IBM targeting small businesses to make it big in India

IBM in India has gone after small and medium businesses. Serving such customers should be difficult for a global firm with its overheads and preponderance of large customers who can be efficiently served in a distributed manner round the world. Small businesses in India, for their part, could feel overawed and skeptical about engaging with a firm of the size of IBM. So, the approach has been to offer as simple a solution as possible where the customer acquires a capability which he can virtually “plug and play”. To reach such customers, IBM India is spreading out from metros into Tier II and III towns.
The main platform through which customers are served is Smart Business. It does not customise solutions but offers options in terms of packages and features off the shelf, not tailored garments but T-shirts of many sizes and standard designs. And there is great flexibility in terms of whether you want to host, manage or share, in different combinations of the three. This drive for small and medium businesses has brought in new categories of customers like private hospitals, educational institutions and cooperative banks that wish to become professional. A private hospital should be able to give a patient checking out his bill with the same speed as a hotel. A private engineering college should be able to digitise its course content so as to build a reputation that will bring in good students who will then go on to get good placements.
Pune-based Mahesh Sahakari Cooperative Bank in 2006 had engaged IBM for the installation of hardware and networking for core banking at a project cost of just under Rs 2 crore, including replacement of desktops. Core banking was installed in August 2008 but not without some effort as “initially there was resistance from staff who had to be given training.” The bank has ten branches plus head office, done Rs 550 crore of business, and clocked a net profit of Rs 3.5 crore. They had a good experience of IBM which was not just the vendor but also guided them, setting aside concerns for its own sales and never felt IBM was a very big company. It often sent very senior representatives and gave a one-point contact.
Innovation Auto Risk is a joint venture between Innovation (turnover: £140 million) and Auto Risk (Rs 19 crore). It has a full-time staff of 30 and works through a network of 1,400 engineers who work through regional offices. They offer a claim management solution in motor insurance and needed a portal and a facility to host their software. Their main requirement was connectivity and speed. When a truck meets with an accident, the insured gets in touch with Auto Risk which helps him to lodge a claim through their portal.
The hardware and software were tested by calling Auto Risk from remote parts of the country. The crucial thing was how soon they could be reached. Auto Risk has a data centre at its office which has been created and is served and run remotely by IBM. Auto Risk are capitalising its cost, close to $1.5 million, over five years. The agreement with IBM, signed is getting off the ground now.
IBM has treated India as an innovation hub and a market with immense potential. There is a lot of interesting work that they do in Indian research labs and software labs where they have created solutions keeping the Indian clients and business landscape in mind.
It recently showcased some of the latest technologies developed like the medical analytics platform, drug pedigree and traceability solutions, and threat and fraud detection solution.
At another end is the Spoken Web project, one of the innovative initiatives currently being piloted by the India research team which aims to transform how people create, build and interact with information using the spoken instead of written words.