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5 Ways In Which Cloud-Based Solutions Are Helping SME Industry

5 Ways In Which Cloud-Based Solutions Are Helping SME Industry
Image credit: Shutterstock
Guest Writer
Co-founder & COO, Tentacle
5 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

The SME industry in India, which has close to 55 million enterprises, continues to be beset with paramount issues, despite various solutions available in the market. They end up deploying solutions that are expensive as well as inefficient, leading to poor productivity, low Return On Investment (ROI) and reduced profitability for the industry as a whole. 1/4th of the industry strength, around 12 million SMEs, are found to be looking for cloud-based solutions to solve their business problems and meet their daily requirements.

As per the current trends, an SME spends close to Rs. 5 lakh, annually, on their software needs and still don’t find viable cost effective and practical solutions. An indepth analyses of the sector helped identify the major challenges and how cloud-led solutions are providing the solutions that are much needed.

1. Modern technology and software

The typical SME is still stuck with using poor technology and homegrown IT solutions. For reasons including high-cost, unavailability of quality and tailored solutions at the local level, inadequate service and support, the SME has traditionally deployed solutions that are inefficient, confusing and unproductive.

How Cloud-Solutions solve this: deployed and consumed over the cloud with universal benefits of standardized pricing, 24*7 online support and training available, cloud solutions enable SMEs with all the benefits of modern technology and software. Mostly, one needs is a cell-phone and internet connection to function seamlessly, regardless of location.

2. OpEx models versus CapEx

An SME is always faced with limited financial resources, particularly finances for upfront investments and CapEx. Since the ticket sizes of IT solutions are too small to interest the Enterprises, SMEs typically use home-grown solutions which drives them to select cheaper solutions and adopt short-term fixes, often resulting in the SME getting stuck in the vicious cycle of poor ROI, but still unable to take corrective measures due to insufficient funds.

How Cloud-Solutions solve this: a massive advantage with cloud solutions is that they are OpEx models versus CapEx. So, the SME pays for the services they use on a monthly basis. This is a boon for the SMEs since it takes away the huge barrier caused by lack of funds.

3. Affordable IT & MIS

Unlike MNCs, SMEs typically operate in an unorganized environment without processes, formalized work flows and standardized metrics.Led by the proprietor, following the “rank-and-file” employees’ method of doing things, these are instinctive, ad-hoc and reactive methods affecting efficiency and productivity. A combination of lack of proper IT, processes and metrics results in SME management and employees to working with poor MIS, affecting their quality of decision-making.

How Cloud-Solutions solve this: cloud-solutions add immense value by offering cutting-edge, modern products and affordable IT solutions. New features and product innovations are added centrally making them available to all clients. This helps the SME with superior processes and easy to monitor MIS, resulting in transparency, real-time knowledge along with informed and timely management.Depending on its need and its solutions, cloud products can reduce the annual Rs. 5 lakhs, that an SME spends annually, to as low as 30 per cent.

4. Taking away the ‘Fear of Technology’

One of the biggest barriers to technology adoption by SMEs arises due to a “fear of technology”. This is a result of many factors including the reluctance to make a significant investment into something new and, unknown. SME employees fear change, especially, at not being adept at new technology, limited training and unavailability of constant support. Software suppliers are also inaccessible due to distant geographies.

How Cloud-Solutions solve this: cloud-based solutions are easy to understand, implement, monitor, and track. It evades the need of an expert IT personnel allowing the end user to read and follow instructions in their preferred language. Infact, by its very nature, cloud solutions are based on user-friendly technology models.

5. Ease of access and wide-spread reach

SME industry is a very fragmented market, expanding across the length and breadth of India, operating across metros, tier I-III towns, steeped in regional economies, calendars, weather patterns and languages. Due to the expansive geography, it is not only difficult but also costly to provide relevant and effective solutions to the SME. The cost factor, particularly, has made it unviable to sell and service this vastly fragmented SME market.

How Cloud-Solutions solve this: amongst the biggest benefits for SMEs looking for cloud-based solutions is ‘ease of access’. Since there is nothing “physical” to be delivered, or installed, a cloud-based solution can be sourced, purchased and started up without any need for local salespeople, suppliers or support personnel. This has not only connected the SME to a vastly available network of cloud products and services, but also made it accessible for the supply side of cloud-companies. These cloud-technology suppliers can now access a large customer base of SMEs, thereby, allowing them to provide services at competitive prices through an OpEx model, that the industry can easily afford.

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