, clients, systems and applications software, staffing, communications etc. NO. We have got here without all that. 12.When it comes to CASH the SME will be under capitalized. It will be locked into a bank „Stocks and Receivables‟ owing the banks lakhs of rupees and barely meeting interest costs – leave alone rotating the credit effectively. 13.Inventory LOCK. If analysed the SME will have obsolete or overvalued „non-usable‟ stock that can never provide the planned or theoretical annual inventory turns. 14.Written off stock; bad-debt and other related „history‟ is never removed from the physical nor virtual … this occupies a good deal of everyone‟s time. 15.Nor has THE PERSON worked in any kind of formal, Corporate – Private or Public Enterprise. No one can relate to this person in any meaningful business way. 16.THE PERSON has evolved unique systems over time which has WORKED well for them through GOOD and BAD times. THE PERSON will not and should not be changing these anyway. 17.THE PERSON is not too keen to grow and take on more risk. Even if they want to – THE PERSON is not be able to get money, market, methods nor machines for it. 18.The SME has to anything and everything A WAY. A process or method that is i. Defined by the Government Authority; ii. A global best practice; iii. Best for that localized industry Association OR iv. Software Vendor who has taken the LCM-HCF of having done this in other places. If it‟s a pre-requisite it‟s called BPR (Business Process Re-engineering. Before A WAY can be adopted THE PERSON (and his team) will have to change THEIR WAY to A WAY. (Don‟t even go there … you want to CHANGE THE PERSON, THE FIRM and THE WAY things are done? Not in India – only God can do this. 19.THE PERSON believes what must be will be. You can‟t plan; do things, make things happen unless they are destined to be. THE PERSON will never ever make an ACTIVE decision that can change things. Change – in his opinion – is not in his hands. 20.Clextra has been designed ground-up for trust and transparency. You want to run your business properly. You want to pay taxes. You want to look after your staff. You core-business is to make honest-
  • 4. money. Name one SME that wall implement this – though THE PERSON is God-fearing and visits the temple every week. 21.Typically under domestic pressure THE PERSON may have invested earlier, earned personal money on a DIVERSIFCATION for his son/daughter/nephew. Mostly would have failed re-enforcing THE PERSON‟s conservative thinking. 22.THE PERSON – if he really thinks about it – knows that he can do everything himself except delivery. Execution requires a team to perform and teams need to collaborate and work together to achieve more effective delivery – this requires a Information Communications and Technology framework such as Clextra. 23.SME‟s is all about manufacturing. Execution and Delivery is about teams making things that a customer wants. Teams means collaborative functioning and the information tools to make them productive, efficient and cost-effective. Clextra is best in class for this … but name one SME who GENUINELY believes, invests in and wants its people to succeed? 24.There is NO standardization of any process across an Industry or group of firms. 25.Because of Statutory Reporting pressure – primarily tax controls and end-of-year filing … the ONLY successful product in India has been Tally. Any other will fail to succeed until standardization across processes is achieved. 26.Value for money – one of the best value for money solutions .. Clextra costs between Rs. 6,00,000/- and Rs. 60,00,000/- one time for Software ALONE OR better Rs. 100,000/- per month (including Hardware, Servers, OS + Applications, Uptime commitments, Software, Business Models + Service Support. 27.Affordability – Consultants, Intermediaries and Channel Partners adding their price to this makes it COMPLETELY unaffordable to any of 30,000,000 million SME‟s in India. This may seem a pessimistic opinion – however it‟s feet on the ground reality of the Indian Market. It‟s like the Taiwan Slipper Manufacturer who wanted to enter India – his slippers cost 50% of the market price and would last 2 times that available in India. He could sell billions of pairs; achieve market share and un-imaginable profits. EXCEPT – that in warm; soft-paddy-field India … millions won‟t wear slippers even if they could afford it. They say - like people - there are 3 kinds of firms … 1. Firms that make things happen. 2. Firms that know what is happening. 3. Firms that wonder what‟s happening. SME‟s in India are for the most part in Class 3 of the above category. Read – poor understanding and inability to harness automation and technology related to „information‟. IT – Software and Services are making the same mistake spending time on ONE huge basket-case. SME is not a target for Clextra.
