Factors influencing SME Consulting

Factors Influencing SME Consulting Services - The SME segment in India is growing at a rapid pace. A large number of small and medium scale companies are setting up their manufacturing units and business branches in the country to tap the multi-dimensional opportunities the country offers. As a result, there has been an increased demand for many service-oriented consulting services. Companies involved in SME sector prefer to outsource these services to third world countries like India.

India - The emergence of the SME market in India is attributed to the large scale outsourcing activity carried out by multinational companies operating in the country. This has resulted in creating a niche for itself in the Indian market. As far as the infrastructure development in the country is concerned, it has far surpassed that of developed countries. With increasing labour productivity and cost effectiveness, this factor has encouraged the manufacturing industries to set base in the country. In addition, there has been a marked improvement in the quality of human resources employed in the SME sector. A combination of factors like reduction in cost of production and increased efficiency have led to the emergence of the market for SME consulting in India.

Knowledge - The extensive pool of knowledge on the activities of the companies engaged in SME market makes India a preferred destination. Most of the SME companies in India have set base in the country, requiring expert services in various aspects. It is believed that the lack of expertise and understanding on the part of the SME customers have inhibited their growth. However, with the rapid progress in information technology, a number of software companies have come up in the market offering these consulting services. Moreover, the emergence of the Internet has further promoted the use of these services.

Technological Development - Today India is home to a number of technological advancements. It is a rapidly growing technologically progressive country. As a result, the number of companies providing SME consulting services have increased exponentially.

Outsourcing - The market for SME consulting in India is increasing due to the outsourcing services offered by companies. The increasing demand for the outsourcing services is mainly due to the increasing competitive pressure from global market players such as USA, UK and Western Europe. Such companies offer IT outsourcing and software development solutions at low rates and in large quantities.

Technological developments are a great attraction for SME market. However, it is also a factor that hinders SME market penetration. As a result, many SME companies prefer to outsource their requirements to SME consulting companies. This helps them to get access to advanced technologies which they would otherwise not be able to afford.

Governmental Stimulus Package - There is a great attraction for firms engaged in SME market to utilize this opportunity offered by the government. For instance, the government offers tax breaks for firms manufacturing products that can be used for energy generation. In addition, there are grants offered for research and development activities. These provide an opportunity to SME firms to leverage their capabilities.

Business Infrastructure Development - Many SME firms are focusing more on improving their business infrastructure. They are looking to increase the productivity of their staff thereby increasing the turnover rate. To attain this end, they are engaging a number of experts who have domain experience in revamping business infrastructure. They are leveraging this expertise through outsourced professionals.

Professional Development - A lot of companies in the SME market are yet to develop the necessary professional skills. It is important for such firms to engage a team of professionals who have domain knowledge and expertise in specific verticals. These professionals are in a position to implement and develop strategies that would be essential for the company's growth. They can do this through workshops, seminars and online courses. This helps them to make necessary changes and get a competitive advantage in the market.

Technological Development - The scope for technological advancement is also expanding fast. This is because of the advent of various technologies that enable businesses to function more efficiently and effectively. Outsourcing to firms engaged in SME market helps them to access these advancements. These companies are in a position to incorporate these technologies into their operations and improve them in order to run successfully. There are many factors influencing this phenomenon. Chief among them is the shift towards services sector where there is intense competition.

Structural Changes - This is also one of the most important factors that influence the way companies operate. These changes are ones related to the business cycle and the production cycle. Many of the processes that companies traditionally have involved have become very complex and cumbersome. To outsource the task of these processes, the consultancy firms need to have extensive field experience and they should be aware of the best practices that are prevalent in the market. Some of the factors that contribute to this phenomenon are global economic conditions, the state of the economy in respective countries and the outlook of the economy. All of these factors and more play a vital role in shaping the direction in which SME's will go in the future.

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