Sample smb ICT adoption in India

Applied Intelligence

2014

This study reflects the Indian SMBs’ (Companies between 10 to 1000 employees) behavior and inclination to adopt ICT and highlight some of the key factors involved in the

ICT adoption. This study will help product/services providers better understand, 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

Understanding Indian SMB behavior towards ICT adoption

1400 SMBs

100 IT Decision Makers

40 Cities

More Info: [email protected] [email protected]

Contact: 08040493888,+91-9845213700Visit : www.researchfox.com

01

Contents

Intr

oduc

tion

Exec

utiv

e Su

mm

ary

Mar

ket V

iew

Research Over-viewPurpose and Scope

Report Descrip-tion

Key Take-Away

Research MethodologyOur Approach

Methodology

Overall Frame-work

Survey Participant Profile

Forecasts Assumption

SMB Market

Markets Covered

Segment Defini-tion

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 Landscape & 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 Trend

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

a of

ICT

Dep

loym

ent i

n SM

Bs

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 Exhibit

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 VerticlasExhibit 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: Perceived 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

This study reflects the Indian SMBs’ (Companies between 10 to 1000 employees) behavior and inclination to adopt ICT and highlight some of the key factors involved in the ICT adoption. This study will help product/service providers better understand, 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 the opportuni-ties 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 parameters 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 behaviour of SMBs towards ICT adoption through various parameters like geography, vertical, age of company, ownership generation, employee size and revenue Identify drivers & inhibitors as well as influencers affecting the IT purchase decision by SMBs

Identify the social media behaviour 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 Interfaces with industry associations, in depth interviews, a nationwide survey and research on prevailing database.

Industry Associations

Interaction with the associations enabled the roadmap for the initial hypothesis, which was subsequently 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 initial hypothesis were validated through in-depth interviews and reformed accordingly to reproduce 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 and 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 higher priced and it was analyzed in our study that the companies with higher turnover has lesser pain towards the point of customer acquisition and management. There were no major pain except attrition of staff in the mid sized companies earning more than Rs. 50 Crores as a 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 and by 2012 ResearchFox Officially incorporated. 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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