Importance of micro,small and medium enterprises(MSMEs) as one of the most vibrant sectors of the economy is widely accepted. It has created tremendous employment opportunities and currently employs over 60 million workers. It is estimated in terms of value,the sector accounts for about 45% of the manufacturing output and 40% of the total exports of the country.
In recent times, the integration of information and communication technologies, especially the internet,has revolutionised operations across businesses. Some industries such as travel, hospitality, international trade,business services,banking and finance have completely transformed their operations and service delivery models by leveraging technology.
However,the benifits of internet are highly underutilised in India. Even in cases where internet and IT are used,these are restricted to a few basic processes such as communication and documentation or industry segments. Even if one ignores micro-enterprises ,which are extremely small in terms of size and investments and have a limited scope of using internet and technology,there is a considerable small and medium enterprise(SME) sector where the adoption of technology can be much more comprehensive . A recent study by Assocham predicts that by 2012 ,the SME sector is expected to contribute 22% to India’s Gross Domestic Product ,up from 17% at present. This paper primarily focuses on the SME sector as potenitial gainers from greater adoption of internet and internet-enabled services.
Today, a host of free and low cost services are available online ,which can be used by these enterprises to increase efficiency for the entire range of business processes across their value-chain. Many of these are global tools and allow companies in India to benifit from best-in-class services available to their international peers. Besides,there are many tools that address the requirements of indian companies or can be customised to meet specific needs of different industry segments.
There are two categories of tools and value added services that can be accessed using the internet:
1. Products and services that can be downloaded into a user’s computer and used either off-line or on-line. This requires the users to have a computer with necessary specifications as well as basic operating system and software installed in the computer beforehand.
2. Products and services that can be used online in real-time by accessing internet irrespective of the computing device used or the location of the user. In fact,there is now a move towards a new technology called cloud computing where all the software and hardware requirements to use applications are handled by a remote server. This technology, which is currently under development globally , is expected to gradually shift the entire desktop operations into an internet environment, by enabling users to access and work on their remote server with installed software programmes; all with a web-browser and a good internet connection. This will further increase the ability of internet to generate value for enterprises by increasing their productivity and thus,will enable them to grow their businesses.
It is however important to recognise that processes such as communication and documentation with more immediate use technology have witnessed the maximum innovation. Similarly, even in the case of small scale business ,there have been industry segments such as travel, resesarch, accounting and book keeping and business services, where technology had a direct role to play in increasing productivity. In such cases,the adoption of internet-based technology solutions has been relatively high.
Therefore,to appreciate the potential impact of these services fully,these services have been analysed under different business processes across the SME value-chain . Further,these processes have been categorised as operational processes and functional processes . This also allows us to put in to context the current adoption,future potential and scope for improvement in productivity.
