Thought Leadership

The Vertical Growth Path

The Vertical Growth Path

Pramodh Menon, President, Partner Business Group, Cisco India & SAARC

India's GDP has grown over 8% in the last three years, making it one of the fastest growing economies in the world. This growth momentum is predicted to remain at 7-8% until 2020, facilitated by attracting global investments besides tackling socio-economic development issues and instilling governance robustness. Small-and-Medium-Sized Enterprises (SMEs) play a big role in facilitating economic growth through affordable products/services and enable sustainable development by creating employment in rural and semi urban areas.


Tier II cities drive India's growth story for the SMEs because heightened business activity, increasing job opportunities, rapid urbanization and use of the internet are transforming upcountry markets. This coupled with growing investments is pushing sales for small business product lines. With over 65% of our population living in tier II & tier III cities, small businesses can tap into a host of opportunities in areas such as rural banking, healthcare, education, retail, IT/ITES and connected agriculture.


IT/ITES: Within the IT/ITES segment, SMEs have plenty of growth opportunities to explore in software services, product development and IT consulting besides human resources (source of a qualified talent pool). Opportunities abound in the domestic market thanks to the government push for transparency in business processes. Middle Eastern countries, Asia-Pacific and the European markets are expected to fuel growth of the Indian ITES sector, and SMEs can tap into these markets to derive maximum benefit.


Healthcare: According to springboard research IT spending in Indian healthcare industry is slated to reach US$ 609.5 mn in 2013 and US$ 280 billion by 2020. Government initiatives along with a focus on Public Private Partnerships will lead to a slew of opportunities in tier II and tier III cities for creating low cost, interactive, care-at-a distance healthcare models. SMEs can tap into opportunities that exist in areas such as medical devices and equipment, affordable diagnostic services, medical insurance and other support services. Solutions that integrate high-definition video, audio, medical devices and collaboration tools help deliver an enhanced doctor-patient consultation experience across remote areas thereby meeting the increasing need for easy-to-access, high-quality patient care.


Agriculture: India has 9% of the world's total agricultural land; agriculture contributes 25% to India's GDP and employs 72% of India's population. Several opportunities exist to bring in technology to improve productivity and increase the efficiency of the entire supply chain from production to retail. SMEs that can create commercially viable solutions by leveraging the strengths of technology besides an abundant, cost-effective labor supply from the underserved communities will stand to gain the most. ICT solutions (Telecenter services) enable knowledge transfer to farmers, provide planning tools to agri-businesses and connect the various players helping to conduct commerce more efficiently. They also provide access to competitive markets helping to generate income and manage the quality of production.


Education: India's services-led economy continues to demand an educated and specialized labor pool. Several interesting SME opportunities exist within education sector in e-Learning and tutorials, vocational training and pre-school education besides distance learning and gaming for education. Developing affordable solutions for these spaces using ICT technologies will help SMEs gain traction both in developed and developing markets. Solutions that facilitate distance learning and blend audio,video, Web collaboration, white-boarding, and instant messaging (IM) capabilities into a single, comprehensive platform unlock a world of new opportunities for collaboration and communication among students, faculty, and staff.


Retail: With the economy showing progress, even small retail outlets today accept plastic money and the largely unorganized retail sector is slowly coming to terms with technology adoption. This provides SMEs with multiple opportunities to create solutions like card swiping terminals, inventory management and POS terminals for faster invoicing. All they need to do is partner with the right vendor and facilitate the development. Connected retail architectures that come with centralized applications, and flexible management capabilities help improve the shopping experience, reduce costs and deliver business capabilities faster.


Banking: In order to improve banking in rural areas, the National Bank for Agriculture and Rural Development (NABARD) and sponsor banks made a commitment last year to absorb 90% of the cost for implementing modern banking technology in regional rural banks. SMEs can explore these opportunities to create solutions for better service delivery using new age technologies like collaboration, video, unified communications and cloud computing. Connected platforms enable financial organizations provide targeted marketing content, news and information to customers, accelerate product and service offerings, and improve sales productivity and efficiency.


Challenges enroute

While the opportunities for growth abound across industry verticals SMEs face problems in exploring them due to the absence of adequate and timely finance, limited knowledge and non-availability of suitable technology at affordable cost. Therefore SMEs look up to their partners for technology support and rely on the services of an experienced partner for both initial installation and continued maintenance.


To empower the SME sector to take its rightful place as the growth engine of the Indian economy, partners must act as consultants and help SMEs develop new business models to provide integrated services to their customers. As new age technologies like collaboration - especially video, data centre and virtualization, cloud and cloud based services take centre stage, partners need to emphasize the business impact of adopting an updated technology/network.


Partners can elaborate for example, how collaboration helps reduce costs by enabling employees connect across geographic boundaries and increases productivity irrespective of timelines; highlight the benefits of video like reduced travel expenses, greater collaboration, increased communication, and lower staffing costs to enable SMEs adopt the technology more convincingly. Discussing the necessary security evaluations an SME should undertake before jumping into the 'cloud' like security of end devices, the connection to the cloud, and cloud services will help SMEs understand about confidentiality, integrity, and availability of data in the cloud.


Beyond the 'trusted advisor' role, partners can help SMEs build capabilities - design, install, and manage their advanced technology solutions. Depending on what the customer needs, partners can also work with a service provider to offer new solutions and services, or bundle services and solutions together to differentiate their offerings in the market. Offering different types of solutions depending on the size/ business needs of the SME organization will be most beneficial.

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