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This study reflects the Indian SMBs’ (Companies between 10 to 1000 employees) behavior and inclination to adopt ICT thereby highlighting some of the key factors involved in ICT adoption. This study will help product/service providers to understand better, develop, market and sell IT products/services to the small and medium market and hence improve their ability to link value of their product/services to the specific SMB audience.
Citation preview
2014
This study reflects the Indian SMBs’ (Companies between 10 to 1000 employees) behavior and inclination to adopt ICT thereby highlighting some of the key factors involved
in ICT adoption. This study will help product/service providers to understand better, develop, market and sell
IT products/services to the small and medium market and hence improve their ability to link value of their
product/services to the specific SMB audience
Understanding Indian SMB behavior towards ICT adoption
1400 SMBs
100 IT Decision Makers
40 Cities
More Info: [email protected] [email protected]
Contact: 08061341600,+91-9845213700Visit : www.researchfox.com
01
Contents
Intr
oduc
tion
Exec
utiv
e Su
mm
ary
Mar
ket V
iew
Research OverviewPurpose and Scope
Report Description
Key Take-Aways
Research MethodologyOur Approach
Methodology
Overall Framework Survey Participant Profile
Forecast Assump-tions
SMB Market
Markets Covered
Segment Definition
Industry Trends
ICT Awareness Among Indian SMBs
ICT Adoption Among Indian SMBs
ICT Usage Among Indian SMBs
09
10
11
13
14
16
19
22
28
36
Abstract
Overall Indian SMB IT Market Size
44
Market Ecosystem
Changing IT Land-scape & Market scenario
Value Chain Analysis
Market Dynamics
Drivers - Internal & ExternalBy Age of CompanyBy VerticalsBy Ownership GenerationBy Revenue SizeBy Employee SizeBy Growth of the Company Drivers for cloud Adoption
InhibitorsBy Age of CompanyBy VerticalsBy Ownership Generation
46
48
50
51
57
585960
616263
64
65676869
By Revenue SizeBy Employee SizeBy Growth of the CompanyBarriers - Cloud Adoption
Major Pain Points & ICT AdoptionOpportunitiesBy Age of CompanyBy VerticalsBy Ownership GenerationBy Revenue SizeBy Employee SizeBy Growth of the Company
Key Influencers
Market Share Analysis
Perceived Benefits of ICT Adoption
707172
73
74
747677
787980
81
87
02
Buyi
ng B
ehav
iour
Buying Decision Cycle
Preference of Accessing the Software
Purchase Trends
Preferred Mode of Payment
Factors Affecting the Buying DecisionBy Age of CompanyBy VerticalsBy Ownership GenerationBy Revenue SizeBy Employee SizeBy Growth Rate
90
92
98
104
106
106107108
109110111
SMB
ICT
: M
arke
t Siz
e &
For
ecas
t by
Sale
s
By Cloud
By Verticals
ManufacturingOverviewCase Study
ServicesOverviewCase Study
113
114
117
RetailOverviewCase Study
EducationOverviewCase Study
119
121
By Age of CompanyBy VerticalsBy Ownership GenerationBy Revenue SizeBy Employee SizeBy Growth Rate
126127128
129130131
Pote
ntia
l Are
as o
f IC
T D
eplo
ymen
t in
SMBs
Contents
03
28
List of Tables
Table1: ResearchFox’s SMB Segmentation
Table 2: India Govt.’s SMB Segmen-tation
Table 3: EU’s SMB Segmentation
Table 4: ResearchFox’s SMB Segmentation
Table 5: IT Spend & Forecast
Exhibit 1: Framework for ICT adop-tionExhibit 2: Survey Participant ProfileExhibit 3: Maturity Level of IT adop-tionExhibit 4: ICT Awareness Among Indian SMBsExhibit 4.1: ICT Awareness Among Indian SMBs by age of the companyExhibit 4.2 : ICT Awareness Among Indian SMBs by verticalsExhibit 4.3: ICT Awareness Among Indian SMBs by generation owner-shipExhibit 4.4: ICT Awareness Among Indian SMBs by revenue sizeExhibit 4.5: ICT Awareness Among Indian SMBs by employee sizeExhibit 4.6: ICT Awareness Among Indian SMBs by growth rateExhibit 5: ICT Deployment Exhibit 5.1: ICT Deployment Among Indian SMBs by age of the companyExhibit 5.2: ICT Deployment Among Indian SMBs by verticals
