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.

Indian SMEs vulnerable to cyber attacks

The first decade of 21st century has witnessed significant and unprecedented rise in the Information & Communications Technology (ICT) sector, which has lead to the emergence of the concept of virtual marketplace.


As these days businesses are becoming more and more dependent on technology to augment growth, the speedy adoption of ICT is also going up fast. To fully realise the benefits of the digital revolution, it is a must for the users to understand the complete importance of securing sensitive information.


Currently, economies across the globe are facing crisis due to economic meltdown and it has impacted growth of businesses of all sizes. In today's world, cyber attacks are not just focussed in its approach but they are also aimed at compromising business systems and networks. Most of them aim to steal high value information and cause disruption. It is believed that with the consistent change in the digital world, the onus lies on the businesses to stay updated about the latest technology so that they don’t fall prey to these risk.


Understanding the meaning of cyber attack
Cyber crime is a term that describes criminal activity in which computers or computer networks are used as a tool, a target. Computer crime consists of unauthorised access to computer systems data changes, data destruction, theft of intellectual properly.


It is also referred to as an attempt to get access to 'key' informations like usernames, passwords, other important details in the guise of a trustworthy entity via electronic communication. Social websites, auction sites, online payment processors or IT administrators are used often to attract the users.


Cyber security and India Inc
During the past four years, India Inc has seen four fold jump in cyber attacks and hence, it is also one of the reason why Indian companies are increasingly understanding the 'true' importance of cyber security for their businesses, irrespective of the sectors they belong to. A report by the Security and Defence Agenda (SDA) and McAfee states that India is among the top five nations in the globe which are most affected by cyber crime.


Since many business organisations depend heavily on the latest Internet technologies to enhance their competitiveness within both the domestic and international markets, the issue of cyber security has started to worry many.
Analysts feel that since Internet has altogether given a new definition to communication, therefore it won’t be incorrect to say that the second name of communication is now Internet. Although, Internet brings many benefits with speed, but questions have often been raised about its misuse and spams.
Meanwhile, according to Trend Micro quarterly security roundup report, India has emerged as the top spam-sending nation in the March quarter of 2012. It contributed to nearly 20% of the world’s overall spam volume followed by Indonesia at 13%, South Korea at 12% and Russia at 10%.


SMEs too faced with cyber attacks
SMEs, mainly, are vulnerable to cyber attacks since they generally have smaller customer base along with limited product lines as compared to the MNCs.


Although, SMEs are considered as an important economic force, they often have poor IT security infrastructure since they witness problems such as absence of resources, IT infrastructure and skilled manpower. The ever-increasing threat of cyber attack has brought the weakness of SMEs to light and made them vulnerable to these threats.


Today, the cyber attacks are aimed at businesses primarily with emphasis to steal high value information and also causing harm.


Meanwhile, a Symantec survey said that the advanced targeted cyber attacks are expanding their foothold beyond the more usual domain of large organisations, with 50% targeting SMEs during last year.
The survey – India findings of its Internet Security Threat Report –from Symantec threw light on various issues. Few of the important findings in the report comprise of:


- Symantec blocked an overall of more than 5.5-billion malware attacks during 2011, witnessing rise of 81% jump as compared to 2010.


- The web-based attacks saw considerable appreciation by 36% with more than 4,500 new attacks every day.


- 50% of the aimed attacks were for firms with lower than 2,500 employees and just 42% of targeted attacks were for the CEOs or senior managers.
This survey proves that it is very crucial that India Inc, especially SMEs, to have ample knowledge about the potential cyber threats.


Symantec also said that the threat of cyber attacks are on the rise in Indian cities like Bhubaneswar, Surat, Cochin, Jaipur, Vishakhapatnam and Indore.


Security breaches costly affair
Analysts believe that the average cost of the worst IT information security breaches in small companies is not a negligible amount. It is shocking to find out that majority of SMEs don’t have contingency plans to counter cyber attacks or even required security level to take measures against it.


Reports suggest that during the 2010-2011 period, India Inc clocked loss of nearly Rs1,000 crore due to data theft.


Moreover, the rising concern for cyber safety needs to act as a warning signal for the small businesses. While cyber attacks on SMEs may not impact national security, but they can have devastating effect on those whose livelihood depends on the digital operations of SMEs.


Security tips on how to protect SMEs against both online and offline risks
- SMEs should ensure that they follow 'need-to-know' policy for its employees. For instance, if data is stored on a central server, limit the count of people who have access to important files. It will prove beneficial at the time of both deliberate and accidental data loss.


- As SMEs often lack technical expertise, seeking professional security advice is an excellent option.


- Create specific norms about email policy as it often comes with considerable amount of risks. Employees need to be informed about the importance of online security issues on regular basis.


- Creation of back up files is a must. It won’t impact regular and daily business activities even at the time of security breach incident.


Meanwhile, a recent study from Microsoft said that Indian SMEs trust cloud security more, since most of them feel it offered significantly higher levels of security. Close to 64% of Indian companies have seen improved security levels after migrating to cloud and 52% claimed that they spend less time worrying about the threat of cyber attacks.


Centre keen to eradicate cyber attacks from India
Recently, Union Home Ministry displayed keenness to work with the National Association of Software and Services Companies (NASSCOM) in the area of cyber crime, as per Home Minister P Chidambaram. According to Centre, every year cyber crime in India is rising at 50% rate. In the past five years, nearly 9,000 Indian websites have been hacked.


NASSCOM and Data Security Council of India (DSCI) want cyber forensic labs to come up across India.


Conclusion
It is high time for the SMEs to develop an Internet use policy to protect their data. It could include policy that permits the employees to know correctly about their responsibilities when they are surfing the web during working hours. Moreover, small changes through awareness and best practices can lead to safe and secured business for SMEs.

The bottom line is that the threats from cyber attacks should not be avoided and cutting costs by not installing data protection measures is not an option. So, staying prepared with such technology will end the stress of losing personal information.