The myth of the SME, MSME medium and small Industries especially in India.

1. The SME myth
White Paper on IT for SME’s in INDIA
Casper Abraham
CEO and Founder
Edgevalue
62-B Modi Residency, Millers Road, Benson Town
Bangalore 560 046 INDIA
http://www.edgevalue.com
http://www.clextra.in
casper@edgevalue.com
91-98450-61870
© SEP 2009

2. Clextra (NOT for India SME’s)
Clextra is an Enterprise Intelligence Framework and works for any firm in most
industries who want an „honest software framework‟.
In India, there are an estimated 12+ million such SME‟s, employing over 31 million
persons and accounts for a third of all Manufacturing output and a third of all Services
output. It‟s 4 times larger than organized and larger Enterprises.
While there may be exceptions – the potential to sell Software, Business Models and
Quality Services such as integral to Clextra will NOT work for the SME segment in
India for the following reasons ….
SME Background & General Information
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There are 26 million units in India.
Of these 97% are Proprietorship or Partnership firms.
They employ a total of 60 million people.
They account for 40% of industrial production. (Of the GDP 56.8% is
Services; Agriculture is 23.5% while Industry is 19.7%). GDP is about US
$ 1.3 trillion in the year 2009.
5. They account for 45% of the exports from India.
Why NO to ICT for SME’s
1. Any and all of the above consumption figures are for hardware,
nuts and bolts and commodity products.
2. Usually there is only one decision-maker – older person – not
willing to change – not too familiar with IT, Technology and more
up-to-date methods. Let‟s call him THE PERSON.
3. Traditionally Indians will not pay for information; intellectual
property; talented people and their time. (read services) – its God
given; its free – the seller should not be giving it for money in the
1st place.
4. Even if valued – THE PERSON – can get a free or CD-value only
copy of the Software or Service from his friendly neighborhood
paan-wala. He‟s not going to pay you anything – leave alone
valuable top-dollars!
5. The typical Indian SME is family run – mostly by 1st generation
Entrepreneurs. THE PERSON has built the person; the patriarch;
the money-bags; the Lord of all he surveys; the King of his domain.
6. Mostly THE PERSON does not have a second line – or their next in
line is(are) making more money having studied or engaged with
other non-SME forms of Business.
7. THE PERSON is not formally educated in Systems, Management and
Methods to grow a business.

3. 8. THE PERSON has put in 16-hour days 6 (even 7-day) weeks for
years and decades – he does NOT want his off-spring „to suffer‟ the
same way.
9. THE PERSON has made better profit than otherwise by avoiding
tax, duties and other statutory payments over the years. Any
transparency to new ways of doing things is seen as a threat to this
evasion and rotating of owed-funds for whatever purposes.
10.When it comes to labour and Staffing THE PERSON pays minimum
wage – and has gathered a whole lot of „yes-men‟. Can‟t do their
own jobs let alone adapt to a new and changing Trans-national
Information Economy. (“If You pay peanuts you get monkeys”).
11.THE PERSON finds his „off-spring‟ not up to the mark – not worth
spending time, money, effort, resources on anything – including his
or he proposal for „expensive‟ computers, servers, networking,
clients, systems and applications software, staffing,
communications etc. NO. We have got here without all that.
12.When it comes to CASH the SME will be under capitalized. It will be
locked into a bank „Stocks and Receivables‟ owing the banks lakhs
of rupees and barely meeting interest costs – leave alone rotating
the credit effectively.
13.Inventory LOCK. If analysed the SME will have obsolete or overvalued „non-usable‟ stock that can never provide the planned or
theoretical annual inventory turns.
14.Written off stock; bad-debt and other related „history‟ is never
removed from the physical nor virtual … this occupies a good deal
of everyone‟s time.
15.Nor has THE PERSON worked in any kind of formal, Corporate –
Private or Public Enterprise. No one can relate to this person in any
meaningful business way.
16.THE PERSON has evolved unique systems over time which has
WORKED well for them through GOOD and BAD times. THE
PERSON will not and should not be changing these anyway.
17.THE PERSON is not too keen to grow and take on more risk. Even if
they want to – THE PERSON is not be able to get money, market,
methods nor machines for it.
18.The SME has to anything and everything A WAY. A process or
method that is i. Defined by the Government Authority; ii. A global
best practice; iii. Best for that localized industry Association OR iv.
Software Vendor who has taken the LCM-HCF of having done this in
other places. If it‟s a pre-requisite it‟s called BPR (Business Process
Re-engineering. Before A WAY can be adopted THE PERSON (and
his team) will have to change THEIR WAY to A WAY. (Don‟t even
go there … you want to CHANGE THE PERSON, THE FIRM and THE
WAY things are done? Not in India – only God can do this.
19.THE PERSON believes what must be will be. You can‟t plan; do
things, make things happen unless they are destined to be. THE
PERSON will never ever make an ACTIVE decision that can change
things. Change – in his opinion – is not in his hands.
20.Clextra has been designed ground-up for trust and transparency.
You want to run your business properly. You want to pay taxes. You
want to look after your staff. You core-business is to make honest-