Exhibit 5.3: ICT Deployment Among Indian SMBs by generation owner-shipExhibit 5.4: ICT Deployment Among Indian SMBs by revenue sizeExhibit 5.5: ICT Deployment Among Indian SMBs by employee sizeExhibit 5.6: ICT Deployment Among Indian SMBs by growth rateExhibit 6: ICT Usage Among Indian SMBsExhibit 6.1: ICT Usage Among Indian SMBs by age of the company
Exhibit 6.2: ICT Usage Among Indian SMBs by verticalsExhibit 6.3: ICT Usage Among Indian SMBs by generation owner-shipExhibit 6.4: ICT Usage Among Indian SMBs by revenue sizeExhibit 6.5: ICT Usage Among Indian SMBs by employee sizeExhibit 6.6: ICT Usage Among Indian SMBs by growth rateExhibit 7.1: Market Ecosystem – Segment DefinitionsExhibit 7.2: Changing IT landscape and Market scenarioExhibit 7.3: Value Chain AnalysisExhibit 8: Top 3 ICT adoption driversExhibit 8.1: Mechanism of ICT Drivers (Internal Factor)Exhibit 8.2: Mechanism of ICT Drivers (External Factor – Client Requirement)Exhibit 8.3: Mechanism of ICT Drivers (External Factor – Compli-ance Requirement)Exhibit 8.4: Mechanism of ICT Drivers (External Factor – Competi-tor Pressure)Exhibit 8.5: ICT Drivers by age of the companyExhibit 8.6: ICT Drivers by verticalsExhibit 8.7: ICT Drivers by genera-tion ownershipExhibit 8.8: ICT Drivers by revenue sizeExhibit 8.9: ICT Drivers by employ-ee sizeExhibit 8.10: ICT Drivers by growth rateExhibit 8.11: Drivers – By Growth of the companyExhibit 8.12: Drivers For Cloud AdoptionExhibit 9: Inhibitors/Barriers
List of Exhibits
04
Exhibit 9.1: Inhibitors/Barriers – By Age of the CompanyExhibit 9.2: Inhibitors/Barriers – By VerticalsExhibit 9.3: Inhibitors/Barriers – By Ownership GenerationExhibit 9.4: Inhibitors/Barriers – By Revenue SizeExhibit 9.5: Inhibitors/Barriers – By Employee SizeExhibit 9.6: Inhibitors/Barriers – By Growth RateExhibit 9.7: Inhibitors/Barriers – for cloud adoptionExhibit 10.1: Pain Points – By Age of CompanyExhibit 10.2: Pain Points – By VerticalsExhibit 10.3: Pain Points – By Ownership GenerationExhibit 10.4: Pain Points – By Revenue SizeExhibit 10.5: Pain Points – By Employee SizeExhibit 10.6: Pain Points – By Growth RateExhibit 11.1: Key Influencers – By Age of the CompanyExhibit 11.2: Key Influencers – By VerticalsExhibit 11.3: Key Influencers – By Ownership GenerationExhibit 11.4: Key Influencers – By Revenue SizeExhibit 11.5: Key Influencers – By Employee SizeExhibit 11.6: Key Influencers – By Growth RateExhibit 11.7: Percieved Benefits of ITExhibit 12.1: Decision Cycle of Small BusinessExhibit 12.2: Decision Cycle of Medium Business
Exhibit 12.3: Preference of access-ing the software – By Age of the CompanyExhibit 12.4: Preference of access-ing the software – By VerticalsExhibit 12.5: Preference of access-ing the software – By Ownership GenerationExhibit 12.6: Preference of access-ing the software – By Revenue SizeExhibit 12.7: Preference of access-ing the software – By Employee SizeExhibit 12.8: Preference of access-ing the software – By Growth RateExhibit 13.0: Purchase Trend – By Age of the companyExhibit 13.1: Purchase Trend – By VerticalsExhibit 13.2: Purchase Trend – By Ownership GenerationExhibit 13.3: Purchase Trend – By Revenue SizeExhibit 13.4: Purchase Trend – By Employee SizeExhibit 13.5: Purchase Trend – By Revenue SizeExhibit 13.6: Purchase Trend – By Revenue SizeExhibit 13.7: Important Factors while purchasing – By Age of the companyExhibit 13.8: Important Factors while purchasing – By VerticalExhibit 13.9: Important Factors while purchasing – By Ownership GenerationExhibit 13.10: Important Factors while purchasing – By Revenue SizeExhibit 13.11: Important Factors while purchasing – By Employee Size
