SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

SMEs can make their key differentiator

By M H Ahssan

The rapid growth of the small and medium enterprises has led to an increase in the demand for IT solutions

The small and medium enterprises (SMEs) have become a key focus area for a majority of IT service providers who want to tap the growth potential of this market. A report by AMI Partners early this year has revealed that the SMEs in the country are likely to spend $9.7 billion on IT this year, an increase of 22% over the previous year. The vibrant and dynamic growth of the SME segment has also made a significant contribution to the GDP, industrial production and exports.

If we closely analyse, SMEs have complex business scenarios irrespective of their size. One of the most challenging tasks of the SMEs is to lower the total cost of operations and keep pace with market issues and developments. For most of the SMEs, monitoring global issues and dealing with complexities such as multiple currencies, changing demands and the continuous customer pressure on achieving scalable cost reductions.

Key Trends
Studies reveal that SMEs which outsource their IT infrastructure are utilising the technology resources that bring in additional top-line revenues while improving bottom-line results. SMEs are most likely to use cutting-edge technologies and approaches such as Software as a Service (SaaS). Analysts are of the opinion that the increase in use of hosted infrastructure models is enabling smaller companies to compete on an equal IT footing with bigger enterprises which have already made substantial investments.

SMEs are choosing a hosted infrastructure model as it provides organisations with state-of-the-art software solutions that can be implemented, while avoiding the large infrastructure costs and eliminating the recurring administrative resources as in traditional on-premise applications. The other area where the SMEs are focusing on is the regulatory compliances. Success for most of the small and midsized businesses depends a lot on the IT. Small companies cannot afford to make inappropriate investments in IT as a failure may also endanger both the profitability and the regulatory compliance.

Following are the key SME segments, their business requirements and the crucial role played by IT in their balance sheets.

Discrete Manufacturing (Engineering)
Discrete manufacturing companies make countable products that go directly to businesses and consumers, or components that are used by other manufacturers. The industry is often characterised by individual or separate units of production. Significant requirements in this segment are bills of material estimation, MRP runs, inventory management and order-wise profitability reports.

Some of the key challenges in the discrete manufacturing industry include customer order fulfilment, controlling and monitoring Work-In-Progress (WIP) of several work-orders simultaneously, periodic assessment and visibility of workorder profitability, getting real time information on WIP status and ensuring targeted delivery time.

The above challenges could be immediately answered by an implementation of an enterprise resource planning (ERP) solution. The ERP solution shall be able to effectively model the organisation structure, the flow of material and documents across functions. The ERP solution would enable the customer to have clear visibility of the different forms of the stock and the amount of working capital locked into different stages of production, along with the availability of the finished goods across warehouses and stocking points.

Thus the centralised data warehousing would lead to better monitoring and control of the data as well as easy retrieval of the same. The user friendly software modules would help in report generation and business analytics support different kinds of reports and give the management single window access to financial, manufacturing, logistics, supply chain and sales in a consolidated manner.

Textile Industry
The textile industry is one of the earliest to come into existence in India, and accounts for 14% of the total industrial production. Its contribution to the nation's exports is nearly 30% and it is the second largest employment generator after agriculture.

However, the industry has to address the challenges arising from fluctuations of consumer demands, high setup cost with respect to capital cost, the seasonal variation of natural raw materials for production, sourcing of the synthetic raw material pegged to the prices of petro products, multiple production stages and improper management of quality.

The critical problems of supply chain and integrated view of multiple functions could be handled by ERP implementation as it supports customer and supplier portals. The functional features of multiple warehousing facility and ability of the system to capture the lot and serial number of the inventory, allows the customer to track the flow of the inventory across multiple production stages. The solution helps to streamline the manufacturing process with the modules which have inbuilt features like planning and scheduling, shop floor execution, work order management.

Manufacturing module also supports businesses that have diverse planning policies like made to order, made to stock, and forecast to order. The purchase module, which has got features like supplier management, request for orders, purchase operations, subcontracting and vendor rating manages the full spectrum of sourcing activities, achieves efficient supplier management resulting in enhanced supply chain planning, thus leading to better management of operations.

