AIRCEL BUSINESS SOLUTIONS

Objective of our research

Study Objective – To help ABS to understand the end-user behaviour, plans, and perceptions of the targeted segment for enterprise
services to help expand its knowledge of the Small and Mid-Market space and to help with its go-to-market strategies

 To map the vertical -wise need gap to ensure healthy onboarding & retention.
 To understand various verticals in the SME and SMB segment with respect to the following:

Existing Infrastructure

Vendor Selection Criteria

Decision Making Process

Opportunities
RESEARCH INSTRUMENTS
Research Methodology
 We conducted the research for this report in May 2010. The methodology employed for this study included primary, as well as secondary
research.

Primary Research:
Secondary Research:
Secondary Research:
Exploratory depth interviews,
Review of public information
Review of public information Secondary
Secondary Face-to-face interviews and
sources such as vendor
sources such as vendor
websites,
websites,
white
white
papers,
papers,
Research
Research Primary
Primary
telephone interviews conducted
directly . At this stage we
reports, articles, websites and
reports, articles, websites and
blogs and journals from other
Research
Research address IT users (primarily IT
blogs and journals from other executives and people in similar
research bodies, associations. positions).
research bodies, associations.

4
Demographic Profile
Vertical Company Contact Person Designation Turnover
Car Dealer Harpreet Ford Mr Dinesh CIO 100 Cr
Car Dealer Hans Hyundai Mr Alam Systems Manager 150 Cr
Car Dealer Competent Mr Anoop 200 Cr
Car Dealer Galaxy Toyota Mr Dinesh CIO 120 Cr
Education JIIT Mr. Hemant Malik Systems Manager Non-Profit
Education RKCS Mr. Deepak Bansal Systems Incharge Non-Profit
Engineering Telecon Mr. Rakesh K. Chopra Managing Director 2 Cr
Healthcare Medicity Mr Harmandeep IT Manager- new projects N.A.
Healthcare MAX Healthcare Mr. Pradeep k. Saha IT Manager N.A.
Hospitality Lalit Hotel Mr Sanjeev Nautiyal IT Manager N.A.
Hospitality Le Meridian -- CIO N.A.
Hospitality Crazy Noodles Mr Bhushan Bharat CIO 20 Cr
ITES PCS Mrs. Anita Chopra CEO 3-5 Cr
Manufacturing Elegant Seat covers Mr. Sudhir Singhal Properitor 17-20 Cr
Manufacturing Indo-Asian Mr. R. Singh IT Manager 250 Cr
Manufacturing IshMan Mr. Narottam IT Manager 4-6 Cr
Manufacturing MMI Fans Mr. Rohit Anand Managing Director 25 Cr
Retail CTC Plaza Mr Kailesh Singh CIO 15-20 Cr
Retail Chic Mart Mr. Sandeep Bhatt Owner 15-20 Cr
Retail GoodThings Mr. Raj IT Manager 10-12 Cr
Retail Mittal Supermart Ms. Ruchika Mittal Owner 5-7 Cr
 Scope:
 City: Delhi
 Sample Size: 22 companies
 Respondents tilted toward IT Managers, but included the following roles: MD, CIO, CEO,CTO, COO and Line of Business Heads
 Procedure:
 A primary research exercise done to successfully conduct interviews with key target accounts.
 Interviews conducted from end April to May2010
 Respondents were screened to ensure they fit within the project scope (Decision Maker/Influencer)
Market segmentation
 The ICT market contains six major segments: IT equipment, software, IT services telecommunications equipment, and carrier services. The IT
market is the sum of IT equipment, software, and IT services. The telecom market is the sum of telecom end-user equipment, network
equipment, and carrier services.
IT market
IT equipment Servers (x86)
PCs
       Desktop PCs
       Portable PCs
Printers, Multifunction Printers, Copiers, Monitors, Other IT equipment

Software System infrastructure software, Tools, Application software

IT services Hardware maintenance, Project services, Outsourcing services
Telecom market
Communication Fixed line phones and Customer Premises Equipment (CPE), LAN routers and switches
equipment PBXs, KTS and applications, Voice switching equipment
WAN data routers and switches, Wireline access infrastructure
Mobile access infrastructure, Transmission equipment, Support systems (OSS/BSS)
Infrastructure services   

Carrier services Fixed voice telephony, Business data services, Internet access and services
Mobile voice telephony, Mobile data services, Pay TV
INDUSTRY OVERVIEW
 Personnel

