Working with SMEs -Joys and Sorrows of it!

An enterprise or business that is small by its number of employees or turnover comes under the category of SME/ SMB/ MSME/ SOHO. 

SME stands for Small and Medium Enterprises,

SMB stands for Small and Medium Businesses,

MSME Stands for Micro, Small and Medium Enterprises

SOHO stands for Small Office/ Home Office

The basic criterion is the number of employees, which is small and varies in different countries, but this sector of enterprises makes major volume of businesses worldwide. In India it contributes approximately 39 percent of manufacturing output and 33% of the total export of the country. This sector is almost 4 times higher than the large enterprises.

Measuring the potentiality and vast opportunities, almost all big IT Companies has started to pay attention on this sector. But most of them are doing it for promoting their IT Product for SMEs, rather then service and customized solution. And here is the big opportunity.

A sale to SME definitely needs altogether a different approach because the very basic driving force for their existence differs from large enterprises. SMEs are generally very focused and limited by activities.

Targeting IT sales to SMEs, one must consider very cautiously; that IT implementation must be very cost effective to boost their business and profitability. Any proposed solution should be easy to implement with less learning curve and without much of cost involvement.  It should be quick implemental with quick result. It should be reliable and scalable to their business. And it should not involve much of recurring cost.

Very few SMEs really care what technology, technological approach, processes and methodology used for the proposed solution. But most of them are concerned about how, at what cost, how early and at what recurring cost, solution would be provided. They are very much concerned about Post Sale Service and Support. They values personalized attention to their business by vendors. A genuine concern and customized approach for better support to SME would win trust of them, which would be main plank for longer business relation with them. Generally SMEs are managed by very small group of closely bind individuals. Most of the time they are family members or closely tied friends. Hence bureaucratic and administrative hassles are less while dealing with SME.

Possibilities of big account are less with SME, but after convincing; getting business from them is almost hassles free and less time consuming. A professional but personalized service and care can prolong the business relation with SMEs. Often it is found that a satisfied SME Client does vendor’s advertisement by ‘Word of Mouth’ and by references.

The low cost solution that often a SME looks for; has a positive side also, and that are, it often keeps large vendor at bay, it paves the way for Open Source World, it creates opportunities for small and mid level vendors, it gives enough learning scopes, it promotes agile methodology, It allows quick returns and it Gives Quick Success.

SMEs are very demanding, quite agile in terms of requirement and delivery. Change request is quite frequent. Re-work chances are quite high.  Pressure for result is very high. Amalgamation of vendor’s sales force and technology force is high. Often vendor’s persons in technology team gets deeply involved with SME operation and that some time causes to get them (Vendor’s person) offer from SMEs to shift loyalty in their (SMEs) side, which causes tactical losses to vendors or vendor some times get forced to renegotiate with it’s own employee. Chances of cash crunch is high for SMEs in comparison to large enterprises, as often SMEs does not have a proper annual budgetary allocations or their budget depend upon their cash flow which is not always very steady, hence; payment from SMEs some times becomes tiresome.

But with all these JOYS and SORROWS working with SMEs would give one a different test of SUCCESS and GLORY.

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   Data Reference: http://msme.gov.in/msme_aboutus.htm