The share of Indian small and medium enterprises (SMEs) in total IT spend has been growing rapidly over the last few years. And now there is evidence that growth in their IT spend is set to continue at a robust 24 per cent. This growth rate is the fastest amongst all BRIC (Brazil, Russia, India and China) countries. Russia, China and Brazil follow at 22.9 percent, 20.4 percent and 19.4 percent respectively.

Further, while business growth and need for efficiency, to meet the challenges of globalisation, are the main drivers for increasing IT adoption, customer push and compliance need play important roles in finally triggering the IT purchase decision.

The Microsoft-AMI Partners report on IT adoption in Indian SMEs, released on Tuesday, reveals that while half of the 250 surveyed businesses cited the need to manage rapid growth as the key reason for adopting IT and 41 percent stated that IT helped them improve efficiency, a high 39 percent finally adopted technology to meet the need for regular interaction with large Indian or international customers.

The report offers a view of the key trends in the overall business environment of SMEs across verticals and places IT adoption in this perspective

"Larger customers are more demanding," says Rajeev Mittal, Group Director, SME, Microsoft India. “SMEs are forced to provide more customisation, improve communication and turnaround time and comply with regulatory norms." In fact, 30 percent of respondents confirmed that standards’ compliance was an important trigger for IT purchase.

The Indian SMEs are on a firm growth trajectory, according to the report, with 60 percent of PC-using businesses expecting 20 percent growth and 16 percent planning to add branch offices to expand operations. The SMEs are also likely to emerge as dominant recruiters with 50 percent planning to add over two employees each next year.

Speaking at the release of the report, Mittal said: "Microsoft is committed to the SMEs in India, and believes that insights about this community are imperative if we as an industry are to deliver the kind of partnership the community demands and deserves."

One of the softer insights thrown up by the report includes SMEs feeling that being IT savvy enhances their image. Thirty-nine per cent of SMEs averred that it is important to keep up with technology trends, while 56 per cent felt that being perceived as IT savvy or "hi-tech" gave them a competitive edge.

In the three distinct "adoption waves" of IT by SMEs, a majority (45 percent) are going through the first wave of building basic infrastructure investing in portable PCs/ notebooks equipped with anti-virus and office productivity suites. Internet usage is frequent and a basic company Website sometimes exists. Ten percent are in the "connectivity phase" and use their websites for transactional purposes.

Mr. Divya Aggarwal

Money Management Consultants Ltd

Senior Copy Editor, Money Management Consultants Ltd
New Delhi, India

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