Hardware

Systems
Sis tools infrastructure
software
Tools

Office
automation
Application
Business
software
Software products

application
products
Technical
application

Hardware
maintenance
Application
related
It consulting
Infrastructure
related

It training
IT expenditure

Project service

Application
related
Software & it services

System
Infrastructure integration
related
Complete
It services

outsourcing
Infrastructure
outsourcing

Hosting

Application
Outsourcing

outsourcing
Application
management
Business
processing
outsourcing (bpo)

Miscellaneous
What do SMEs want?
Products that are simple to understand and set up

Value for money

Suppliers who sell a range of products and services

Local support

Security

Mobility

Cost control: operating costs

Integration and ‘refresh’

Reasons of SME little participation in standardisation

Lack of human resources

Lack of time

Lack of capital
Lack of skills

It is even more the case regarding ICT standardisation, as it is not their core business
Drivers and Barriers for ICT Growth
Competitive pressure
Internal financial pressure
+ Other NCPs doing ICT
+ need for growth
+Need for increased margins
Brand +ITCPs invading NCP territory
reputatio - Dominate competitors
- Capex constraints
n - partners as competitors

Information and
Information and
Communication
Communication
Technology
Technology

Customer perceptions Business model changes

+ Customers see as a logical + IP means it all speaks the same

extension of current capability language
- Customers don’t see NCPs as + Virtualization and utility models
credible players spreading
Benefits of ICT use for SMEs
Better time and finance
management

More efficient
administration

Lower cost

More efficient
communication

Lower cost of promotion

Lower cost of knowledge

Growth phases (common to all verticals)

Basic Communication Basic Information Advanced Communications Advance Information

• Fixed line/Mobile phone, Technology • Email, Internet, browsing, Technology
fax • PC equipped with basic video, conferencing, • PC with advanced software
software and hardware intranet, file sharing, such as databases,
(e.g. PC with proprietary creating websites, e- Enterprise Resource
and/or free and open- commerce, Voice over Planning, Inventory
source software connected Internet Protocol Management, Customer
to a printer) Relationship Management
What are the Key Barriers

Concerns over the cost of ICT investment (and the real returns on this)

The fear of complexity or failure to implement and use judicially

The general lack of understanding of technology or unawareness of solutions

available.
EXECUTIVE SUMMARY
Key Highlights
 What is propelling the growth of managed telecom services across all market segments?
 Need for ‘always-on’ global connectivity,
 the intention of reducing capital and operational expenditures and
 Enterprises are increasingly moving to outsource their network services to a single vendor and not look at each business component in isolation for
three reasons:
 One stop solution
 in order to reduce their total cost of ownership and
 improve overall productivity
 Considering outsourcing their network to make them more robust , secure and resilient.
 Small and medium businesses need to lower IT infrastructure running costs and yet stay abreast of new technology shifts.
 the importance of linking and remotely managing the local area network (LAN) of multiple branch locations is being increasingly recognized as an
imperative element of business operations and communications.
 when organizations are looking to reduce their overhead costs, services such as high definition video conferencing and telepresence have made
significant inroads.
 Enterprises are still skeptical about allowing a third party to host applications and networks that may be carrying sensitive and confidential
information. This is particularly so for applications such as CRM, billing and other financial applications
 Vendor Selection Criteria
 Market is highly competitive with limited difference in performance of the various brands;

Understanding
Account Post-sales
Brand reputation Pre-sales support and knowledge
management support
of my business

Total Innovation &

Service/warranty Price/value for
Product features solution/range of product
offering money
products development

Ease of doing
Financial support Reseller network
business
Key Influencers for Decision Making
 Employees, online forums and the Internet are the most significant primary and secondary sources that influence networking and
communication decisions.