4. money. Name one SME that wall implement this – though THE
PERSON is God-fearing and visits the temple every week.
21.Typically under domestic pressure THE PERSON may have invested
earlier, earned personal money on a DIVERSIFCATION for his
son/daughter/nephew. Mostly would have failed re-enforcing THE
PERSON‟s conservative thinking.
22.THE PERSON – if he really thinks about it – knows that he can do
everything himself except delivery. Execution requires a team to
perform and teams need to collaborate and work together to
achieve more effective delivery – this requires a Information
Communications and Technology framework such as Clextra.
23.SME‟s is all about manufacturing. Execution and Delivery is about
teams making things that a customer wants. Teams means
collaborative functioning and the information tools to make them
productive, efficient and cost-effective. Clextra is best in class for
this … but name one SME who GENUINELY believes, invests in and
wants its people to succeed?
24.There is NO standardization of any process across an Industry or
group of firms.
25.Because of Statutory Reporting pressure – primarily tax controls
and end-of-year filing … the ONLY successful product in India has
been Tally. Any other will fail to succeed until standardization
across processes is achieved.
26.Value for money – one of the best value for money solutions ..
Clextra costs between Rs. 6,00,000/- and Rs. 60,00,000/- one
time for Software ALONE OR better Rs. 100,000/- per month
(including Hardware, Servers, OS + Applications, Uptime
commitments, Software, Business Models + Service Support.
27.Affordability – Consultants, Intermediaries and Channel Partners
adding their price to this makes it COMPLETELY unaffordable to any
of 30,000,000 million SME‟s in India.
This may seem a pessimistic opinion – however it‟s feet on the ground reality of
the Indian Market. It‟s like the Taiwan Slipper Manufacturer who wanted to
enter India – his slippers cost 50% of the market price and would last 2 times
that available in India. He could sell billions of pairs; achieve market share and
un-imaginable profits. EXCEPT – that in warm; soft-paddy-field India … millions
won‟t wear slippers even if they could afford it.
They say - like people - there are 3 kinds of firms …
1. Firms that make things happen.
2. Firms that know what is happening.
3. Firms that wonder what‟s happening.
SME‟s in India are for the most part in Class 3 of the above category. Read –
poor understanding and inability to harness automation and technology related
to „information‟.
IT – Software and Services are making the same mistake spending time on ONE
huge basket-case. SME is not a target for Clextra.

5. What an SME really wants
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Unique Product Advantages Product Quality
Product Functions
Quality/Price Relation
Design
Human Resource Management Technological Knowledge
Marketing
Knowledge
Customer Orientation
Training and Development
Marketing Activities Testing Prototype
Provision of Additional Services
Strength of Distribution Channels
Advertising and Promotion
Sales Department
Project Definition Specification of Target Group
Positioning Product
Product Functions
Technical Product Specifications
Market Size
Growth Potential
Product-Company Fit Relation with Current Assortment
Relation with Current Clients
Relation with Current Technological Knowledge
Pre-Development Determination Client Wishes and Demands
Competition Analysis
Technical Feasibility
Financial Feasibility
Technological Activities Assembling Technological Knowledge
Development Prototype
Internal Testing Prototype
Organization Production Process
Competition Degree
Novelty of the New Product
Possibility for Patents
Entrepreneur Commitment and Determination
Persistence in Problem Solving
Creativity
Team Spirit and Motivational Capacities
Project Approach Strength of Project Leader
Planning and Organization Progress Checking
Multidisciplinary Composition of Project Team
Innovation Culture Opportunity to Air Innovative Opinions
Space to Elaborate Innovative Ideas
Support for Innovative Ideas
Financial Means Internal Disposability
External Disposability
Collaboration With Other Companies
With Knowledge Centers
Involvement of Consultants