The software also offers functionalities like business analytics and reports which helps manufacturers in analysing data and getting the overall view of respective functions. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Trading and Services
In the trading and services segment SMEs should have proper planning and maintenance of stock at different stocking points and manage the business with multiple billing and collections points across multiple customers.

Consolidated order planning and execution, with support for both centralised and de-centralised location management of either procurement or sales of the goods, tracking of materials intransit, proper warehouse management, stock valuation (actual cost) and managing sample sales are some of the critical requirements of this industry. The system also effectively helps the credit and aging management of the customers who are spread across locations. In short, the geographical spread is dramatically reduced through a virtualisation by the system while modelling the different locations. Hence, there is increased effective control on the overall operations, while individual locations have being provided adequate freedom to exercise within their delegated power.

Here, too, ERP can play an important role in streamlining the functionality of trading business. For example, ERP application helps in handling the pending receipts report based on the order date and in-transit report which would enable proper order, execution and planning in multiple locations. This enables faster deployment and quick and improved decision. It helps to streamline the business operations and facilitates multi location billing. The warehouses can be managed in a much more efficient manner. The warehouses can be divided into zones and bins that enable proper management of inventory. This would help in centralisation of the data that are available.

The application helps in maintaining an account of the materials that are in transit as well as of the materials that are lost in transit. It helps the business by providing visibility of the available stocks in different warehouses. It offers inbuilt functionalities like business analytics and reports which helps the trading houses in analysing data and getting the overall view of various functions. As the contemporary software packages are web architected they are useful for companies which are located at multiple locations. It also gives the management access to financial, manufacturing, logistics, supply chain and sales information in a consolidated manner, and thus equips them to make quick and informed business decisions.

Most of the challenges faced by the various SME industries are common in nature–lack of accessibility of real time information, inefficiency of supply chain management and expensive IT solutions. In the current scenario, for an SME to sustain in the market and remain successful, it has to work meticulously towards streamlining its business processes. And as discussed above the business process needs to be innovative and efficient enough to adapt to the market and business requirements. These integrated processes need not only include departments but also partners, suppliers and customers. And it can only be attained by using information technology which can support and drive business objectives. Consequently, this also enables to innovate and respond faster and adapt to the globally changing business conditions – a must for SMEs.

To conclude, the growth and evolution of the SME sector has led to an increase in demand for IT solutions. Many smaller companies are not satisfied with their existing disparate solutions and legacy systems and are showing a keen interest in IT solutions which provide maximum business benefits. Many of the CIOs in the SME sector are of the opinion that hosted IT services and Software as a Service (SaaS) would facilitate them to work more, spend less and gain remarkable benefits by concentrating on their businesses, rather than on managing IT. Last but not the least, this model will facilitate management of businesses to handle scale complexities better, and thus endow them with the foundation for innovation.

Do You Have A Real Estate Strategy?

By Sarah Williams

The importance of a strategic real estate plan to a successful business plan is no Mickey Mouse affair. Walt Disney needed to learn that lesson only once when he set out to create what have since become the world's most successful theme parks. Just before World War II, Disney envisioned an eight-acre amusement park. When his plans were delayed by the war, he used the time to expand his dream, ultimately purchasing a 160-acre tract of orange groves in Anaheim, Calif. There, he built Disneyland.

By any standard, the park has been a success. At the time, Disney's decision to acquire a larger tract of land than he thought he would need was seen as extravagant. And yet even that seeming extravagance proved inadequate. Shortly after the park's opening day, Disney predicted, "We're gonna kick ourselves for not buying everything within a radius of 10 miles around here."

Decades later, while planning for Disney World in Orlando, he was determined not to make the mistake he'd made in California. In Florida, he developed a long-term master plan for future growth, acquiring a land holding that rivals many midsize cities. The result has been decades of continual expansion of Disney World - driven by a sound, strategic real estate plan with flexibility that is still in sync with the company's overall business vision.

