Microsofts "Soft Strategy" for SMEs

Microsoft Dynamics changes colors to color cotton:

According to UNIDO Indian has got 368 clusters that generate of Rs: 1570 billion per year.

Government of India rolled out a five year project, Project Vikas to make SMEs (Small and Medium Enterprises) more competitive. Project Vikas addresses cluster development approach to Indian SME s. The main clusters identified are

Agra – Leather
Ahmedabad – Pharma.
Chennai - Auto Component
Chennai – Leather
Ludhiana – knitwear
Pune - Auto Component
Tirupur – Knitwear

The key technology partner to this venture, project Vikas is Microsoft India, giving solutions through Microsoft® Dynamics, the ERP / CRM / Financial Management suite.

Thus Microsoft India is changing the image of an OS and server provider to a company that brings fortune to a marginally noticed sector, the Indian SME s (Small and Medium scale Enterprises).

Here is the story of a Tiruppur based apparel company

Established in 1990, Fashion Knits is a well-known name in fashion industry as it offers the latest styles, complex fabrics and stylish collections, and fresh and modern finishes. It employs over 1000 employees and had an annual turnover of US $10 million in 2007-2008.

With the help of REACH Sewn Technologies, a Microsoft® Business Solution Partner, it deployed REACH ERP on Microsoft® Dynamics™ NAV 4.0, Service Pack 3.0 to streamline processes, improve transparency, reduce wastage and enhance efficiency.

Fashion Knits was using a legacy, fabric procurement software for managing raw materials and finished goods, while accounting and financial management was handled in Tally 9.0. These applications were not integrated and data from one couldn’t be shared by the other. They also lacked transparency and security. There wasn’t any tool to track the status of the customer orders. This resulted in contradictions between actual stock and information available in the system.

Incorrect information of accounts and inventory and poor visibility of orders and cash flow led us to look for a reliable solution that could provide a holistic view of the complete business processes,” says RaviRamu, Director, Fashion Knits.

Initially, Fashion Knits planned to develop a custom built application. But it eventually decided to implement an ERP solution built on Microsoft® Dynamics™ NAV 4.0

The implementation started in October 2007 and within six months the solutions went live at its manufacturing units in Tirupur.

The modules implemented are Product Data Management, Merchandising Management (which also includes Enquiry and Sampling), Manufacturing, Purchase, Inventory, Warehousing and Finance.

“It is a symbol of an enduring commitment by Microsoft India to entrench “Made in India” for the Indian SME cluster as a global brand to be reckoned with” says the official website of project Vikas.

Scores of companies all first time computer users like Fashion Knit now using Net based applications.

Microsoft also benefits from helping Small Scale Enterprises. Yes it is a deviation form Bill Gates ambition of putting PC atop of every desktop. It is pushing new business models based on monthly per use license. It is no longer focused on product sales and license fees.

Perhaps Microsoft’s biggest bet on software is SaaS (Software As Service) and Cloud computing. Moving away from its traditional model of licensed revenues, Microsoft now wants to distribute its products and tools as services. They do think Cloud computing is will be an easy to manage click – to- run model for business.

The concept of Cloud computing is based on the fact that average server computer runs around 5-7 % of its total capacity. By Virtualization it can be raised up to 70 %. What Virtualization does is simple a server can handle multiple applications and same application is splitted over multiple servers. Ie we create virtual computers rather than real (Eg: VMware software).

Looking at this strategic shift, instead of waiting for the Indian market to change, Microsoft changed by itself, the key tactics of survival.

Information Technology is coming out of conventional areas to tap opportunities and try luck in niche areas, Keep watching, the game started!