Internal External

Internal Employees Online Forum/ Internet

Local IT Consultant/ Advisor Seminars, Conferences, Trade fairs & Events

System Integrators IT Magazine/ Journal/ Newspaper/ Periodical

Networking & Communication Reseller Whitepapers

Networking & Communication Vendor Analyst Reports

VERICAL-WISE INSIGHTS
Hospital/ Healthcare
 Operating environment
 Healthcare is a relatively economically resilient industry but still vulnerable

 Drivers and barriers

 Rising aging population and ascent of chronic diseases. Technology will improve quality of care, decrease costs and increase access to care
 Initial cost of IT, fear of change and market confusion are impeding the adoption of IT

 Business strategy
 Raising efficiencies and cutting costs are high priorities for hospitals
 Providing the best care possible, “first, do no harm”, is at the core of healthcare

 Technology enablement
 SaaS will decrease upfront costs for providers and make maintenance easier
 Speech recognition will help drive meaningful adoption of EHRs
 In the past, major barriers to EHR adoption included high upfront costs and lack of IT resources to implement and maintain the technology.
 A SaaS model solves both of these issues and we believe it is the best approach for physician offices and small hospitals.
 With a predictable, monthly expense, a subscription-based SaaS EHR is a much easier cost for providers to swallow. Furthermore, as the
EHR vendor hosts the solution, providers only need to worry about their internet connection.
 To understand the healthcare industry and specifically multispecialty hospital chains, we studied one upcoming chain and an established setup
 It gave us an insight into what the requirements at the start are and what is the journey that the hospitals go through for becoming big
 No hospital starts with all the specialties or at maximum capacity
 They start with the basic functions like OPD and emergency and keep adding specialties
 Newer locations are added later
 Initial requirements are to manage a stand alone hospital but as they become big, they need to manage more patients, more staff, inter-
hospital connectivity etc.
 Capex initially is high, and goes higher again when hospital capacity is addressed
 IT pain point is the budget, extra budget is allocated for buying better medical equipment
 IT is seen only as a support function, not the backbone
 Smaller hospitals want to manage data centres and keep all records with them, as they grow bigger they move to outsourcing IT
 in the initial years the CAPEX is high and the OPEX is comparatively low. After the hospital gets established, the CAPEX goes down considerably
and the OPEX increases.
 Selecting multiple vendors is only for the benefit of uninterrupted connectivity and 24 hour connection that is important in a hospital
 SUPPORTING MODULES
•SUPPORTING
Blood Bank MODULES
• Blood Bank
• Physiotherapy
CORE MODULES • Physiotherapy
• Dieting
• Patient
CORE MODULES • Dieting
• Dialysis
• Patient
Administration • Dialysis
• Bio-Medical
• Doctors
Administration • Bio-Medical
• CSSD
• Doctors
• Nursing • CSSD
• Movements
• Nursing
• Ward • Movements
• Housekeeping
• Ward
• Theatre • Housekeeping
• Complaints
• Theatre
Management • Complaints
• Billing
• Laboratory
Management • Billing Maintenance
• Preventive
• Laboratory
• Radiology & Imaging • Preventive Maintenance
• Pharmacy
• Radiology
• User & Imaging
Management • Pharmacy
• Purchase
• User Management • Purchase
• General Stores
• General Stores

ENTERPRISE – ENABLING MODULES

HUMAN
FIXED ASSET FINANCE
HUMAN
RESOURCE
FIXED ASSET FINANCE
RESOURCE

CURRENT SCENARIO
Capex in initial stage is high
IT managed in-house
Basic modules installed from various vendors
No inter-relation between hospital branches, they
operate as stand alone units
Bandwidth required for report and image
transmission
Web portals are only meant to see reports
Using leased lines but migrated to MPLS as they
foresee need of virtualization and cloud computing
in the future
Telephones still being used for intra hospital and
inter hospital connectivity
FUTURE REQUIREMENTS
High bandwidth for inter-hospital consultations
Need for high resolution video and audio
solutions for remote surgeries and consultation
Look at providing at-home consultation to
patients who cant travel
On-line availability of medical history, patient
portals
Databases for patient records and case studies
for future use
On the move connectivity for doctors
Integration of path labs, chemists, etc into the
hospital system
Online booking of OPD appointments
HOSPITALITY
 From our research we identified two models that work in the hospitality industry
 Stand alone or franchisee hotels
 Chain of hotels

 The requirements of both are very different.

 Stand alone hotels don’t need interconnectivity and have their own models and conditions of operation, they are not dependent on reflecting
change at the centre

 Chain of hotels need a centralized system so that any change in room rents or in food menus or the like gets reflected in all the hotels

 Stand alones/franchisees are given guidelines by the parent company on the services and service vendor to be used.

