Blog: 4
System Driven Culture in SME
In India, the SME sector businesses are mostly family run. Here, traditionally, the culture was of trust and loyalty. After getting a job a person would rarely change his job. Thus companies could afford to spend on training people. Highly qualified people were not a necessity as people would learn on the job and would continue to work for their life with these skills. In such a company there was no need for any modern day systems.
But times changed. In 2000 India went for globalisation and the industry was suddenly facing global competition. Everybody thought that Indian companies will not be able to compete. Some did perish but the SME sector of India transformed itself in a big way and not only survived through but also started exporting and thus competing with best in the whole world. I started my software development business in 2001 and I have witnessed the change in the mindset of the industry.
The language changed from percent rejection to rejection in parts per million. New terms like Just in time, Kaizen, TQM, Lean manufacturing came in. Companies like Mahindra & Mahindra took the lead in quality systems and were awarded with the prestigious Deming Award. Not only were these companies transforming but they were also transforming their suppliers. Thus a new revolution was happening.
As the companies become sharper and competitive they began to go for stiffer targets in everything from sales to cost control. In order to achieve this they had to cut down on all sorts of flab and adopted standardisation. ISO, AS, TS etc. started becoming popular. The culture changed from trust and skill based to process and document based.
As the markets became aggressive the consumers were brain washed to buy more and more. This resulted in employees aspiring for more and more salaries. The attrition rate of talented employees started increasing. And the quality of new employees dropped. Industry had to adjust to this new reality.
Today, in order to have sustained growth, business now cannot depend on individual skills. Deskilling and standardisation is now a must. An enterprise software, which connects all the departments of a company helps to achieve this standardisation with little skill. Hence the so called ERP systems have now become a necessity.
ERP itself has come a long way since 2000 in India. The previously averse SME sector realised the importance of ERP system and has started implementing the system. They have learnt that their accounting package is not enough to run a world class manufacturing company. Good ERP companies with proven track record are now in good demand. ERP will now become the nervous system of these companies in the true sense.
