Tech Jugaad
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The document discusses the landscape of small and medium businesses (SMBs) in India, highlighting their substantial contribution to the economy and the growing number of tech-ready SMBs. It outlines the challenges faced by these SMBs in adopting technology, including cost barriers and lack of skilled employees, and emphasizes the potential economic impact of addressing these challenges. The concept of 'tech jugaad' is introduced as innovative, low-cost solutions that can help SMBs leverage technology for improved customer engagement, operational efficiency, and overall growth.
Tech Jugaad
- 1. WORKING SESSION: RECRUITMENT BEST PRACTICES MAY 2014AUGUST 2015 Tech “Jugaad” For the new-age SMBs
- 2. 2 India is home to a substantial base of SMBs, who contribute massively to the economy SMB Landscape – Country Comparison GDPcontributionofSMBs(PPP,USDTrillion) Number of SMBs (Millions) India Germany UK Brazil Indonesia Philippines Australia Russia 50250 $0.5Tn $1.5 Tn $3 Tn $7 Tn $9 Tn US China Total SMBs ~50Mn SMB ~120Mn Total Employment ~40% GDP Contribution ~40% Total Exports
- 3. 3 A significant number of these SMBs are already Tech-Ready ~50 Mn Total SMBs in India ~10Mn Tech-Ready SMBs3 Medium Small Micro 0.2 Mn 0.8 Mn 9 Mn ~10 Mn 19% 19% 15% 9% 4% 33% Retail Professional Services1 Manufacturing Education HealthCare Others2 Vertical Split of Tech-Addressable SMBs Note: 1Professional Services include Doctors, Lawyers, CAs, IT/ITeS firms, Stock brokers/agents as the major constituents; 2Others include Travel & Logistics, Restaurants & Hospitality, Real Estate and Auto & Ancillaries 3Filter applied to exclude – Rural businesses | Mom & Pop stores (in Retail) | Businesses without fixed premises /hired employees (excl. professional services)
- 4. 4 Basic Tech Readiness among SMBs is being driven by nexus of 5 key Digital enablers Impressive PC Adoption Increased SMB desktop adoption level from in 2025 in 2014 5 Mn Business solutions becoming affordable Surge in social media in 2025 in 2014 2-3 Mn 25 Mn in 2025 in 2014 1 Mn 8 Mn Huge surge in social media using SMBs The number of SMBs using business solutions growing rapidly Exploding smartphone usage High adoption levels from in 2025 in 2014 10 Mn ‘near universal’~8 Mn Easy access to internet Increase in Internet adoption in SMBs in 2014 in 2025 2.5 Mn ~5 Mn Source – News Articles, Company Websites, Zinnov Analysis, intuit report
- 5. 5 Led by digital enablers, SMBs are witnessing disruptions across four key business levers 55 Discoverability and reach Managing customer relationships Customer experience enhancement Optimizing sales motions New sales channels Operations Optimization Procurement Demand Forecasting Optimal resource utilization Sourcing of relevant talent Internal Collaboration Employee Engagement Labor Productivity Skilling Logistics | 3PL Warehousing Partner identification Inventory Optimization Real-time Location Services Four key business Levers impacted by tech adoption Customer Targeting and Engagement Operational Excellence Workforce Enablement Supply Chain Management Digital SMBs A D CB
- 6. 6 Entrenched Tech Players are already penetrating the SMB space across 4 key business levers Digital SMBs Customer Targeting and Engagement Operational Excellence Workforce Enablement Supply Chain Management Business Website B2B Aggregators Online Marketplaces Marketing Accounting Solution SMB- focused ERP Mobile- POS Online Job Portals Productivity Tools for Business Collaboration Solution 3PL Logistics Provider Supply Chain Visibility Solutions A B C D 6