 POS is the most demanded solution followed by HMS


CURRENT SCENARIO
Hotel reservation systems
Reservation desks, housekeeping, kitchen etc
have different solutions
Manual bills produced at each location, then
entered at front desk and bills produced
Loyalty programs on the basis of forms filled
Connectivity on phone or through leased lines
Single self managed data centers
Locations connected to central data centre but
not interconnected
FUTURE REQUIREMENTS
Toll free numbers or online portals for centralized
Hotel reservation
Centralized billing for Reservation desks,
housekeeping, kitchen so that the end invoicing
and intermittent transactions are automatically
recorded
Loyalty programs on the basis of stay frequency
BI solutions for room preference, time of year of
visit and other trends
Bandwidth requirements for in-house training/ for
virtual meetings for visitors
POS for centralization
Outsourcing of database/data centre
Migrating everything on a cloud
RETAIL
 Dynamic areas
 Mail order sales / Internet - multi-channel activities
 Specialized retailers
 Large retailers

 Investment drivers
 POS / SCM systems overhauling
 Real-time procurement
 ERP projects for smaller companies
 New services - reservation systems in the tourism sector
 Workforce management
 BPO
 Maintaining proper inventory is of paramount importance to retailers who need to have products available for consumers, yet at the same time
avoid overstocking unnecessary and costly inventory.

 ERP solutions are the largest applications implemented by retailers over the past. As retailers expand their business, the need for integrated
back-end solutions is becomes critical to manage growth.

 Increasing competition is a serious business challenge in today’s retail industry. The organized retail segment feels that there is competition
from the unorganized sector, which is huge in comparison .

 POS is the top preferred store solution that retailers have deployed in their stores .

 BI tools will gain more popularity as there is great need for an enterprise system that addresses business patterns, trends, processes, and
opportunities.

 But companies are still hesitant to invest in IT as some of the world-class solutions like RFID, intelligent shelves and kiosk solutions, still remain
out of reach for many Indian retailers. For instance, putting an RFID tag on a product can cost more than the product itself. As a result, the use
of such solutions becomes limited to niche product categories.

 Retailers will be cautious with short-term IT spending and new investments.

 Software Products & Solutions Hardware Products & Solutions Services

Industry-specific Solutions (Retail Desktop Computers, Laptops, Scanners, Billing Managed IT Services
software, Billing software) Machines, Servers, POS solutions

Business and Back Office Application Storage Devices/Systems IT Infrastructure Management

Software (ERP, CRM, HR, payroll, etc.)

Security, Data Backup, Storage, Radio Security Appliances Application Development

Frequency Identification (RFID)

Supply Chain, Enterprise Application Networking Equipment IT Consulting

Integration (EAI)
 FUTURE REQUIREMENTS
CURRENT SCENARIO
They are looking for an RFID based tag reader
Currently only sales counters have
so that the billing can become automated.
computers and central computer has tally
They are also looking at bar-coding the
Outlets connected via telephones
shelves to help the customer know that what is
kept where.
Warehousing, stock etc not computerized
They require inter-outlet connection to
Excel based retail software, tally for
support a common warehouse and inventory
accounting
Retail erp
No internet connection is being used. The
PCs are only connected by LAN
Loyalty program based in frequency of buying

Website

Web portal through which the customers can

do online buying

BI to understand stock movement and trends

in buying
CAR DEALERS
 Automotive dealers have always managed their business on margin, while vehicle manufacturers have managed their business on volume.

 Retail integration has become a key point of differentiation in the battle for customers and sustainable profits in the automotive industry.

 The transaction costs at the interface between manufacturers and dealers identified cost-reduction potential and opportunities to gain greater
efficiencies through improved collaboration between the two players.

 Retail Integration has become a Competitive Advantage.

 A retail integration office is essential to manage the massive change that is currently happening in the retail space.

 CRM is also introduced by the integration done by IT. Dealers gain a competitive edge by having one common view and sharing information
about loyal, current and prospective customers.
Modular Approach to Retail Integration

Analysis from a dealer’s perspective

Prioritise and target retail projects and budgets

Involve dealers

Measure and continuously improve


CURRENT SCENARIO
Dealer Management System is the MIS used
in every dealer’s IT infrastructure.
The parent company decides which internet
connection the dealer has to use.
Mostly they use TELE for accounting &
payroll for HR
Still integration is at a very niche level and
even though they have many branches but it is
not centrally integrated.
FUTURE REQUIREMENTS
Slowly they are planning to use VPN with a
cloud computing concept.
ERP will also be implemented slowly module
by module.
They would require excellent Wi-Fi
connections to support their above
requirement.
Also a back up support is expected from the
connection provider side so that during low
speed of dedicated lines wi-fi could be used as
a back up.
MANUFACTURING
 Investment drivers
 SRM/PLM
 Scientific and technical IT
 Optimization of existing systems
 New technologies (e.g. SOA, middleware, Open Source)
 Mobility