6. Why Clextra is still the best in class for India SME’s (if
THE PERSON – perhaps through his industry association
- is genuinely interested) …
1. Clextra was ground-up designed for the Internet, secure browser access
and one single interface ease of use.
2. Clextra was designed ground-up for SaaS; many, multiple instances can
co-exist with least compromise and interference. An association or
industry initiative will achieve far better results than „each crab trying to
pull the other down‟.
3. Clextra was designed ground up for efuntioning. Printing is OPTIONAL
even for statutory printing and output.
4. Clextra was designed up for Integrated working. ie. All horizontals such
as Human Resources, Finance, Suppliers, Customers, Manufacturing,
Quality Control, Documentation Management, GUI‟s interact with each
constantly rather than MOST software which started initially either as an
ERP or SCM or CRM or Financial Accounting or HRMS and then added
other features (Which are never that good nor integrated nor strong).
5. Clextra works with any vertical; from Aerospace, Automotive to
Agriculture Seed to Services.
6. Clextra can drill-down from Strategic top down initiatives to bottom-up
operational automated data acquisition to tactical decision making based
on analytics.
7. Clextra support any country, any state and city configuration for
statutory tax and labour requirements.
8. Each document is individually numbered and the tax components
separated for administration and management. Therefore the only
software product that offers retrospective administration and change of
taxes.
9. Clextra allows custom-designed and configurable Chart of Accounts.
Where reuired a separate Management chart of Accounts and Financial
Chart of accounts can be maintained.
10.Clextra designed for GENUINE management of your business – besides
meeting the paperwork and transparency requirements to meet State
Control objectives.
11.Only software product to have individual or team cash-flow management
options.
12.Clextra is genuinely OPEN. (not the software, the data). You can import
YOUR data anytime, anything IN and OUT of Clextra to spreadsheet or
comma separated value files.
13.All standard Management Accounting tools available; including Cashflow
Management; Costing; Activity Based Costing; Project Budgeting and
Management; Sales Forecasting; Bill of Materials Management for
discrete Manufacturing; Process Manufacturing; Services Delivery;
Workflow administration; Decision Quality Checklists.
14.Value for money – one of the best value for money solutions .. Clextra
costs between Rs. 6,00,000/- and Rs. 60,00,000/- one time for Software
ALONE OR better Rs. 100,000/- per month (including Hardware, Servers,
OS+Applications, Software, Business Models + Service Support.

7. 15.SAP or Oracle or Microsoft or Open Source ERP‟s are all quality viable
solutions and options but THE PERSON dependency on MNC‟s; IT Staff;
Skilled Domain Expertise is high. ROI (Return on Investment) is much
longer and TCO (Total Cost of Ownership) can be 6 to 100 times higher.
Contrary to this the optimism is in the always on Internet and mobile
penetration of India. Urban and Rural populace are now inter-twined with
Demand and Supply of almost anything merging with pressure on prices
affecting all the „politicians‟, „babus‟, „middlemen‟ and „intermediaries‟. Clextra is
the New Marketplace; Mardi Gras; Shandy of Ideas; Soft and Hard produce
exchange; information as a perishable commodity and those in pain will pay for
a cure – if they can find it.
A „hardware‟ + „software‟ + „business models‟ + „process method‟ + „Support
Services‟ such as Clextra gives you the best possible chance for your Business
to be more successful IF dependent on ICT.

8. Contact Information :
Casper Abraham
casper@edgevalue.com
Cellphone : 91-98450 61870
Edgevalue
62-B Modi Residency,
Millers Road, Benson Town
Bangalore 560 046
INDIA
Corporate webiste : http://www.edgevalue.com
Product website : http://clextra.com
Online demo : http://clextra.edgevalue.com