Few of us will ever be challenged to develop a master plan of this scale. But all businesses rely on some form of real estate to execute their business plans, whether it's a one-person consultancy in a shared office space, a multimillion-dollar manufacturer, or behemoths like Wal-Mart or McDonald's. As Disney learned in Anaheim, the lack of a fully developed strategic real estate plan can limit a company's ability to respond to future opportunities and challenges.

Today, executives who have the responsibility of aligning their corporate real estate strategies with overall business plans see the need for more real estate assets on the balance sheet. Yet, current business trends often dictate that real estate assets consume less of the company's capital.

However, some firms do plan larger real estate investments. Today, 30 percent or more of the value of American corporate holdings currently is allocated to real estate. A new study by Ernst & Young LLP shows that 42 percent of the businesses surveyed plan to increase the amount of real estate they occupy in the next 12 months. Further, 65 percent plan to increase their investment in real estate. Whether a firm is planning to increase or decrease its real estate investment, all firms share the same fundamental mandate: real estate investments must be tied strategically to the business plan.

Who Will Take the Lead?
Though it may represent a substantial part of the balance sheet - and often one third of a corporation's assets - real estate planning receives a disproportionately lower amount of staffing, budgeting, and other resources when compared with other corporate functions. Most manufacturing companies, for example, have in-house expertise in engineering, financial management, communications, and human resources. Some larger companies have substantial in-house real estate planning and management expertise. But it's rare for small to midsize companies to have any in-house real estate capability.

Perhaps this state of affairs occurs at many firms because real estate is not a discipline through which decisions are passed routinely. Because of that, real estate planning frequently has no in-house champion, making it all the more difficult to assemble the necessary resources when real estate decision-making is critical. With a global market and ever-more sophisticated and complex business environments, it's apparent to most that the days have passed when key corporate real estate decisions could be made on an ad-hoc basis by people who are skilled in other areas but unprepared to develop strategic approaches to real estate.

The low priority that strategic real estate planning too often receives is especially troublesome given some recent events. For example, prior to September 11, major corporations generally considered it sound practice to concentrate corporate offices in a central location. After all, this tends to maximize efficiency. In the wake of that day's devastation, however, prevailing wisdom has challenged this monolithic, all-in-one-place approach.

Dispersal to multiple locations that are linked by technology dominates the current debate on how best to locate corporate operations. To illustrate the point, in the week following September 11, AT&T reported a 20-percent increase in its teleconferencing business. Similarly, a Prudential videoconferencing facility that rents to the public doubled business that week.

Manufacturers once distributed their inventories to small warehouse facilities in many locations. Now, so-called super-regional distribution centers and just-in-time through-docking facilities - which take products in the front door and push them almost immediately out the back - are best serving changing business needs. Add to that the weaker economy and it is clear that companies need more flexibility than ever to shrink or grow their real estate assets in lock-step with the demands of the marketplace.

Implementation
At this point, some readers of Area Development might think, "Tell me something I don't know!" Every corporate real estate executive, CFO, or CEO at least gives lip service to the idea that strategic real estate planning is critical to business success. In much the same way, every football coach knows that a team must run and block well, that quarterbacks need good arms, and that receivers need good hands. Just about everyone knows what it takes to be successful. Yet some teams win consistently and some almost never do. The winners are able to move from knowledge to execution.

Typically, thinking about real estate is limited to factors such as how a facility contributes to creating a product, how it affects the supply chain, whether or not it contributes to client intimacy, and how it contributes to employee morale and satisfaction. But real estate can affect many more factors that directly impact the bottom line. Good or bad real estate choices invariably have an impact on recruitment, training, client relations, corporate image, efficiency of workflow, the ability to deploy new technologies, and the return on public or private equity investments in a company.

Because real estate decisions can affect so many things, truly strategic real estate planning is linked closely to the business plan in realistic and practical ways. Assembling a complex real estate plan is precisely that - a complex undertaking with many parts that must be integrated seamlessly to form a coherent picture. Yet far too many real estate plans fail to account for all of the pieces of the puzzle.

