Transforming from<br />a Tech SME to an MNE<br />Some Thoughts<br />Raman Roy  <br />Chairman & MD<br />Chandigarh<br />23...
Quatrro Confidential<br />Importance of SMEs cannot be underestimated<br /><ul><li>SME sector is a place where “Growing in...
Successful micro enterprises wind up and
Grow into an SME through survival of the fittest
Help of the SME sector helps to determine the future supply of large MNE firms
These large firms possibly will subcontract with the small firms and
Create additional SMEs</li></ul>“Growing into” & “Growing out of”<br />Model<br />Growing into a SME<br />Growing out of a...
Quatrro Confidential<br />SMEs play a significant role in leading economies of the world<br />China<br />USA<br />India<br...
Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work F...
Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work F...
Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work F...
Knowledge Economy empowers “SME” to operate like an “MNE” <br />In Knowledge Economy scale and multi national operations s...
SMEs need to nurture specific traits that propel them into an MNE<br />
Leverage “inherent strengths” to attract talent locally and internationally<br />Management Team Skills<br />Job Protectio...
Concentration of shares and control management give the SME entrepreneur an advantageous position
The support of responsible shareholders will motivate the management team to develop greater skills
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RR eRevolution 2011 transforming from SME to MNE- Presentation by Mr. Raman Roy

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RR eRevolution 2011 transforming from SME to MNE- Presentation by Mr. Raman Roy