CURRENT SCENARIO
There are following various options in choosing
information systems for SME.
Accounting software such as Tally (very indian-
ized)
In house developed customised software
Integrated Transactional Information Systems
such as Radix, MakeESS, Octopus-E and Tech
Solutions etc.
Micro ERP systems such as NAVISION
Web Enabled ERP systems such as iBaaN, IFS
etc.
In Indian scenario, there are no fixed manufacturing
scenarios, hence no ERP’s production module fits
Open source being looked at for more security, less
OPEX, stability, more uptime than windows
FUTURE REQUIREMENTS
Cloud computing and Virtualization
A tailor-made ERP
Advisory on what solutions to use available for
different manufacturing units
A parallel demo of how the solution can run in
their organization hassle free and what financial
benefits will it bring
Single vendor who comes up on its own with a
scalable portfolio
Document and database management system-
moving away from paper and manual records

ERP being used are ones tested by competitors and

working sound.
EDUCATION
 Main Pain Point
 The lack of skilled IT personnel ranked as the main IT pain point for our respondents. High levels of attrition among IT workers at
institutions and the challenges of hiring skilled IT manpower and retaining staff to handle complex day-to-day IT operations are proving to
be major issues.

 Largest Solution Implemented

 Educational institutions are focused on implementing WLAN on their campuses to increase academic flexibility by allowing any place on
campus to be used as a classroom.

 Biggest Challenge
 lack of infrastructure ranks among the top challenge faced today. Large capex needed for infrastructure

 Future Requirements
 Upgrading Network Infrastructure an Important Focus Area over the Next 12 Months
 Software Products & Solutions Hardware Products & Solutions Services

Industry-specific Solutions (Content Management Desktop Computers, Laptops, Managed IT Services, System
Software, Educational Software) Servers Integration

Business and Back-office Application Software (ERP, Storage Devices/Systems IT Infrastructure Management
HR, Enterprise Software, Payroll, Campus
Management Solutions, Library Management, etc.)

Security, Data Backup, Storage Security Appliances Application Development

Enterprise Application Integration Networking Equipment IT Consulting

 FUTURE REQUIREMENTS
CURRENT SCENARIO
Smaller institutes
Interconnectivity of various campuses
Smaller number of students and resources to
Virtual classrooms
manage, hence complex systems not needed
Biometric systems
use very basic technology like office
communicator, antivirus scan, firewalling
More sophisticated connectivity requirements for
solution, FTP server, and website.
video tutorials, online classes, distance learning etc.
Apart from this they use windows operating
Highly enabled web portal for greater interaction
systems and MSOffice.
between the stakeholders
For connectivity they rely on high speed
Well-Managed database service.
broadband
Interaction management (Customer Care and
But bigger institutes have different requirements
Telemarketing) with
WLAN for in-campus connectivity
– Toll Free Number
LMS for enterprise management
– Bulk SMSs/Email
RFID technology for library management
– Premium service SMS handling
Web-portals instead of websites
Integration over multiple communication channels
There is a need to interconnect various campuses of
like Voice, SMS, Email, Chat, Web
the same university
CRM and Automation
Flexible Solution allowing seamless scaling of
Need to integrate various processes like admissions,
processes
attendance, grading, placements as they use a
Recording of all interactions and customer/
common database
student data
ENGINEERING
 The working of the industry is as follows
 The admin office is at a central location
 They take projects at various locations in the country, where they hire 2 type of people: labour and cotractors
 For every project tools, machinery and manpower management is required
 For every project site, small enterprises are currently using mobiles for connectivity and weekly excel reports for attendance and work
progress reporting

 Managing inventory of tools is a problem

 Contract documents and other design documents are of utmost important and are kept at project site under high security, and are sent from
one location to the other via couriers

 Look to cut communication costs but labor and contracts generally not tech savvy and open to audio or video conferencing.

 Locations keep changing hence investment in infrastructure at a particular job site not a very good idea

 Not aware of the kind of solutions available to them. The work-force is generally of engineers and technicians who are abreast with technology
but not trained to gauge IT needs.

