Thursday, September 4, 2014

How SMBs can grow bigger?

I have spent a lot of time observing the way small businesses work in the Garment sector in Tirupur, India. There are 1000s of small and medium sized units that churn out millions of T-Shirts, tracksuits and the likes in a day for their customers predominantly in the US, Europe, Japan and others.

For an outsider, it is a wonder how these units work together to come out with a shipment that includes quality checked products. It is a massive team effort crossing different skills, different domains and different cultures to mass produce, ship from India and sell them in Europe.

Communication happens across board right from physically visiting a 'Dyeing unit' to check whether the cloth that was given for a certain order has been dyed to electronic medium like email, voice, spreadsheets, specialised Apps for communicating the designs, optimising the cutting of the reams of cloth or making the designs on the T-Shirts like embroidery or printing and so on. There are innumerable possibilities that arise with every order which can be as crazy as a certain type of button to be fixed somewhere near the pocket with a certain size and colour. I am just sounding an example to show you how 'things of art and fashion' identified and designed by some one , some where in the world is translated to 'things of labour' and 'mass production' and the numerous steps involved in getting them to be shipped finally.

I believe the above is the nature of most of the SMBs in various other domains, be it, ancillary parts manufacturing for automobiles or even a logistics company sending off its trucks to deliver goods. They all have innumerable interactions every day within the business, across businesses.

Many of these SMBs go through the cyclicals in revenue realisation, labour management or government policies on exports or others. Because of the ups and downs, the sector (mostly from what I have seen in India) is highly unorganised, chaotic and most often huddled into groups that support one another informally often disallowing new entrants.

Most of the SMB owners (at least the ones I have seen) are not tech savvy. They absolutely rely on paper and pen and mostly memory for information management. They appear with flashy phones and tablets mainly to show off their status in a business meeting with others. But the owners are completely ignorant of how software can be used to scale their operations.

It is also partially true that the software folks who have created things for them have failed to understand the exact needs that would make the life of these business owners easy. Many a time, the software is extremely unfriendly with 100s of options and features and menus that acts as a deterrent. On the other extreme lies SAP which covers a lot of ground, but again lacks the ease of use or the tons of configuration to set it up apart from the cost. Custom software suffers from too much of pointed solutions often requiring the owners to go back to the software company to keep patching things. The tools that seem to be used widely are Email and spreadsheets and PDF files.

It is very clear that a lot needs to happen here. Especially software that is not as hard and pricey as a SAP while not as specific and patchy as a custom build or as generic and lot of labour like Email or Spreadsheets to come to the rescue of these people.

Collaboration like a social networking tool, Organisation of information and retrieval for both structured and unstructured data from documents to pure structured business data that can be done by any one easily like the way they organise files and folders in the paper world but having the advantages of a digital world which can relate things and search or query, access controls at different levels within and outside of the business and discretion in sharing of information....

This is a serious want, a big want and a complex one to accomplish.

This can alter the way SMBs work enabling a whole new information supply chain, taking to a new level the scale and mainly ease of doing things. A tighter integration of information and data collaboration and standardisation of processes and communication across the loosely coupled SMBs can make them suddenly look like a single entity that can stand up to challenge larger businesses. This is a great model to achieve as it has the power of loosely coupled independent entities that are geared to achieve bigger goals.


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