For example, if your company were to consider buying the "perfect" building today, how perfect will it be when the size of your business doubles in accordance with your business plan? Would it be smarter to lease space in a corporate-center environment where the landlord has ample motivation to accommodate your expansion requirements? Would a stand-alone building be the only way to project the high-end image that's also demanded by your business plan? Or would a stand-alone facility belie your market position as the value provider of your product or service?

The following questions deserve consideration in any such analysis:

- Should you be deploying any capital to bricks and mortar when your business plan calls for capital investments in other areas of your company?

- Would that capital provide a higher return if it were used to support the purchase of new capital equipment, increase marketing, or fund other capital requirements?

- Are your facilities geographically aligned with your targeted growth markets?

- Are you considering the locations, technologies, and amenities that are required to attract and keep the kind of workers you need?

- Conversely, how will your real estate plan accommodate an unexpected downturn in sales?

Real Life Real Estate
These and other questions were among the challenges considered recently by executives at Philips Communication, Security & Imaging, Inc., which is now pending acquisition by German-based Bosch GmbH. The Communications, Security & Imaging unit - currently a division of Philips North America Corp. - designs, manufactures, and supports communications and security products and systems, including closed-circuit video surveillance, paging, and public-address systems. The company's U.S. headquarters were housed in an antiquated facility that was inherited when the current parent company purchased the firm. The executive team agreed that the facility did not support the business strategy in many ways.

The building had been retrofitted so many times that materials no longer flowed through the facility efficiently and departments that needed to relate physically could not do so. The building was not attractive, a factor that had real consequences for a firm known in its industry as a technology leader. Also, the building didn't offer a pleasant working environment, which had a profound effect on employee morale and productivity. Further, the facility was leased from a landlord who didn't share the firm's desire to make the infrastructure improvements that were sorely needed, such as sophisticated telecommunications systems, high-speed Internet access, and HVAC improvements. This was a straightforward case of a company's real estate being out of sync with its business planning.

Philips executives reached a number of conclusions. First, they did not have the in-house expertise to assemble their complex real estate puzzle, and, second, they did not want to take on the overhead of a full-time, in-house real estate planning and development team.

So Philips hired the expertise it needed. The company's requirements included locating the new facility within close proximity to the existing facility and avoiding any disruption to the commuting patterns of the current work force - which would reduce the need for a large recruitment and training effort. Philips wanted its manufacturing and distribution facilities to be connected to its office facilities, yet also saw the advantage of having some separation between them. Company executives also wanted a large amount of office space outfitted with the high-end look and sensibility they needed to support their position in the marketplace. Finally, despite the highly customized requirements they had, they did not want to invest their assets in owning a facility.

The firm that Philips chose was a full-service real estate company that was able to locate and purchase the real estate; design, specify, and handle permits; build the facility; and create a lease structure that was attractive both to Philips and to the real estate company, which would also serve as Philips' lessor. And, because the real estate firm specialized in development projects within the same geographic areas in which it operated, it also helped Philips take advantage of special state-level funding programs that provided incentives for companies to expand or retain jobs in the state.

Honest Evaluation
It's useful to look behind the scenes at decisions that were made in the Philips deal. The facility that Philips needed was unique. For the real estate company, it would not have been economically sound to build so much office space in a manufacturing facility - if the tenant were to leave, finding a replacement company with similar requirements would be nearly impossible.

In order to serve Philips' needs and also make it economically feasible for the developer and facility owner, two buildings were designed - one for offices and one for manufacturing and distribution. The two were connected by an umbilical structure that could be removed if later required. This met Philips' needs and protected the investment of the real estate company.

How can you develop a sound real estate strategy for your business? The truth is, you probably can't do it alone. The first step is to honestly, rigorously, and objectively evaluate whether you have the in-house expertise required to tackle such a mission-critical task. If the answer is no, your first step must be to determine how to fill that need, either by building the capability in-house or engaging the necessary outside help.

Just as lawyers, accountants, and other consultants help in crafting a business's strategy, qualified real estate professionals who contribute their knowledge and guidance can yield huge dividends for an organization.

Developing any important strategy that will influence the future of your business is tough and complicated work. Sometimes, it can seem overwhelmingly complex. But as Disney was fond of saying, "It's kind of fun to do the impossible."

