Technology and innovation are crucial differentiators for competitiveness and survival of small and medium enterprises (SMEs).
Mr P. Nanda Kumaran, managing director, State Bank of Travancore (SBT), said this while addressing a workshop on ‘IT for SMEs’ the bank co-hosted with Confederation of Indian Industry (CII) here on Tuesday.
NEED FOR STRATEGY
Micro, small and medium enterprises (MSMEs) need to strategise themselves to be in tune with the global supply chain management of transnational corporations and large companies.
According to Mr Nanda Kumaran, many SMEs, especially those in tier 2/3 cities or rural areas, are not aware of existing IT solutions that may solve their problems.
“Technology is changing very fast and constant upgradation is emerging as a major challenge for SMEs, especially viewed from the cost angle,” he said.
Given the difficulties in investing in technology upgrade, many units are being forced to continue with their current IT infrastructure, which in many cases works on obsolete technology.
Since smaller businesses find it beyond their means to hire an IT manager, it is typically the owner who takes all decisions, right from purchase to sales functions.
IT ADOPTION
A majority of the units does not have standardised systems and procedures, or if they have, they are not documented.
Furthermore, there is a tendency to change them frequently. This makes it difficult for a third party to track existing businesses and practices and match them with IT processes.
Adoption and integration of IT in suitable doses will certainly help SMEs in improving efficiencies in their operations, the SBT chief said.
In this connection, he said that the bank has initiated several strategies for the benefit of the SME sector and ensure their sustainable growth under ‘a new world.’
SBT INITIATIVES
“We have set up an exclusive MSME business department at our head office to coordinate development activity at various operational levels,” Mr Nanda Kumaran said.
The bank has a technical consultancy cell which undertakes appraisal of SME projects, carries out industry-specific studies and provides business counselling.
Specialised SME branches have been set up at various centres and SME divisions added to branches that are identified as SME-intensive centres.
Development of SMEs influences not just growth of per capita income but also ensures better economic growth for the country, he added.