SME’s in IT

Enterprise Risk Services - Technology Risk
For Private circulation amongst delegates of …
November 2013
Importance of IT Sector

2

©2013 Deloitte Touche Tohmatsu India Private Limited
India’s GDP & IT sector
The IT sector grew over this six-year period by a factor of nine, whereas
GDP slightly more than d...
Indian IT industry: Size, growth & investment
• April 2000 - June 2013 – IT sector attracted cumulative foreign direct
inv...
IT Sectoral focus in the SME segment

5

©2013 Deloitte Touche Tohmatsu India Private Limited
Importance of the SME

7

©2013 Deloitte Touche Tohmatsu India Private Limited
Definition of a SME & Reasons for Success
• Micro, small and medium enterprises as per MSME Act, 2006 are
defined based on...
Importance of SME to the economy
• SMEs are vital and of paramount importance in the development of any
country & play a p...
The Future of our Country wants to focus on MSME / SME

The young want to be their own masters

10

Source : Business Stan...
Barriers to Entry or Typical Challenges faced by SME’s
• Availability of Finance - Timely and adequate finance at the agre...
Enablers for the SME’s

12

©2013 Deloitte Touche Tohmatsu India Private Limited
Entrepreneurship
& Innovation

13

©2013 Deloitte Touche Tohmatsu India Private Limited
Historical Trends : Telephony

©2013 Deloitte Touche Tohmatsu India Private Limited
Historical Trends : Electric Bulb

©2013 Deloitte Touche Tohmatsu India Private Limited
Historical Trends : Kinetoscope or Motion Picture Camera

©2013 Deloitte Touche Tohmatsu India Private Limited
Historical Trends : Phonograph

©2013 Deloitte Touche Tohmatsu India Private Limited
Historical Trends : Stock Ticker

©2013 Deloitte Touche Tohmatsu India Private Limited
Promoting an Entrepreneurial and Innovative environment

19

©2013 Deloitte Touche Tohmatsu India Private Limited
Tech Trends Snapshot
Disruptors

Enablers
Social Business
“Social” is not a teenage fad, not a personal
consumer phenomeno...
Leveraging IT

21

©2013 Deloitte Touche Tohmatsu India Private Limited
IT an Enabler for SME’s
Indian SMEs are increasingly adopting technology. Technology is
playing a crucial role in the sust...
Lowering the Barriers

23

©2013 Deloitte Touche Tohmatsu India Private Limited
Enablers for SME’s

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




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Education and Access to Resources
Easy Availability of Finance
Enabling & Facilitatin...
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e-Uttar Pradesh 2013 - Small is Beautiful – IT SMEs, BPOs, IT-ITeS in Uttar Pradesh Parthasarthy, Senior Director, Deloitte Touche Tomatsu

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e-Uttar Pradesh 2013 - Small is Beautiful – IT SMEs, BPOs, IT-ITeS in Uttar Pradesh Parthasarthy, Senior Director, Deloitte Touche Tomatsuv

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  • Finance - According to the Indian government survey, 90% of the total Micro units in India procure funds from friends, lenders and private lenders only.
  • Technology Trends: What’s different this year?Following the general structure of the 2010 research, we are proposing a number of changes to the approach for :Emphasize research & benchmarking for data-driven eminence and market messagingFeature real client examples behind each trend (“bread crumbs at minimum”)Publish in January to better arm media/PRDrive SME’s to own internal education, sales-enablement content creation - ideally ready for Jan launchSolicit industry involvement to tailor sector-specific perspectivesBetter alignment with Center for the Edge, Deloitte Research, SR&I, and Global BenchmarkingSimultaneously develop primary thoughtware, web channel, client-facing presentation, and mobile enablement (ePub format, iPad app)The names of the categories… (still WIP)
  • Finance - According to the Indian government survey, 90% of the total Micro units in India procure funds from friends, lenders and private lenders only.
  • e-Uttar Pradesh 2013 - Small is Beautiful – IT SMEs, BPOs, IT-ITeS in Uttar Pradesh Parthasarthy, Senior Director, Deloitte Touche Tomatsu