CURRENT SCENARIO
no inter-site connectivity
Using broadband connections
Need for high definition printers
Designs and other engineering drawings being
shared via courier
Travel costs are high
Tally is the most highly used software
Rest all work being done on excel
FUTURE REQUIREMENTS
Need inter-site connectivity solutions that are
easy for labor and contractors to understand
high bandwidth and secure connections for
sharing drawings
Need for communication software to eliminate
travel costs
ERP that is as easy as tally and as indian-ised
Portable infrastructure
Advise on the kind of systems that will benefit
them
E-bidding systems
CONCLUSIONS
Inferences
Bundling could be one solution
 Most SMEs like simplicity and bundling can allow them to have a single point of contact, single bill and one contract
 Many do not have the time (or in-house expertise) to research all the offers available to them - bundled services are an easy solution to all their
ICT needs
 At the same time, SMEs can avoid the risk of being left behind by technology change - the service provider takes the strain of new technology
introduction
 Small businesses need to avoid Capex- many bundled services use a predictable per seat per month pricing model
 Bundled services should provide overall cost savings for SMEs - if they buy multiple services for one service provider, there should be financial
benefits.
 Many bundles permit a pay-as-you-grow facility, which enables businesses to expand their service usage as they grow.
 What the bundled services should offer:
 Many current bundled offers don't provide enough financial incentive to potential buyers: the discounts for buying multiple services aren't
good enough. Too many SMEs think they can negotiate better prices on single-service deals from multiple suppliers
 Service providers need to get the message across better: SMEs need more understanding of what new technologies can do for them - the
benefits need to be actively sold to them
 SMEs need to feel that they have not taken too great a risk in single sourcing. They need to retain some control over the solutions they are
using.
Things to keep in mind
 We need to recognise that small and medium-sized enterprises are not the same thing.

Small-Sized Enterprise Medium-Sized Enterprise

Don’t have identified IT requirements
Don’t have much in term of Opex Budget
Extremely suspicious when trusting security of applications
Don’t even know what all solutions or services exist in the
market
Have identified IT requirements
Have an identified IT/Telecom Budget
More open to outsourcing security relates applications
Have a know-how of the services existing in the market but
generally indecisive on which one to pick

 By application – this may seem a little narrow, but the needs of al enterprises cant be solved with a single ERP, hence the names LMS, PMS,
HMS etc.
 By company life stage – companies can grow and develop, or alternatively wither and possibly even die. At the outset a PC with a printer and
narrowband access will suffice. By the time it reaches eight employees it may need a LAN, broadband connectivity and shared application
software. Expanding companies are likely to have greater need for more communications than contracting firms
 by industry vertical – there are differences between vertical segments and how much they spend on telecommunications.
CIO Pain Points:
CIOs face three main pressures on their budgets and ICT infrastructures:

 Pressure to refine and rationalise the infrastructure that supports all business processes.
This is a three- to five-year programme involving networking and IT infrastructure and is a result of stove-pipe investment in piecemeal
solutions scattered around organisations on a departmental and geographic basis.

 Competition-level urgency for tactical adjustments.

Pressure from the business leaders in companies means that new services and processes are required on a short-term basis (three to six
months) to gain advantage over competitors and adjust to market demands

 Real end users.

Just to complete the multi-dimensional stretch, the ultimate end users are still trying to do their own thing and bring things like their own
mobile devices, instant messaging and unsecured wireless access into the corporate network.
Where is the Opportunity?
 There seem to be good opportunities for suppliers who can:
 prove that their solutions involve a return on investment (ROI).
 take part in long-term projects concerning the management of complex infrastructure and applications (methodology and scalability);
 transparency on processes is also a must, as well as a clearly defined business cases showing the company’s capabilities in long and
complex projects.