- 7. 7 Awareness Reluctance Cost Support Security & Privacy However, SMBs face several basic challenges in their IT adoption lifecycle 25% SMBs feel they do not have skilled employees to use IT 24% SMBs think lack of service provider support as a challenge 23% of the SMBs think that the manual methods are working well 31% SMBs avoid technology as their customers do not use it 24% SMBs think tech would be too difficult to learn and use 21% SMBs are not aware of know-how to get advantage from IT 32% of SMBs perceive the cost of IT as ‘High’ 35% think the high cost of hardware as the most important hurdle 25% privacy and security as key barriers to tech adoption SMBs are concerned about data and store files on CDs or hard drives Source – News Articles, Company Websites, Zinnov Analysis, intuit report
- 8. 8 Due to these Challenges, Indian SMBs Fare Poorly on 4 Key Business Levers Compared to their Global Counterparts 8 Zinnov’s Global SMB Business Excellence (GSBE) Framework Australia China BrazilIndia US UK Germany LowHigh Medium Note: Each of the 4 Business Lever was rated relatively on individual parameters for all the countries to arrive at a final rating A Customer Targeting and Engagement Operational ExcellenceB Workforce EnablementC Supply Chain Management D
- 9. 9 Solving these SMB challenges would result in an Exponential Impact on the India economy 9 ~168 Mn Additional GDP ~$ 1.1 Tr Increase in Exports ~$ 264 Bn Incremental Employment Generation Overall Economic Impact 75% of current revenue Impact through Revenue Enhancement 50% Impact through Cost Optimization 25% Digital SMBs
- 10. 10 Confluence of Challenges in Conventional Technology interspersed with Rapid IT Consumerization has led to the evolution of Tech Jugaad Jugaad means an innovative, non-conventional Quick-fix 10 Challenges in Conventional Technology 1 2 3 4 Customer Targeting and Engagement Operational Excellence Workforce Enablement Supply Chain Management Tech-Jugaad is a low-cost solution to any business problem leveraged by the “Bottom of the Pyramid” SMBs Tech Jugaad Rapid IT Consumerization
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- 12. 12 Disruptions in Customer experience enhancement • Manager unaware of the food critic’s look • Searches on Facebook & downloads picture • WhatsApps the picture to the restaurant staff • Staff treats critic with utmost priority • Customer Satisfaction!!! <5 minutes to collaborate with the staff and troubleshoot the problem • A customer checks-in on Zomato • Turns out to be one of the Zomato food-critics 1 2 3 4 Benefits BETTER CUSTOMER EXPERIENCE INCREASED VISIBILITYINCREASED SALES Challenges: Challenges LESS CUSTOMER SATISFACTION LOWER REPEAT CUSTOMERS DECREASED RATINGS (ZOMATO) 4.3 rating increased from 3.9 in a month ~30% repeat customers Food Plaza a fine-dining restaurant in Chennai FOOD PLAZA Jugaad
- 13. 13 Disruptions in Customer engagement – Uber Puppies • 6 Uber Cabs were deployed for 3 hours, 2 puppies each in both Pune and Delhi • For the customers to Play-donate-adopt! >200 happy customers ~100% adoption rate~INR 25K in 3 hours Challenges:DECREASED CUSTOMER ENGAGEMENT WITH CONVENTIONAL MODES CUSTOMER ENGAGEMENT INCREASED VISIBILITYINCREASED DONATIONS 1 2 3 4 A NGO in Pune An E-commerce website Benefits Jugaad Challenges
- 14. 14 Disruptions in conventional sourcing methods • Sanjay started using POWER2SME which helps in sourcing input raw materials at the most economical price points, 3 months ago to do away the sourcing problems ~35-40 tons steel/Month >30,000 SMBs Powered ~20% less price than most suppliers EASY TRACKINGTIMELY DELIVERIES APP BASED MODELECONOMICAL PRICING 1 2 3 4 Challenges: HIGH COST OF RAW MATERIAL DELAYED DELIVERIES LESS SUPPLIER CHOICES Sanjay is the owner, H&H MechTech, a construction firm in Gurgaon Benefits Jugaad Challenges
