SMEs facing barriers in software adoption

The Times of India, Nov 9, 2012

Less than a third of SMEs out of the 1,047 companies surveyed consider using software to address their business issues, said a Nasscom AWSME India 2012 report released on Wednesday. High cost of hardware and software are the biggest barriers for software adoption among SME users. About 47% of the respondents said they would buy software if companies provided in-person training sessions and 42% of them said installation and demonstration of software in their offices were important in their purchase decisions.

Many non-metro SMEs have concerns around power cuts and data privacy. Only 30% SMEs have been approached by big companies for purchasing business software, while a majority of the market still remains untapped. SMEs still bank on transaction through cash over internet banking. Less than half of the SMEs surveyed use plastic money for transaction. Thus, software companies need to accommodate the traditional payment options in their interaction with SMEs, said the report. However, there was a relatively higher adoption of cheques and internet banking among businesses over Rs 100 crore, while SMEs with revenues of around Rs 5 crore mostly transact in cash.

Though cloud based companies are offering services on a pay-per-use model, there is low awareness among smaller companies (9%) about cloud technology and relatively higher in metros (13%). SMEs with revenues over Rs 5 crore have a more positive disposition towards cloud.