    1. 1. SME’s in IT Enterprise Risk Services - Technology Risk For Private circulation amongst delegates of … November 2013
    2. 2. Importance of IT Sector 2 ©2013 Deloitte Touche Tohmatsu India Private Limited
    3. 3. India’s GDP & IT sector The IT sector grew over this six-year period by a factor of nine, whereas GDP slightly more than doubled in the same period. India’s technology and Business Process Management (BPM) sector (including hardware) is estimated to have generated USD108 billion in revenue during FY13 compared to USD100.9 billion in FY12, implying a growth rate of 7.4 per cent . The contribution of the IT sector to India’s GDP rose to approximately 8 per cent in FY13 from 1.2 per cent in FY98 3 ©2013 Deloitte Touche Tohmatsu India Private Limited
    4. 4. Indian IT industry: Size, growth & investment • April 2000 - June 2013 – IT sector attracted cumulative foreign direct investment (FDI) of Rs. 53,757.60 crores (US$ 7.97 billion), (Source :DIPP). • IT spending in India is projected to reach US$ 71.5 billion in 2013, an increase of 7.7 per cent as compared to US$ 66.4 billion projected for 2012, as per a report by Gartner. • The enterprise software market in India is expected to reach US$ 3.92 billion in 2013, registering a growth of 13.9 per cent over 2012 revenue of US$ 3.45 billion, according to Gartner. 4 Source: Nasscom, Aranca Research Note: E - Estimates ©2013 Deloitte Touche Tohmatsu India Private Limited
    5. 5. IT Sectoral focus in the SME segment 5 ©2013 Deloitte Touche Tohmatsu India Private Limited
    6. 6. Importance of the SME 7 ©2013 Deloitte Touche Tohmatsu India Private Limited
    7. 7. Definition of a SME & Reasons for Success • Micro, small and medium enterprises as per MSME Act, 2006 are defined based on their investment in plant and machinery (for manufacturing enterprise) and on equipment for enterprises providing or rendering services. • SMEs are able to make their presence felt mostly because of the simple structure of an they can respond quickly to changing economic conditions and meet local customers’ needs, growing at times into large and powerful corporations 8 ©2013 Deloitte Touche Tohmatsu India Private Limited
    8. 8. Importance of SME to the economy • SMEs are vital and of paramount importance in the development of any country & play a pivotal role and can be considered as a back bone of national economy (Peters and Waterman, 1982; Amini, 2004;Radam et al., 2008). • SMEs in emerging markets rely on more labor-intensive production processes than large enterprises, boosting employment and leading to more equitable income distribution (Luetkenhorst, 2004) • SME’s prevent mass migration from the rural to urban areas thus reducing the clutters and burden on Tier 1 and Tier 2 cities in India. • In India SME’s have made significant contribution to industrial production, export and employment generation • • Almost 50% of India’s total exports • 45% of India’s industrial employment • 9 Approximately 40% of the country’s domestic production 35-40% to the GDP and account for more than 90% of all industrial enterprises in India. ©2013 Deloitte Touche Tohmatsu India Private Limited
    9. 9. The Future of our Country wants to focus on MSME / SME The young want to be their own masters 10 Source : Business Standard & ISEED ©2013 Deloitte Touche Tohmatsu India Private Limited
    10. 10. Barriers to Entry or Typical Challenges faced by SME’s • Availability of Finance - Timely and adequate finance at the agreeable conditions is a tedious and cumbersome exercise for both established as well as budding SMEs. • Access to Markets - The limited budgets constrain the SMEs to create market access through marketing and promotions. • Knowledge of prime technology - is indeed the prime most component in competing in domestic markets as well as the international market • Lack of proper Infrastructure - This includes good means of transport, adequate electricity, proper location of the SME setup. These all factors help in reduce cost of procurement of resources and thus lowering the production cost for the SMEs. • Lack of knowledge of foreign markets - Lack of knowledge of foreign markets, business practices, competitions and lack of management to generate foreign sales • Flexible and Clear Govt. Policies – The policies of the state need to be clearly articulated and followed 11 ©2013 Deloitte Touche Tohmatsu India Private Limited
    11. 11. Enablers for the SME’s 12 ©2013 Deloitte Touche Tohmatsu India Private Limited
