The Strength of collective might: Imperative to collaborate & Co-Opt for SMEs.

–Contributed by Vasant Prabhu

As the Rupee tumbles to new domestic lows while appreciating against the Dollar, Software companies are running for cover, literally, covering their receivables (revenue cash flows from overseas operations) against Foreign exchange fluctuations. The Rupee depreciation is however not bad news altogether, on the positive side it is an indicator of   the global perception of the rising fundamental strength of the Indian economy reflecting  in  the rising purchasing power of the Rupee in the global currency market. This realization has not lost out on the Indian software companies, all big & small. So 'Hedging' is not the only Buzzword for software companies, especially small MSME companies in the IT sector. They have also realized the power of 'collective cooperation & collaboration' to fight the new challenges facing them today. It has begun as a small movement in the Tamil Nadu region fostered as an initiative by the Software technology park of India (STPI). What began as a connection through virtual exchange of trade delegations of the MSME IT companies between India & Finland, has blossomed into a platform of small & medium IT companies to share their strengths, best practices & put up a collective front on issues especially with Governmental bodies on regulatory Policy related issues which are critical for their survival. Scale of operations has always been one of the banes for MSME companies in the IT sector, especially when it comes to winning new clients & expanding geographical footprint. Infosys, Wipro, TCS & Satyam et al., which started once as small companies have grown in scale & proportion which gives them easy access to company Boardrooms & bargaining power in pricing and terms of contract. The MSME are put to a severe disadvantage in this respect, effectively trapping them in a vicious cycle of scale vis-à-vis growth. Not any more, with such a forum, the MSME's are fighting back to save their $ 10 Billion Industry. So whether it is purchasing, Finance, selling or simply managing, the forum will serve to network all like-minded companies in the MSME space (companies with turnover less than 100 Crores, last count pegged at 3200 in the IT   Industry) onto a knowledge-sharing platform to fight the onslaught of big companies in the IT space.

 

 

There have been some efforts in the past to provide a common platform for SMEs at Industry & Trade body fora's, but have been limited in their scope & utility. These efforts have either taken the form of discussion forums on Trade portals or Networking events in the form of Seminars organized by Trade commissions of countries. What has been lacking is a holistic solution that can effectively provide a framework for addressing all the issues through effective handholding & mentoring of SME when they to seek to collaborate and co-opt within their Industry specific clusters. While much attention has been paid to the development of Industrial clusters & SEZ's, the need for harnessing the collective best practices & giving a collective voice for MSME's on a structured platform on a sustainable basis is the need of the hour. The geographical incubation practice from Milagrow Business & knowledge solutions is one such initiative towards addressing similar challenges faced by small & medium enterprises in diverse Industry segments. As the pace of globalization increases, so would be geographical expansion, cross border collaboration, Mergers &Acquisitions at all levels of the Business spectrum, size and scale being only a matter of convenience and conviction. Here the Geographical incubation practice would also support MSME's effectively identify niche segments & Business opportunities in countries abroad and facilitate smooth transitioning of Business from start up to scale up stage. This would be achieved by building an eco system where MSME would get all the sustenance support in terms of Industry knowledge & developments, Policy & regulatory framework both at federal & local level, Academic support/Research material,

This entry was posted on Tuesday, November 20th, 2007 at 11:50 am and is filed under Milagrow MSME Planet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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