SME collaborations open doors for untapped opportunities

Indian small and medium enterprises (SMEs) are poised to witness fast growth in the coming decade. If the predictions of the analysts are to be believed, the Indian small enterprises offer immense scope to push growth that will lead to an all round development of the country's economy despite the presence of various grey areas.



 

The Indian entrepreneurs are of the opinion that the availability of infrastructure and other aids assume significance as they can enhance the growth of small businesses or start up players.

 

 

Although, Centre has been taking concerted efforts, India is still reeling under the pressure of different concerns and constraints in the path of growth and development of small businesses. It is not practically possible for government to clear the obstacles instantly as it is also not feasible for any SME to solve these problems single-handedly. The only solution that is workable is 'Collaboration or Partnerships'.

 

 

Why Indian companies need to focus on 'collaborations'
 

As Indian economy has decided to continue its growth at a good speed in the coming decade, in this situation the SMEs will also aim to grow by bringing improvement in the productivity levels and business processes. To attain these goals, it is important for the small businesses to realise the importance of incorporating technology-driven collaboration among them.

 

 

With the onset of economic slowdown, SMEs should eye for technological collaboration since it is the primary ingredient for improving productivity. The small enterprises feel that it can play the role of an efficient tool that can increase the financial sustainability of enterprises effectively.

 

 

In the past few years, voice mails, video conferencing, mobile file sharing applications, online presentations are some of the off-shoots of partnerships.

 

 

What approach SMEs should adopt
 

The most important factor which needs to be kept in mind while exploring the potential of 'partnership' is to give an appropriate direction to the approach for undertaking this practice. Prominent areas and activities where partnership can lower costs besides increasing productivity should be stressed upon from time to time.

 

 

Proper research needs to be done for strengthening ties that will be mutually benefit the partners. The most important elements of collaboration is the partners' willingness. The SMEs should keep these factors in mind while working out 'partnerships'. Moreover, the international trends in technology and logistics partnerships can act as a parameter for deciding the strategies for collaboration among the SMEs.

 

 

How 'two-way collaboration' can be an option
 

The common aspect of any collaboration is that it should follow a 'two-way' approach since it should be inside as well as outside the establishment. In other words, it means that the collaboration should be both intra-enterprise level and inter-enterprise level.

 

 

This brings the importance of 'networking' for employees to the fore front as it is significant for efficient cooperation among the various streams inside the organisation for smoother and better operations. Communications and mobility are the key technology areas that enjoy tremendous potential for boosting the concept of collaboration inside any organisation, thus offering freedom to the employees.

 

 

What are the possible areas of collaboration
 

Today, new areas are opening regularly where scope of partnership among small businesses can be found. In most of the technology driven SMEs, the scope of a tie up is greater since new technology has potential to replace the older ones on regular basis. Few of the key factors which need to be focussed upon while inking collaboration are as follows -

 

 

-  Space

The rising commercial rentals across the globe have forced the small businesses to join hands in developing collaborative business spaces that are in favor of the participating collaborators. Common spaces means lower spending. 

 

 

-  Marketing Media

 

Marketing and publicity are few of the concerned areas for the small businesses, mainly the start ups as the over head expenditure often pose as a problem. Collaboration is possible in this areas in regard to the sharing common agencies and events for the promotion of multiple businesses. This concept has worked for the small businesses in US and Europe during the economic slowdown and can prove helpful for the Indian SMEs too.

 

-  Technology

 

Although, there are growing concerns over the security of information in cloud computing, but it is believed to be the most efficient partnership platform that many SMEs are benefiting from. The technological partnership are taking various forms such as sharing of knowledge, information, computational systems and online platforms for marketing and branding.

 

-  Human Resources
It is possible for hiring few of the professionals on part-time or temporary basis which will help in bringing down the expenses. 

 

 

 

-  Logistics
Over the years, it has been found the price of transportation, sharing and leasing equipment act as key expenditures for SMEs. This is where collaboration gains prominence as it helps in lowering the costs.

 

 

Understanding the benefits of collaboration
 

Analysts feel that collaboration among SMEs is beneficial for everyone engaged in the arrangement. The direct benefits out of 'partnership among SMEs' is endless. Few of the obvious benefits of teaming up are 

 

 

 

-  Space sharing

Sharing of space can bring down cost while the collaborating ventures can post good results. For instance, a petrol pump can house a fast food joint in its premise and it can be beneficial for both the partners. 

 

 

 

-  Platform for mutual support

The like-minded businessmen can offer physical, mental and financial support to each other whenever the need comes up. Regular meetings, online forums and also business communities can act as morale booster apart from motivating the members as well. 

 

 

 

- Networking

In today's business world, everything and everybody depends hugely on effective networking. Partnership among SMEs offer scope to strengthen network and also benefit the participating members.

 

 

 

- Ownership

Fractional partnership assume significance as many SMEs need expensive equipment but it can be afforded by just few. Fractional ownership allows it to be used on time sharing basis. For instance, it is a common practice that many SMEs jointly purchase a helicopter in the west and this trend can be implemented in India as well. 

 

 

 

-  Opportunities for marketing and sales

The participants can access each others client base with the help of mutual cooperation. It has been found that shared marketing platforms can prove helpful in lowering costs considerably.

 

 

 

-  Importance of cost sharing

The collaborating small businesses have potential to raise the scale of operations by sharing costs and it increases competitiveness with the bigger players. Although, the efforts taken by both the parties are not of humongous proportion but the operations grow manifold with the help of partnership.

 

 

 

What Research tells us

 

According to a survey of 300 business leaders carried out by Deloitte Consulting, 75% of the surveyed gave priority to partnerships. Those with linked partners and suppliers to internal business processes posted 70% improved profitability as compared to players that did not opt for collaborations. 45% of the respondents stated that they are worried about the complexity of implementing collaborative tools.

 

 

Conclusion
 

It is becoming increasingly important in the present time for the small businesses to maintain their competitive edge and also relevance in the market where the big players are eyeing to tap every available opportunity.

 

 

As competition continues to remain as the top concern for the entrepreneurs, collaborative efforts have potential to effectively help every business attain its target despite the presence of constraints such as finance, resources and economic crisis. It is a common belief that the collaborative power can prove helpful for the creation of platforms that is not within the reach of a specific unit.

 

 

For the SMEs, the creation of partnerships and business relationships are gaining prominence due to the globalisation of the market. The MNCs are infusing capital in strategic procurement programmes to bring down their supply bases apart from stressing on risen expenditure with the help of strategic partners.