There are identified opportunities in the areas of:

 Connectivity – most of the small businesses and enterprises are still using broadband connections provided for homes. There is a scope for
migrating them to specialized connectivity solutions
 Value-added services – many small businesses make do with consumer services, but recognise that as businesses they ought to be looking for
more than just connectivity. According to a report, only 25% of SMEs in India have a Firewall.
 Growing role of the Web – less than half the SMEs we talked to have a website, even fewer have an Intranet, and yet these are the first steps
towards enhancing productivity both within a company and between its customers and suppliers
 Convergence –emerging convergence of voice, data and content, the internet and telephony, as well as FMC can stimulate demand within the
SME segment for more comprehensive and less disconnected standalone solutions
 Mobility – the workforce in most companies is far more mobile than it has been in the past, with connectivity required from phone, fax,
mobile, desktop, laptop, smartphone to and from the office, home, hotel, or on-the-move. This increased mobility leads to a greater mix of
communications, needing a trusted partner to manage it
 ERP and Equivalents: Everyone needs an organisation wide solution
 broader portfolio/incremental ICT sales: give them a complete portfolio and tell them stages in which they can install/implement
What can ABS do?

• Most of the small • Provide a complete • whilst they are • focus on the needs • segmenting the
enterprises are not portfolio from small and then and requirements SME market is a
aware of the which services can hang on to them of individual SMEs near-impossible
solutions they can be added along so that more rather than a task, but offering a
use with scalability business can be generic approach 'pick and mix'
• Medium size • let IT and telecom leveraged from to improve the bundle would
organization know be the growth them as they grow. overall quality of enable SMEs to
the solutions but drivers rather than the customers they feel more in
need to see ROI requirement after serve. control
growth

Advisory One stop shop/ Specific Flexible

grab growing
portal/ Vertical-wise
companies focus Bundles
consultancy mapping
Risks
 Shortage of qualified IT skills - this topic is very important for the development of the ICT economy. Lack of qualified IT profiles means reduced
adoption of IT.
 Rapid ROI is more than ever a priority for end users. They would rather not spend if ROI is not guaranteed.
 New relationships with suppliers/customers (new contract types and SLAs where the risk is increasingly assumed by the provider).
 Increasing significance of purchasing departments. Smaller companies are the ones who suffer from this. This trend drives the consolidation of
the small and mid-sized players.
 SMBs and SME companies are making efforts to improve the quality of their products and services (mainly through industrialization). They still
lack sales and marketing know-how and capabilities to successfully push their offering on the market.
 Services models are critical for certain types of clients (midmarket)
 On the other hand, the software market, which has been very dynamic for 15 years, has to deal with mass production, price strategies, evolving
business models (SaaS) and the increasing importance of Open Source.
 Small vendors are finding it more difficult to compete on this market as they do not have the same tools and resources as larger ones. Niche
specialization is a way for them to differentiate in a highly competitive market.
APPENDIX
Definition of IT Expenditure
 Personnel Expenditure
 Includes all personnel-related costs (IT salaries and other staff costs).

 Hardware Expenditure
 Amortization of all IT equipment (computers, peripherals, terminals, data communication, etc.);
 Leasing and rental payments for hardware and other equipment.

 Software and IT Services Expenditure

 Proprietary as well as open operating system and system-level software;

 Network, system, storage, and security management software for all types of
 hardware (from mainframe to PC).
 figures include only revenues from licenses and maintenance/ support. All related revenues from implementation services (consulting,
implementation/ customization, training) are booked as project services revenues.

 Other Expenditure
 Data-related telecom equipment and services (e.g. routers, leased lines, X25, etc.);
 Consumables;
 Energy;
Application Software Products Segmentation
 Application software products figures include only expenditure for application software licenses and maintenance/ support fees.

 Some companies bill on a subscription basis and do not license actual software. Such costs are included in the outsourcing/ processing
segment. Includes office automation, business applications and technical applications.
 Business applications are process-oriented applications that include horizontal applications such as financials, HRM, CRM, SCM as well as
industry-specific solutions such as LMS( ), PMS( ), HMS( ) etc.
 Technical applications include graphical software, and other technical software.

 The office automation software market is generally dominated in all segments by Microsoft with Office, including word-processing, data
spreadsheet, and presentation software. Other major productivity software applications are WordPerfect Office (Corel), for instance, as well as
opensource initiatives such as OpenOffice.org and StarOffice (SUN).
 Application software products can be either out-of-the-box solutions, such as most productivity software products and business applications
for the small office/ home office market, or more complex/ process-oriented solutions that require implementation and customizing services,
such as business applications for the mid-market and for large enterprises like ERP.
 Application software products are often sold as packaged solutions including hardware and services, e.g. implementation services. The value of
the hardware and services resold is excluded if it can be determined. All related revenues from implementation services (consulting,
implementation/ customization, training) are booked as project services revenues.