Tech savvy SMEs to lead from front

The increasing awareness and adoption of new production and processing technologies by the small and medium enterprise (SME) segment is likely to account for more than one third contribution in the total information technology (IT) spending of India by 2015. This had been revealed by an advisory firm Zinnov, in its study titled 'Indian SMB ICT Adoption Insights' earlier this year. Usage of technology has been proven revolutionary in modern businesses as they result in the structural transformation of the enterprises.

SMEs are considered as engines to economic growth of a country. Adoption of technology by them will not only promote their businesses but will also create new opportunities for employment thereby mounting country’s economy further. Moreover, the technology usage will not only make them spirited, but will also build their confidence to produce high added value products and develop competitive strategies within a business, regionally and internationally. Now-a-days Internet presence has become pre-requisite for the growth of the global businesses.

SMEs across the world are using Internet can as an effective business channel. Indian SMEs are also using Internet as a medium to grow their businesses. The firms use Internet to enhance internal and external communication, expansion of markets by breaking geographical boundaries, export at low costs and provide support to customers. Furthermore, Internet usage also provides them to triumph over the disadvantage of being small in size to reach customers especially in international markets.

The advanced SMEs are spending heavily on tools like PCs, Internet and website in a view to get prepared for the growing competition. Zinnov's study on the present state of IT adoption in the SME segment in India pointed out that out of current 50 million SMBs present in the country, 10 million small and medium businessmen are technology-ready. The trend of IT adoption by the Indian SMEs is expected to undergo upward trend in future.

The study offers a thorough analysis of the different opportunities; challenges and available scope being connected to IT spending and technology adoption in the sector which may take SMEs' contribution to over one third of the total domestic IT spend by 2015. According to the study, the entire domestic IT spending is likely to increase at a CAGR of 12 per cent and may cross $36-billion mark by 2015. In the same fashion, SMEs will grow at a CAGR of 15 per cent and will contribute $15 billion by 2015. The 10 million techno-ready SMEs have put an end to the traditional pen & paper business culture and preferred the adoption of technology, citing business growth. The study estimated that currently 5 lakh Indian SMEs have websites and 2 million SMEs have Internet access.

In addition, SMEs' progressive interest in the adoption of PCs ensures the growth of the sector. Currently, 4 million Indian SMEs are using PCs which is likely to increase at 30 per cent from 2011 to 2015. Although, the SMEs are acknowledging the power of technology and realising that technology adoption is essential to stay competitive in a fast paced global scenario, but there are some challenges which are required to be eliminated in order to uphold the growth rate. The main roadblocks faced by the Indian SMEs comprise insufficient IT knowledge, finances and affordability, accessibility, ill-defined return on investments, dearer technical support and poor physical infrastructure. There is a need that government and industry should come together and address these challenges to drive IT adoption in the manufacturing sector. According to a latest report generated by International Data Corporation (IDC) - India IT Market Overview Report – 2012, the domestic IT spending is expected to grow by 16.3 percent by the end of 2012 notwithstanding the factors like unpredictable economy, pricing pressure and falling rupee.

India is witnessing a phenomenal increase in SME spending on IT. 38% of Enterprise IT spending in 2011 was by the SME segment. The proportion is expected to grow to 43% by 2015. Moreover, the overall IT market is likely to increase to 43.57 billion USD in 2012, up from 37.46 billion USD in 2011. Despite lesser than expected GDP growth figures during the last fiscal, India still commands a high growth rate, following China among the BRIC countries. In order to revolutionise the SME sector with the adoption of technologies, the government should come forth with new measures like additional investment in information technology, e-business and new business models in order to provide friendly environment to support and help SMEs to better use information technology and increase the countries competitiveness, productivity and growth.

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.