Volume 15, Number 1 Article by A Koppar March, 2003
SMITs: Growth Issues :
Size does matter, Ananth Koppar, President & CEO of Kshema Technologies opines, especially for strategic outsourced deals. Other than a specific set of criteria, most large customers are looking at vendors who can provide long-term end-to-end solutions and are able to withstand short-term internal and external threats. SMITs are handicapped in terms of domain knowledge as well as technology; differentiation between players is missing. The need for control from the owner/managers often leads to shortsighted strategies that hinder growth and come in the way of M&As. With large companies now vying with SMITs for smaller deals, competition has hotted up. Further, SMITs find themselves unable to grow beyond a certain threshold level as they have difficulty in attracting and retaining talent, managing people, they lack a strong focus on marketing and sales and their systems, processes and methodologies are shaky. As the focus is on q-on-q earnings, business growth is opportunistic and not oriented towards building specific capabilities.
SMITs need to focus on niches and use the M&A route to the market. They must piggyback on the marketing set up of larger organisations, have divisions specialising in functions, and professionalise management. Along with developing processes to enhance client acquisition, they must look at companies below the Fortune 500 level which are yet to realise the full potential of outsourcing software services.
Reprint No 03108e