Focusing On The Bigger Picture

How can entrepreneurs keep the focus on the bigger picture without getting bogged down by the day-to-day activities of running a business?

Film making and start-ups are wonderfully similar. In both, one is constantly trying to imagine the big picture while assembling elements of detail. In both, there are moments of cheer and there are ones of despair. Timelines of start-ups are like a play in light and shadow. Film making follows a script, whereas entrepreneurial ventures have business plans, only scripted one detail at a time. The constant challenge of keeping the big picture and small detail together is common to both.

So while I am not qualified to comment on film making, my journey of work and life has put me face-to-face with some big-picture-tiny-detail challenges. Have to confess, most could have been handled better or differently in hindsight. So, here I am, sharing some learnings from my ‘eye on the big picture and hands on the small detail’ adventures.

Rule 1 for entrepreneurs running a business: Play
You don’t have to start out as an expert. You just have to start. Start-ups are like that. They are a giant experiment in taking things one step at a time, while replaying the big dream track in your mind all day. Play keeping in mind who you are in this scenario. Are you the dreamer, the pied piper, the work horse at work – irrespective of anything else, this is your project, with a large piece of who you are embeded in it. Once you are at it, what works for you will begin to sort itself out before you. 

Rule 2 for entrepreneurs running a business: Purpose
Internalize your purpose. Something made you start-up. Something got you excited. Something made you sit up and take notice. Revisit that moment, what was the defining vision of that time, what prompted the enthusiasm? The conversation you had with yourself while setting out can be a great radar for your entrepreneurial journey. Revisit your Big Hairy Audacious Goal (BiHAG) often. Whatever takes you there – solitude, music, conversing with a mentor, or just reopening some draft documents you made early on. Your purpose is your GPS to the big picture of what you wanted in the first place. Keep that connection on.

Rule 3 for entrepreneurs running a business: Pass on
Pass on the tasks. Every BiHAG is a list of numerous small tasks. Get people to help you every step of the way. You are the owner of your vision – share your execution, and your vision will seep down naturally. But you need help. Everyone does, and lots. Learning to get the right help is the single most important entrepreneurial skill for running a business.

In film making parlance, every director has a favourite shot and angle. Keep your trademark shot but get others to fill in on the ones that don’t come naturally to you. Clarity of personal thought and ability to articulate detail are twin skills, every entrepreneur could be working on constantly.

Rule 4 for entrepreneurs running a business: Pay no attention
Much like this article, there are a million others, strutting the jargon and haloing the pundits. Feel free to ignore. Play by your own rules. Every small task at hand is one of the million things you will accomplish along the way. Don’t let someone else’s judgment (not facts) eclipse what you clearly know about a task.

Rule 5 for entrepreneurs running a business: Play to your strengths
You got some, which no one else has got! Use them. That is your first and most important competitive advantage. Awareness of your shortcomings is great but you will still perform on the back of what you know best. As an entrepreneur, you are responsible for setting the DNA of your business. A volley of small decisions, including some really simple ones, will define the tone of your company and its place in the market. Feeding it with your authentic self is a first step towards building a great company.

Rule 6 for entrepreneurs running a business: Partner
Find people who can align with your vision or can help you putting Operations into place. Great partners can see your dream and replay it to you. They also pitch in when it comes to finding the missing details. Some of these partners – think vendors, agencies, freelancers – will play a core role in completing the picture, with their version of detail.

Rule 7 for entrepreneurs running a business: Pivot
Change often. Start-ups and movies need retakes. It is a tiring, frustrating process but a great body of work, needs great effort. Change in the small ‘takes’ need not impact the vision of the big picture always. Some of them will do. Make change your friend. 

Rule 8 for entrepreneurs running a business: Prepare
Prepare to succeed but be ready for failure. That is the true honour of being an entrepreneur. Do what you do best but it may still not work, they way you had envisioned. It is alright to fail. There is always a next project, the next road to be taken. More so, ask yourself “If your company went out of business tomorrow, who would miss you and why?”  (Jim Collins) and chances are you will revisit why you were at it in the first place.