- 15. 15 Captures images of new designs Forwarded to customer in Delhi for approval Design approved; Order for consignment given WORKER SMB OWNER CUSTOMER 1 2 3 4 COST SAVINGS INCREASED PRODUCTIVITYBETTER COLLABORATION Challenges:HIGH TIME-TO-MARKET INEFFICIENT COLLABOTATION NON VALUE ADDED ACTIVITIES >20 man hours saved per week ~15% increase in productivity INR 5K saved per week Jayram is the Owner of a furniture trading firm in Amroha (U.P) and a small manufacturing in a nearby district 150 KMs away Benefits Challenges Jugaad Disruptions in Business Collaboration ways using WhatsApp
- 16. 16 • Lockup collaborated with OlaCabs to deliver food • Ola assures the customer of super-fast delivery • In pipeline - Ola Store, will deliver on-demand groceries with over 12,000 products ~15% increased sales ~100 Restaurants in collaboration <20 minutes delivery time • In USA Uber delivers food, fresh juices on-demand • Currently it operates in US and is looking to expand it worldwide 1 2 3 4 7 major cities <10 minutes delivery time EASY TRACKINGSUPER-FAST DELIVERIES APP BASED MODELLOWER LOGISTICS COST Challenges: DELAYED DELIVERIES INEFFICIENT COLLABORATION HIGHER COSTS is a fast-food delivery outlet in Gurgaon, earlier using delivery boys for the service Benefits Challenges Jugaad Disruptions in conventional logistics approaches
- 17. 17 “Jugaad” focused SMBs led to a new breed of smaller players that disrupted the market… However, even big players are now showing dedicated focus on SMBs Tech Jugaad Collective bargaining for aggregated SMB buying Cost Savings and enhanced ROI Simple, easy-to-use solution Website creation in less than 13 mins. Vertical-specific solution Easy-to-use service Low-cost clubbed with tailor-made CRM for SMBs Introduced local language localization MS partnered with GoDaddy to target SMBs Ambition Express – pan India Roadshow for SMBs Facebook’s “Missed Call Ad” format with Zipdial
- 18. 18 Both SMBs and technology players need to evolve in order to grow in synergy Build basic Tech Awareness Invest in Tech-focused Talent for business growth Elevate from quick-fix solutions to evolved solutions Collaborate with Tech cos. to discuss use cases Innovative Outreach Programs to Build SMB Awareness Identify & convert “Tech- Jugaad” focused SMBs Build products & solutions tailor-made for SMBs Explore partnerships with Tech- Jugaad players to uplevel SMBs What Should SMBs do ? What Should Tech Players do ?
- 19. 19 19 Zinnov Worldwide 21, Waterway Ave, Suite 300 The Woodlands TX – 77380 PH: +1-281-362-2773 Meilifang Tower 4, Entrance 4, 10/F #1003, 11 Beiyuan Shuangying Road, Chaoyang District, Beijing China 100012 Level 42, Suntec Tower Three 8 Temasek Boulevard Singapore 038988 PH:+65 6829 2123 69 "Prathiba Complex", 4th 'A' Cross, Koramangala Ind. Layout 5th Block, Koramangala Bangalore – 560095 PH: +91-80-41127925/6 First Floor, Plot # 131, Sector - 44, Gurgaon – 122002 PH: +91-124- 4420100 3701 Patrick Henry Dr. Building 7 Santa Clara CA – 95054 PH: +1-408-716-8432 info@zinnov.com www.zinnov.com @Zinnov Thank You…
Editor's Notes
- #12: So lets look at some Case studies, shall we?
- #14: Dogspot.in - an online business – into dog accessories ResQ Pune
- #18: Google launched its MyBusiness suite which is specifically focused at SMBs Microsoft shifted its O365 to a subscription model and partnered with GoDaddy to bring O365 to more small businesses SAP’s Ambition Express a first of its kind pan-India bus roadshow that bought innovative SAP solutions and services to the door-steps of Indian SMBs – traveled ~5,500 kms across 14 Indian cities and 5 states Facebook joined hands with ZipDial to launch new ad format with ‘missed calls’ specifically targeted at SMBs who may still use feature phones - Once a user clicks on the ad on Facebook, a number is dialled which triggers the ZipDial experience and continues engagement with the user off Facebook via SMS and voice. This experience then drives online-to-offline engagement that encourages the user to perform an action such as purchasing a product, watching a television show, etc.