SMEs need to use ICT tools to improve competitiveness

In the current era fuelled by global industrial restructuring, Information and Communication Technology (ICT) plays a crucial role in reshaping Small and Medium Enterprises (SMEs) and their business models to strengthen competitive performance.

In recent years, SMEs have implemented thousands of large and small innovations in software applications, work process, business organization, enterprise resource planning and management, supply chain management, customer relationship management and business intelligence and agility.

Having said that however, one must point out that a large portion of SMEs is still unaware of the application and benefits of integrated IT-enabled tools in their business machinery. The current scenario of ICT adoption in the SME sector is not encouraging and the lack of global competitiveness is partly due to lack of adequate ICT-enabled business processes and management practices in India.

Today, application of ICT is not entirely limited to retailers. Rather, it is used widely in non-production processes such as procurement, product design, business development, and after-sales support, etc., which are otherwise considered as important non-price factors of competitiveness.

All have recognized SMEs as a source of flexibility and acknowledged their significant contribution to the Indian economy, in terms of innovation and the proportion of the labour force employed by these firms. A vibrant and dynamic SME sector of Indian economy, with millions of units providing employment to over 27 million people, contributes to more than half of the total industrial production and more than 34 percent of the national exports.

Today, SMEs in India are adapting themselves with fast market changes that is transiting from a controlled economy to a free market set-up.

Considering the strategic role played by SMEs, it is essential to examine how they can improve their performance in international markets and enhance their export competitiveness. And integrated ICT tools can act as a powerful enabling technology to significantly improve the competitiveness of these Indian SMEs.

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I fully agree with you on the above points. In countries like China, Vietnam and Malaysia, the government of the day is very proactive in building up of the infra-structure for the industries and segregate them according to its sector. Many incentives are given to them to improvise and re-engineer their factories in order to tap on the exports to generate work for the mass and inflow of US and Euro Dollars...

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