Exhibit 13.12: Important Factors while purchasing – By Growth RateExhibit 14.0: Potential Area of ICT Deployment In SMBsExhibit 14.1: Potential Area of ICT Deployment In SMBs - By age of the companyExhibit 14.2: Potential Area of ICT Deployment In SMBs - By VerticalsExhibit 14.3: Potential Area of ICT Deployment In SMBs - By Owner-ship GenerationExhibit 14.4: Potential Area of ICT Deployment In SMBs - By Revenue SizeExhibit 14.5: Potential Area of ICT Deployment In SMBs - By Employ-ee SizeExhibit 14.6: Potential Area of ICT Deployment In SMBs - By Growth RateExhibit 15: Next Step
Research Overview
05
Purpose
Scope
The study reflects Indian SMBs’ (Companies between 10 to 1000 employees) behavior and inclination to adopt ICT and thereby highlight some of the key factors involved in the ICT adoption. This study will help product/service providers to understand better, develop, market and sell IT products/services to the small and medium market and improve their ability to link the value of their product/services to the specific SMB audience
As mentioned, this report is to present opportunities available in the SMB sector for IT product or service providers. This study has been conducted among 1400 SMBs across 40 Cities in India. Following param-eters were covered during this study:
06
Awareness, Adoption and Usage of ICT solutions among SMBs (For various functions like Communi-cation, Streamlining finance and its tandem Prod-ucts, HR and Payroll Management, Quality Manage-ment, Production and Designing, Centralized System and Inventory Management) Drivers and Inhibitors to Adopt ICT People influencing IT related decision making Business pain points of SMBs
Potential Investment in ICT
Key Take - Aways
Identify the compartments of demand for different products/services of SMB type
Understand the behavior of SMBs towards ICT adoption through various parameters like geography, vertical, age of company, ownership genera-tion, employee size and revenue Identify drivers & inhibitors as well as influencers affecting the IT purchase decision by SMBs
Identify the social media behavior amongst SMBs Understand current and future buying plans for specific categories of IT product/service (Cloud, Enterprise Mobility and PC-based software)
Understand the current buying pattern as well as future buying prefer-ences
07
This study will help to:
Research Methodology
08
Our Approach The study was conducted with an Interlink approach. In this we had interface with industry associations, in depth interviews, a nationwide survey and research on prevailing database.
Industry Associations
Interaction with the associations enabled the roadmap for initial hypothesis, which was subse-quently validated through the survey results, in-depth interviews and comprehensive analysis.
In Depth Interviews
Initial discussions were conducted with a statisti-cally proven representative sample of the key stakeholders across various verticals to establish a preliminary hypothesis. The validation for initial hypothesis through in-depth interviews was undertaken and reformed accordingly to repro-duce initial findings. The questionnaire was refined through initial interaction with Industry Experts.
Knowledge base
Facts backed up by data base and experience was strengthened to do a preliminary analysis of the SMB Sector in India. The sector was segregated based on identifying demographic cuts such as geography, employee size and so forth based on the prevailing data.
Survey
A statistically proven sample size was acknowl-edged for understanding the adoption levels, key drivers and inhibitors. The sample was segmented across the recognized demographic cuts.
