The Magic of Software for SME’s in G –15 Nations

1. The Magic of Software forSME’s in G –15 Nations Presentation by Gokul K. Agarwalla Management Consultants December 6, 2001 Caracas, Venezuela

2. Acknowledgement • At the very beginning of the presentation I would like to acknowledge that a large percentage of the material for this presentation has been derived from articles written by a very successful entrepreneur and a columnist, Mr. Rajesh Jain of Mumbai, India

3. Past Battlegrounds Europe America South Asia Middle East Past WarsLandResourcesPeopleReligion

4. The Next BattlefieldBusinessThe Next WarSoftware

5. Computers & Internet have changed our lives • Advances in semiconductor & Networking have powered this revolution • Software is the invisible factor that is common to both • Software has become the new physical infrastructure of the information age

6. Software is Ubiquitous • Software is in everything around us • The magic of software has made devices more functional • Software has been a key to India’s transformation • Yet, many challenges lie ahead

7. Miles to Walk ….. • Why computers crash so often? • Why does it take time to start a computer when it takes no time start a car? • Why so little intelligence in messaging software? • Why do we spend so much time to search information? • Why so many forms to fill? • Why can’t we share information more effectively? • Why don’t the systems learn our habits?

8. Biggest Opportunity for us Lies in Software • Total software market worth close to Trillion Dollars in 2001 and will double in the next seven years • Enterprise software industry is worth $ 80 billion and will rise to $200 billion by 2004 according to IDC • Software remains as much art as science

9. Software is the Oxygen of Business.

10. The Art of Software • Software Industry is Large – from operating systems to Desktop Applications to Building Blocks to Enterprise Applications to Embedded Systems • Integrating applications not so much a technical software challenge as it is a challenge to re-engineer business processes

11. There are No Silver Bullets! • Frederick P. Brooks in his books says …. • I believe the hard part of building software to be the specification, design, and testing of this conceptual construct, not the labor of representing it and testing the fidelity of the representation. • Longer the Software remains an art, larger is the opportunity for India and other G-15 Nations

12. Software’s Challenges & Opportunities • Lot of Software is still handcrafted • Software projects have limitless possibilities • User’s use less than 10% of the software capabilities • It is assumed that people will adjust to rampant, irrational and escalating complexity of hyper-technologized society

13. Two Visions of Solutions • New technologies will make programmers more productive • New technologies will enable more people to use software without support • Software will be increasingly procured from the global markets • This represents a significant opportunity for G –15 Nations

14. Software will be Developed as Components • Humans are a good example of component technology! • Organizations can also be thought of like organisms • There is a need to create “Lego Software” • Managers of SME’s need this self-serve Lego Software to develop an integrated view of their businesses

15. How Will Lego Software Come into Being? • Developing a framework to determine how components locate,identify and communicate with other • Need for the software industry to accept the software equivalent of PCI bus or the SCSI interface.

16. Software for SME’s • Large companies have many software options, SME’s have very few! • Small Enterprises are those are less than 100 people. Medium enterprises are those with 100n to 1000 employees. • SME’s typically lag in adoption of technology by at least 2 years

17. 10,000 Big Cos.v/s 25 million SME’s

18. Characteristics of SME’s • Strongly owner Manager Driven • SME’s do not have much of a process or structure • SME’s are more flexible • Managers are generally “well-rounded” • More People dependent than process dependent • Less IT sophistication • Focus more on medium term survival than long term profits • Waste a lot time and money on SG&A • Time Pressured and so want one-stop-shop relationship

19. Characteristics of SME Solutions • SME’s want a solution, not this hardware or that software • SME’s want instant gratification • SME’s do need or want the latest or the greatest technology • It must be simple to use, easy to deploy, and provide clear tangible benefits

20. How does go about this challenge? • Offer understanding and modeling of the business process • Use software components to model business objects and relationships • Allow business owners to specify business rules easily • Allow business owners to modify business objects in a simple manner • The entire process needs to be rapid so that the business owner can see immediate application

21. Challenges in creating this “Lego Software” for SME’s • Create business process definition and modeling system • Enable mass-customization such that business owners and managers can do it themselves • Allow for evolution as SME grows

22. This is a Big Challenge! • The SME wants an e-business suite which manages customers, suppliers and employees/machines at very low cost – hundreds of dollars not thousands. No such integrated system exists today. • This is a challenge and an opportunity for software and software developers • No MNC’s will undertake this task!

23. What is happening the software industry? • Grady Booch in a recent article makes these observations ……… • Software is the catalyst that makes new ways of business and connecting people possible – thus affecting all! • Building contemporary software is still hard – complexity is perceived as value • No imminent breakthroughs in software development • SME “Lego Software” has to have simplicity for stacking them into a workable system

24. Requirements for SME e-Business Solution • Communications – reliable, cost-effective and high speed • It needs to handle internal functions like finance, HR, taxation, etc., collaboration tools like calendar, instant messaging, etc., customer functions like database, CRM, etc. and website management like hosting, shopping cart, etc.

25. Requirements for SME eBusiness Solution contd…. • Need for outsourced services will become paramount • Back office services could be outsourced just as well and represent significant opportunities for G-15 nations • Development of marketplace specifically designed for SME’s • All these services need to be aggregated and presented to the SME’s as a solution • Marketing such a solution will be an even greater challenge

26. Marketing to SME’s would be the greatest challenge! • SME’s are spread throughout but hard to reach – cost of customer acquisition is very high • SME’s are conservative to change • Lots of players in the market; therefore, lot of confusion

27. Some Approaches to reach SME’s • Partnerships – Banks, Telco's, • Internet – Lure them by Offering some free services • Use SME Eco-system – word of mouth • Government and Industry Association – EDI for customs, taxes, etc.

28. The New Internet

29. An Agenda for the G –15 Nations • All participants in the economy need to follow a concerted effort • Agenda for the Corporate’s • Agenda for the Educational & Research Institutions • Agenda for the Citizens • Agenda for the Governments

30. An Agenda for the Corporate’s • Integrate the Internet Internally • Set up an Extended Collaboration Network • Invest in Analytics • Train the Workforce • These steps can have spiral effect on the economy

31. An Agenda for Educational & Research Institutions • Emphasize Faculty Led Research • Increase Industry Interaction • Nurture Entrepreneurship • Leverage Alumni • Set up Distance Learning • Allocate sufficient time to make it happen

32. An Agenda for G –15 Citizens • Get an email address • Stop tolerating Inefficiencies • Refuse to enter data twice • Fight Queues • Demand Better Information • Share Experiences

33. Agenda for G–15 Governments • Remove Regulations on Telecom and Internet • Computerize financial and legal systems • Integrate databases • Redesign Investment Laws • Create an environment to depend upon local talent • Emphasize creation of local talent pool as first priority

34. G- 15 Governments Should Create SME Technology Utility • Computing: Management of SME’s local IT Infrastructure – the remotely managed desktop • Communications – A local server on SME’s LAN with intermittent connectivity to the Internet • Software: An integrated e-business suite of applications as described earlier • Service: Outsourced It enables services

35. Why is this approach different? • Target Market is Corporate world’s poor • Comprehensiveness redefined • Software CD/ASP Hybrid • Integrated, Internet Centric Application Suite • Standardization

36. SME Software 10-10-10 Message10 times the software you have10 times the performance one-10th the costInterested?

37. SME Software ApproachLinux BaseAmazing Price StandardizationWhole SolutionSmart IntegrationIntelligent CloningLatest TechnologiesDistribution via Internet Subscription Business Model