  • 5. What an SME really wants 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Unique Product Advantages Product Quality Product Functions Quality/Price Relation Design Human Resource Management Technological Knowledge Marketing Knowledge Customer Orientation Training and Development Marketing Activities Testing Prototype Provision of Additional Services Strength of Distribution Channels Advertising and Promotion Sales Department Project Definition Specification of Target Group Positioning Product Product Functions Technical Product Specifications Market Size Growth Potential Product-Company Fit Relation with Current Assortment Relation with Current Clients Relation with Current Technological Knowledge Pre-Development Determination Client Wishes and Demands Competition Analysis Technical Feasibility Financial Feasibility Technological Activities Assembling Technological Knowledge Development Prototype Internal Testing Prototype Organization Production Process Competition Degree Novelty of the New Product Possibility for Patents Entrepreneur Commitment and Determination Persistence in Problem Solving Creativity Team Spirit and Motivational Capacities Project Approach Strength of Project Leader Planning and Organization Progress Checking Multidisciplinary Composition of Project Team Innovation Culture Opportunity to Air Innovative Opinions Space to Elaborate Innovative Ideas Support for Innovative Ideas Financial Means Internal Disposability External Disposability Collaboration With Other Companies With Knowledge Centers Involvement of Consultants
  • 6. Why Clextra is still the best in class for India SME’s (if THE PERSON – perhaps through his industry association - is genuinely interested) … 1. Clextra was ground-up designed for the Internet, secure browser access and one single interface ease of use. 2. Clextra was designed ground-up for SaaS; many, multiple instances can co-exist with least compromise and interference. An association or industry initiative will achieve far better results than „each crab trying to pull the other down‟. 3. Clextra was designed ground up for efuntioning. Printing is OPTIONAL even for statutory printing and output. 4. Clextra was designed up for Integrated working. ie. All horizontals such as Human Resources, Finance, Suppliers, Customers, Manufacturing, Quality Control, Documentation Management, GUI‟s interact with each constantly rather than MOST software which started initially either as an ERP or SCM or CRM or Financial Accounting or HRMS and then added other features (Which are never that good nor integrated nor strong). 5. Clextra works with any vertical; from Aerospace, Automotive to Agriculture Seed to Services. 6. Clextra can drill-down from Strategic top down initiatives to bottom-up operational automated data acquisition to tactical decision making based on analytics. 7. Clextra support any country, any state and city configuration for statutory tax and labour requirements. 8. Each document is individually numbered and the tax components separated for administration and management. Therefore the only software product that offers retrospective administration and change of taxes. 9. Clextra allows custom-designed and configurable Chart of Accounts. Where reuired a separate Management chart of Accounts and Financial Chart of accounts can be maintained. 10.Clextra designed for GENUINE management of your business – besides meeting the paperwork and transparency requirements to meet State Control objectives. 11.Only software product to have individual or team cash-flow management options. 12.Clextra is genuinely OPEN. (not the software, the data). You can import YOUR data anytime, anything IN and OUT of Clextra to spreadsheet or comma separated value files. 13.All standard Management Accounting tools available; including Cashflow Management; Costing; Activity Based Costing; Project Budgeting and Management; Sales Forecasting; Bill of Materials Management for discrete Manufacturing; Process Manufacturing; Services Delivery; Workflow administration; Decision Quality Checklists. 14.Value for money – one of the best value for money solutions .. Clextra costs between Rs. 6,00,000/- and Rs. 60,00,000/- one time for Software ALONE OR better Rs. 100,000/- per month (including Hardware, Servers, OS+Applications, Software, Business Models + Service Support.
  • 7. 15.SAP or Oracle or Microsoft or Open Source ERP‟s are all quality viable solutions and options but THE PERSON dependency on MNC‟s; IT Staff; Skilled Domain Expertise is high. ROI (Return on Investment) is much longer and TCO (Total Cost of Ownership) can be 6 to 100 times higher. Contrary to this the optimism is in the always on Internet and mobile penetration of India. Urban and Rural populace are now inter-twined with Demand and Supply of almost anything merging with pressure on prices affecting all the „politicians‟, „babus‟, „middlemen‟ and „intermediaries‟. Clextra is the New Marketplace; Mardi Gras; Shandy of Ideas; Soft and Hard produce exchange; information as a perishable commodity and those in pain will pay for a cure – if they can find it. A „hardware‟ + „software‟ + „business models‟ + „process method‟ + „Support Services‟ such as Clextra gives you the best possible chance for your Business to be more successful IF dependent on ICT.
  • 8. Contact Information : Casper Abraham casper@edgevalue.com Cellphone : 91-98450 61870 Edgevalue 62-B Modi Residency, Millers Road, Benson Town Bangalore 560 046 INDIA Corporate webiste : http://www.edgevalue.com Product website : http://clextra.com Online demo : http://clextra.edgevalue.com

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