Methodology
ResearchFox SMB – ICT Adoption Behavior 20141 was designed and conducted in November and December 2013. The research questioned 1400 SMBs that employ 5 to 1000 employees across 40 cities in India, completed in 1st week of January 2014.
1 The survey was conducted to validate the initial anticipated hypothesis and also to redefine strategies that can enable the technology suppliers to enhance
their competency and accordingly develop product and services for SMB’s sustainable business growth.
09
Companies were selected from online business directories. Companies without internet access/ and or companies not using email were screened out. So all projections made in this report are based on this standard.
Respondents were IT decision makers or influencers who spend at least 5% of their time on IT and are aware of most of the company's application.
Larger SMBs were intentionally oversampled to ensure sufficient responses within the size group for analysis.
The sample is weighted by estimating company size within each state to be representative of the SMB population by verticals.
99% confidence level and 3.5 as a confidence interval.
Communication
HR/Payroll Management
Inventory Management
Designing and Production
Centralized ERP
Collaboration
Finance & Accounting
Customer Management
Quality Management
Mobile Value Added Services
100%
100%
99%
98%
95%
91%
83%
55%
47%
73%
46%
39%
59%
42%
27%
60%
38%
30%
96%
91%
86%
82%
66%
50%
53%
32%
24%
55%
30%
24%
A1
A2
B1
B2
C1
High (More than 20%) Medium (5 to 20%) Low (Less than 5%)
By Growth of the Company
“Higher the growth of the company, higher is the awareness about ICT solutions used for various purposes”
It has been found that of the ICT solution has a bond with the growth of the company. Low awareness level can be attributed to Low growth.However, 39 percent of the companies with low growth believes that they can optimize their business with the help of inventory management solutions.
Exhibit 4.6: ICT Awareness among SMBs by Growth of the company
Source: ResearchFox Consulting SMB ICT adoption survey Base: 1400 UnitsMultiple responses allowed
10
Sample Charts
“More than 40% of SMBs with Rs. 5 -20 Crores as a turnover are finding it difficult to retain the staff and also to acquire and manage customers”
Compliance Activities
Incomplete Business Information on my firm
Insufficient Market Information
Customer Acquisition & Management
Attrition of Staff
Others Business Pain Points
Year of Existence
Less than Rs. 1 Crore
Rs. 1 to 5 Crores
Rs. 5 to 20 Crores
Rs. 20 to 50 Crores
More than Rs. 50 Crores
More than 60 % respondent 40 – 59 % respondent 20 – 39 % respondent 10 – 19 % respondent 1 – 9 % respondent
Figures are in %
Exhibit 10.4: Pain Points – By Revenue SizeSource: ResearchFox Consulting SMB ICT adoption survey
Base: 1400 UnitsMultiple responses allowed
By Revenue Size
Many SMBs have identified CRM and analytical software as a solution to their existing problem of acquir-ing , managing and retaining the client. Still there are more than 60 percent micro level firms which are facing the same difficulty. Since, CRM and analytical solutions are priced higher, it was analyzed in our study that the companies with higher turnover have lesser pain towards the point of customer acquisi-tion and management. There were no major pain-points except attrition of staff in the mid sized companies earning more than Rs. 50 Crores as revenue. ISVs have come up with a lot of cloud based CRM solutions, which in turn would decrease the pain of micro level companies.
11 ISV - An independent software vendor (ISV) is a company specializing in making or selling software, designed for mass or niche markets. This typically applies for application-specific or embedded software, from other software producers.
11
About ResearchFox
ResearchFox is a Bangalore based market research Company with focus on delivering high quality research services to business professionals, organi-zations and individuals through knowledge driven research methodology.
We provide first-hand data services & reports on various industries, technologies, market parameters and key competitors in the industry thereby giving rational forecast on market trends to help clients identify prospective growth areas and gain competi-tive edge.
Established as SBU of Han Digital group in 2009, ResearchFox was officially incorporated in 2012. We provide niche market research services which goes beyond client - vendor transactions/ interactions by not only paving way for strong relationships but also creating a healthy ecosystem for actionable decision making
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice a�er a thorough examination of the particular situation.
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