  1. 1. Transforming from<br />a Tech SME to an MNE<br />Some Thoughts<br />Raman Roy <br />Chairman & MD<br />Chandigarh<br />23rd September 2011<br />
  2. 2. Quatrro Confidential<br />Importance of SMEs cannot be underestimated<br /><ul><li>SME sector is a place where “Growing into a SME” and “Growing out of a SME occurs
  3. 3. Successful micro enterprises wind up and
  4. 4. Grow into an SME through survival of the fittest
  5. 5. Help of the SME sector helps to determine the future supply of large MNE firms
  6. 6. These large firms possibly will subcontract with the small firms and
  7. 7. Create additional SMEs</li></ul>“Growing into” & “Growing out of”<br />Model<br />Growing into a SME<br />Growing out of a SME<br />(SOURCE – International Tax Dialogue, SME Conference)<br />
  8. 8. Quatrro Confidential<br />SMEs play a significant role in leading economies of the world<br />China<br />USA<br />India<br />Brazil<br />(SOURCE – Industry Outlook- SMEs in China by Lauren Hilgers)<br />
  9. 9. Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work Force<br />
  10. 10. Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work Force<br />Quatrro Confidential<br />
  11. 11. Knowledge Economy is different from Traditional Economy<br />Differs on three attributes – Markets, Enterprises and Work Force<br />Quatrro Confidential<br />
  12. 12. Knowledge Economy empowers “SME” to operate like an “MNE” <br />In Knowledge Economy scale and multi national operations seemed to be delinked as evident from above example<br />SME can certainly operate like and/or Grow into MNE<br />
  13. 13. SMEs need to nurture specific traits that propel them into an MNE<br />
  14. 14. Leverage “inherent strengths” to attract talent locally and internationally<br />Management Team Skills<br />Job Protection<br />Long Term Horizon<br /><ul><li>Management team skills appear to be better in SMEs
  15. 15. Concentration of shares and control management give the SME entrepreneur an advantageous position
  16. 16. The support of responsible shareholders will motivate the management team to develop greater skills
  17. 17. In SMEs generally there is a powerful recognition that employees constitute competitive advantage
  18. 18. Hence, efforts are made to preserve and nurture them
  19. 19. Has the ability to maintain stable level of employment even during economic crisis
  20. 20. The long term horizon based on the willingness of entrepreneur to pass down the legacy to next generations, provides business stability
  21. 21. Provides a sense of security and assurance that employees will be able to pursue long term professional goals within a stable business framework
  22. 22. CEOs stay is 3 to 5 times longer than CEOs in MNCs..ofcourse there is no risk of CEO being fired through SMS!!</li></ul>Good practices of one region are seldom interpreted as bad anywhere else globally<br />
  23. 23. Stay away from practices that de-motivate talent <br />Nepotism / Gifted Positions<br />Salary and Fringe Benefits<br />Lack of Decision Making Freedom<br /><ul><li>Nepotism especially in a family promoted SME
  24. 24. It is perceived to be more in family businesses on account of blood bonds between different employees
  25. 25. Ensure gifted positions atleast have a wider acceptance if not complete
  26. 26. CEO who is the main shareholder and MD of the firm often set themselves lower salaries
  27. 27. They decide to spend more money in the firm where it will enhance shareholder and firm value
  28. 28. This results in a rub off effect resulting in lower pay level among employees…one needs to be conscious of this.
  29. 29. Unified ownership can lead to performance advantages </li></ul>but<br /><ul><li>Strong dependence on one person results in not delegating decisions to those with greater expertise
  30. 30. Dependence on decision maker seem to wane away when business becomes large
  31. 31. The key is to manage it properly in times when it is required the most</li></ul>Bad practices of one region are often interpreted as bad anywhere else globally<br />
  32. 32. Adapting Good HR Practices Quickly is Essential – A Case Study<br />USA<br />India<br />Circa 1900<br />Circa 1990<br />Circa 1950<br />Circa 1990<br />Innovation in Employee Engagement Practices fueled by new companies<br /><ul><li> Flexi timings
  33. 33. Telecommuting
  34. 34. ESOPs
  35. 35. Free food and several conveniences for employees at office so that distinction between work and personal life is not perceptible</li></ul>Innovation in Employee Engagement Practices fueled by MNCs<br /><ul><li>5 day work week
  36. 36. Flexi timings, Telecommuting
  37. 37. ESOPs
  38. 38. Earn while you learn</li></ul>The companies that didn’t innovate HR practices in US, did them in India as they were competing with established players for talent<br />
  39. 39. It is a fact that majority of SMEs buy from SMEs and needs of SMEs are different from Large Enterprises<br />SMEs buy Total Solutions & from Trusted Channels<br /><ul><li>Viable and Stable solutions
  40. 40. Easily implemented
  41. 41. Require little support as they lack IT skills & resources
  42. 42. Focus on SME IT buying priorities
  43. 43. Don’t provide customized solutions
  44. 44. Easy to deploy integrated solutions
  45. 45. SME’s cant do integration themselves
  46. 46. Easy to understand, deploy, manage and support
  47. 47. SME’s would like to go with trusted long time vendors
  48. 48. Cost of establishing a new vendor is high for a SME
  49. 49. Focus on channels that sell to SME’s
  50. 50. SME’s are focused on business value
  51. 51. E.g. improved productivity, enhanced CRM, enhanced revenue, payback
  52. 52. No technology marketing jargon
  53. 53. Brands are least important factor for SME’s
  54. 54. Big brands connote higher TCO
  55. 55. Young companies can collaborate with large enterprises to jointly market to SME’s
  56. 56. SME’s put lot of emphasis on TCO, not only on price. They will go for lower TCO’s
  57. 57. TCO includes resources required to implement and maintain a solution, customer and technical support, unanticipated upgrade costs to maintain compatibility with new development, up and down scalability, and the cost of managing new vendor relationships.</li></ul>Source : Milestone Group<br />It takes little longer to build right channels but they are most efficient in long term<br />
  58. 58. Networking opportunities are directly proportional to your inclination <br />You will rarely come across entrepreneurs who do not network<br />Networking helps in sharing ideas and obtain insights from others<br />Thoughts when “shared” gets “doubled” and “halved” when concealed<br />Networking in today’s time is not difficult…there are multiple avenues. <br />You just need the inclination. <br />
  59. 59. Quatrro Confidential<br />Market to your own world to build the Brand – Digital Marketing<br />It is a fact that all of you operate in a Digital World<br />The most three most trusted forms of brand building are:<br />  Recommendations from people I know - 90% Consumer opinions posted online - 70% Branded websites - 70%The digital world has made the traditional two-way “Word-of-Mouth”marketing accessible and available to everyone with a computer and or a phone)                                                <br />The key is you need people with megaphones in the digital world to build your brand<br />
  60. 60. Quatrro Confidential<br />There are plenty of avenues to find the people with the megaphone/s <br />Social Media – For Global Reach<br />Mobile Media – For Local / Global Reach<br />Digital Marketing gets you started in global markets with limited budgets without a physical presence in those markets<br />Digital Marketing skill sets can be easily outsourced…they are several SMEs in India supporting International Companies in their Digital Initiatives <br />However , it requires enough patience to acquire and grow audience, see results first and increasing returns subsequently<br />
  61. 61. Thank You<br />Happy to Answer Questions<br />Raman RoyChairman & Managing Director<br />Email: raman.roy@quatrro.com| Website: www.quatrro.com<br />

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