    12. 12. Entrepreneurship & Innovation 13 ©2013 Deloitte Touche Tohmatsu India Private Limited
    13. 13. Historical Trends : Telephony ©2013 Deloitte Touche Tohmatsu India Private Limited
    14. 14. Historical Trends : Electric Bulb ©2013 Deloitte Touche Tohmatsu India Private Limited
    15. 15. Historical Trends : Kinetoscope or Motion Picture Camera ©2013 Deloitte Touche Tohmatsu India Private Limited
    16. 16. Historical Trends : Phonograph ©2013 Deloitte Touche Tohmatsu India Private Limited
    17. 17. Historical Trends : Stock Ticker ©2013 Deloitte Touche Tohmatsu India Private Limited
    18. 18. Promoting an Entrepreneurial and Innovative environment 19 ©2013 Deloitte Touche Tohmatsu India Private Limited
    19. 19. Tech Trends Snapshot Disruptors Enablers Social Business “Social” is not a teenage fad, not a personal consumer phenomenon, and not (just) a B2C tool for business. Correctly combined and deployed, social media + social software + social networks equals a new set of tools for reengineering business. Big Data Goes to Work Just as businesses have started to appreciate the potential of information as a strategic asset, they are overwhelmed with big data – big volumes, big velocity, big variety, and big value. Gamification Gamification is at the intersection of three existing capabilities – business simulation and war-gaming, business process automation, and the mechanics of large-scale online gaming. Cyber Intelligence A framework combining cyber-security, cyberforensics, cyber-logistics, and cyber analytics to protect, inspect, and predict penetration, exfiltration, and extortion Enterprise Mobility Unleashed Large enterprises have moved rapidly in adopting the revolutionary potential of mobile apps to both enable and transform the conduct of business. Digital Identities The digital expression of identity is growing more important every day as individual personae continue to blend in the digital world. Enterprise workflow has expanded beyond the classic firewall trust zone. User Empowerment User Experience involves intuitive human-computer interfaces. User Engagement adds to that a design focus from the “use case down” vs. the traditional “data integrity up”. CIOs as Revolutionaries The role of the CIO beyond a “seat at the table” –vanguard and catalyst for the combined impact of information, collaboration, and consumerization Hyper-hybrid Cloud Evidence is clear that the hybrid cloud model will be a dominant approach for large enterprise. As the services catalog grows within the enterprise, there is a need for integration, monitoring and management capabilities - multi-cloud, multi-provider. The End of the “Death of ERP” The lasting importance of true enterprise data management and process automation – represented by “ERP” enterprise apps – will continue to be the foundation on which advanced information, user engagement, and cloud strategies will be built
    20. 20. Leveraging IT 21 ©2013 Deloitte Touche Tohmatsu India Private Limited
    21. 21. IT an Enabler for SME’s Indian SMEs are increasingly adopting technology. Technology is playing a crucial role in the sustainable development • IT contributed to about 32% change in value add and is the second largest contributor to increasing operating profits • New Boston Consulting Group (BCG) research finds that if more SMEs adopted the latest IT tools in India, they could boost revenues by $56 billion and create more than 1.1 million jobs in the country (as on 8 Oct. 2013) • IT-enabled SMEs grew revenues 15 percentage points faster and created twice as many jobs as SMEs that use less technology • BCG estimates SMEs’ revenue could grow by a combined $770 billion in just five primary countries surveyed, if they deployed more IT tools 22 ©2013 Deloitte Touche Tohmatsu India Private Limited
    22. 22. Lowering the Barriers 23 ©2013 Deloitte Touche Tohmatsu India Private Limited
    23. 23. Enablers for SME’s         Education and Access to Resources Easy Availability of Finance Enabling & Facilitating Access to Markets Providing proper & stable Infrastructure Education and knowledge transfer of foreign markets Flexible and Clear Govt. Policies Special Incentives and subsidies for the sector Establishing and encouraging a entrepreneurial environment  Encouraging innovation  Provision of Incubation facilities 24 ©2013 Deloitte Touche Tohmatsu India Private Limited

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