There is a tough business scenario for all business, be it local or global. Competition is everywhere. Added to this GST (Goods and Service Tax) has also brought in huge disruption in the market. The aim of GST is simple & transparent. But all business need to embrace IT (Information Technology) platform to be GST compliant.
On the other hand if we see closely, this is the best time for the Small and Medium Enterprises to consolidate and establish its position.
All corporate, Insurance, Banks, Railways, Airlines, many Government to Citizen services like EB, Water bill, Property tax even religious places have adopted IT solutions to run their establishments better. But when it comes to IT, though India has created large pool of IT professionals, majority of them either directly or indirectly works for the developed countries like US, UK and Europe. Especially when it comes to SME (Small and Medium Enterprises) Manufacturing industries, the adoption of IT solution is very low. The main reason for this is “Cost and Complexity”
Complexity is addressed by Cloud Computing
When we talk about cloud computing, the first thing that crosses our mind is data security. Today many of the businesses uses G-Mail which is on cloud. All the data in our smart phones are stored in the cloud. Our banking operations are on Cloud. So it is important that we get the right perspective about cloud.
Many of the critical data are stored in the world class data centers like Amazon, IBM, Microsoft, Google. Software Technology Parks of India (STPI) has many data centers in India. These data centers are fully equipped with top of the line IT infrastructure like uninterrupted power and backup power, multiple Internet connections from different providers, precision air cooling systems, dust controlled server rooms, powerful servers, sophisticated network components, Data backup both in local and remote locations ( to protect data in case of any disaster) facilities, Antivirus and firewalls. Top of all these, such data centers will have well trained professionals round-the-clock to monitor the facility. They also have close monitoring and access controls to protect the data.
To cut the long story short, Small and medium enterprises will not be in a position to provide such a data security even in their own locations. So adopting for the Cloud solution will be wise decision for SMEs.
Over and above, the cloud solutions are used by large number of companies. So such IT solutions providers keep building the features to their product. SMEs can leverage their businesses by using such solutions. Also these companies have built on-line support system to provide quick resolutions in case of any difficulty. Also these IT solutions are affordable, one need to pay per user charge on a monthly and quarterly basis.
Complexity of ERP in manufacturing segment.
As we have seen earlier, there are many business verticals like Banking, Trading, Retail, Airlines and Insurance that uses ERP system. However as we know, business process for different businesses will be different.
“ERP in the manufacturing segment is the game of men not the game of boys”
Among all, the manufacturing ERP is the most large & complex with very many business use cases. This is yet another reason for the hight cost, Complexity and many unsuccessful implementations. On the other hand, this complexity also becomes the essential reason for the SMEs to go for the right integrated IT / ERP solution to stream line their transactions to address their data problems. This will help them in better decision making, faster response and meet the statutory compliance.
Syscon Cronus has 2 decades of market standing servicing SMEs across many manufacturing verticals with GST compliance, is one of the enrolled ERP vendors under Digital MSME scheme.
Need for GST ready ERP
The implication of GST for manufacturing company spread across its various functions like Sales, Purchase, Sub Contracts, Imports & Exports, Sales and Purchase Returns, Advance Payments and receipts. The GST also has to be considered while purchasing from the unregistered dealers and Manufacturers (Reverse Charge).
Costing is one crucial function for the manufacturing industries. When it comes to complex bill of materials, it is made all the more difficult. Many a time the customer proposals are delayed due to non-availability of right purchase price after set-off of GST. Manual calculation will be very tedious and still accuracy of data is questionable.
To top it all, the returns are on-line, Hence it will not be possible for the manufacturing industries of any size to file the returns manually. Hence a GST ready ERP system is inevitable.
Cost & Complexity addressed by Digital MSME scheme
Digital MSME scheme provides 60% of subsidy subject to a maximum of Rs. 1 Lac for a period of 2 years for SMEs to adopt IT solutions on cloud. SMEs having Udyog Aadhar Memorandum (UAM #) will be eligible to avail the subsidy under the scheme. Interested SMEs can visit www.digitalmsme.gov.in to register. Ministry of MSME has worked hard to enroll IT vendors and provide their IT solutions at a super low cost. Since this scheme is for the Cloud based IT solutions. Hence the complexity is also addressed. This will be a golden opportunity for the SMEs to go ahead and adopt for the IT solutions to set their house in order.
Industry associations and Chamber of commerce will need to play a vital role in carrying this message and conduct awareness programs on this scheme to the industries.
Author of this article is S Vijay Venkatesh – MD & CEO Syscon Solutions Private limited, Syscon Cronus – Enterprise ERP Company.