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Sunday, May 02, 2004

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`SMEs lagging in IT, e-readiness'

Our Bureau

Chennai , May 1

SMALL and medium enterprises (SMEs) are slow to adopt information technology to improve efficiency and quality of their products.

According to a survey on e-readiness (electronic readiness) of India, only 8-10 per cent of the over three-million SMEs have ventured into IT usage, said Ms R. Rajalakshmi, Director, Software Technology Parks of India (STPI), who is also associated with the study.

The study dealt with IT deployment and e-readiness of SMEs.In a sample of 4,000 large SME firms (above 500 employees), only about 35 per cent were in the transaction preparation stage — invested in enterprise resource planning (ERP) software. About 33 per cent were planning to go in for an ERP, which attempts to integrate all departments and functions across a company on a single computer system, she said.

Speaking at a seminar here on `e-Business on demand, IT - Five years hence', she said that out of 4,000 large SMEs only 15 per cent of them had moved beyond ERP.

About 10 per cent are preparing to have a transaction process in place — allowing buyers and sellers to deal online — while another 10 per cent has a support planning - logistics to move goods. The seminar was organised by the Federation of Indian Chambers of Commerce and Industry.

In a sample of 16,000 medium SMEs (less than 500 employees), about 6.5 per cent were only in the transaction preparation stage - implementing an ERP - while 4.7 per cent were planning to deploy an ERP software. About 8 per cent of them had a transaction support (logistics) in place, she said.

In another sample of over 40,000 small SMEs (less than 50 employees) with a Web site, only one per cent has completed an ERP while 2.7 per cent is thinking of having one.

The results also showed that small enterprises in sectors such as leather, steel and chemical did not spend on IT, but use third party portals to buy and sell products.

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