The Hindu Business Line : ‘Tailored to fit SME needs’

“The cost of acquisition is reduced because the integration, validation, and testing of the total solution eliminates the need for expensive sizing and installation services during implementation.”

Juhi Jotwani

Adith Charlie

The millions of small and medium businesses in India need the backing of technology to support their plans to get into the big league. However, the current economic downturn has increased the cost pressures on such organisations.

In a bid to address the concerns of SME firms, says IBM, it piloted its initiative, called “IBM Smart Business,” in November last year.

What does Smart Business offer in terms of cost saving for the discerning Indian SME? “The total savings will depend on the solution but 30 per cent reduction in the cost of acquisition and 30 per cent reductions in the cost of administration are common,” claims Juhi Jotwani, Vice President - Smart Business, Systems and Technology Group, IBM.

eWorld tuned in for more details.

How does IBM’s smart business distinguish itself from the myriad ’SMB solutions’ in the market?

Could you illustrate with the help of an example?

IBM conducted focus groups with hundreds of small and medium business executives around the world. They told us about their IT experience. They said existing offerings from competitors were costly, complex and limited their choice, as well as their business agility.

As we listened to these clients, it became clear that there is a profound lack of IT innovation today for small and medium business. IBM Smart Business was born.

Our offering will distinguish itself on three fronts.

First, it will use its technical expertise in hardware, Linux, middleware and services to deliver solutions to mid-market customers holistically.

Second, IBM developed Smart Business in close collaboration with Independent Software Vendors (ISVs) who provide solutions for mid-market companies.

Unlike other ‘bundles’ where off-the shelf components are sold together, ISVs instrument their applications to IBM’s integration framework to deliver improvements in integration.

Since IBM does not compete in the application marketplace, we have an unmatched portfolio of close ISV relationships upon which we can draw.

Third, IBM has a strong channel which gives us the reach to bring a local face to customers across India. When you consider these differentiators, you will see that no competitor can match us on all three.

How is the ‘Smart Business’ strategy being driven in a price-conscious market such as India?

Could you elaborate on IBM’s pricing strategy?

We can help by reducing both the cost of acquisition and the cost of administration of an application.

The cost of acquisition is reduced because the integration, validation, and testing of the total solution eliminates the need for expensive sizing and installation services during implementation.

The cost of administration is reduced as we automate fix/patch management, simplify the definition of users, streamline backup and recovery, and make support more proactive and more effective, reducing down time.

The total savings will depend on the solution but 30 per cent reductions in the cost of acquisition and 30 per cent reductions in the cost of administration are common.

There is a lot of pent up demand for technology in the hinterland of India. What are your targets in terms of sales over the next few years in India?

While we cannot share specific sales targets, we agree that the ‘hinterland’ is a significant opportunity and IBM has been expanding coverage beyond the tier one cities in India to address more of the mid-market opportunity.

IBM is making investments in IBM Smart Business offerings, ISV recruitment, national channel enablement, and marketing — this should give some indication of the opportunity that IBM sees in this business.

Could you provide details in terms of the customer profiles and industries that are taking to this concept?

In India, we piloted this model in November last year and we began by focusing on three industries in a single region (West). We realised that we needed a broader scope, so we have expanded the programme to the entire country and to include more industries. We already have a couple of wins, such as Kusumgar Corporates (a leader in technical textiles in India) and wins in healthcare and education sectors in India.

We are currently seeing traction across verticals such as Healthcare (HIMS), Education (ERP, E-learning), Manufacturing (ERP, BI, CRM), BPO/ITES (Contact Centre solution) and cross-industry solutions such as payroll, leave management, finance, accounting, business management applications, customer relationship management, and HR management.

Witnessing the success in India, IBM launched Smart Business in the US and will continue to expand reach to other geographies starting later this year.

adith@thehindu.co.in