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A small number of MBs account for almost 25% of SMB ICT expenditure in Sri Lanka, says AMI

Kolkata, India – April 4th, 2012 – Sri Lanka medium businesses (MBs, companies with 100 to 999 employees) are contributing impressively to the nation’s economy. Globally, small and medium businesses adopt IT in 3 stages. Wave 1 is building infrastructure solutions. Wave 2 is deploying connectivity solutions. Wave 3 is the most sophisticated with them adopting advanced IT solutions for extending their business reach with their customers and business partners. A significant proportion of the Sri Lanka MBs have already migrated to the second wave of technology adoption. A relatively lower proportion of these MBs have crossed over to the most advanced third or last wave of adoption. AMI-Partners studies show that this propensity towards technology adoption by Sri Lanka MBs is reflected in their having spent more than US$88 million on ICT in the last year; and this trend is predicted to continue.

“The overall economic outlook among Sri Lanka MBs for the next 12 months remains strong,” observed Swati Sasmal, Vice President - Research at AMI-India. “Nearly one in four of these MBs are considering the addition of new sites and hiring new employees. Moreover, a typical MB anticipates an almost 8% rise in annual sales revenues next year.”

Displaying a significantly high ‘Spend-Universe Ratio,’ MBs comprise just over 2% of the overall PC-SMB universe by volume (or business numbers) but account for as high as a quarter of the total SMB ICT spending. MBs are therefore the real growth-engines in Sri Lanka in terms of ICT usage.

As globalization’s growth continues apace, improved connectivity with a strong networking infrastructure is a “must” for MBs in Sri Lanka to gain efficiency and attain broader reach. Sri Lanka MBs have also become much more client-oriented because customer satisfaction is the buzzword for success in the current era. Thus, they intend to remain constantly accessible by customers, creating a 24 X 7 atmosphere.

“An adequate infrastructure is required for the above facilities,” notes Ms. Sasmal. “Hence, a quarter of Sri Lanka MBs have indicated that upgrading bandwidth for better data networking is one of their key strategic planning areas in the next 12 months.” Also key is anytime/anywhere access for employees through a secure voice & data network at affordable costs. This has elevated the importance of VoIP technology.

In an attempt to reduce inventory and costs, and increase business process efficiency, 20% of MBs in Sri Lanka are emphasizing the adoption of various business application solutions such as ERP in the next year. Moreover, due to increased competition, Sri Lanka MBs are focusing on building long-term, real-time relationships with customers; a similar proportion of MBs are also planning to adopt CRM solutions next year.

“ERP usage is still at its infancy in Sri Lanka,” notes Ms. Sasmal, “more so within medium businesses. Vendors need to make a concerted effort to increase ERP penetration through greater awareness building with past case studies, industry best practices, etc.” MBs in the plantation, readymade garments, healthcare and hospitality industries would greatly benefit from the adoption of ERP and are a natural focus for software vendors. “Significant opportunities exist for both global and neighboring solution providers,” Ms. Sasmal concluded.

Related Studies

AMI-Partners-India has conducted the following studies exploring IT adoption in Sri Lanka “2011-12 Sri Lanka Medium Business Market Opportunity Assessment” and “2011-12 Sri Lanka Large Business Market Opportunity Assessment.” These studies track a broad spectrum of issues pertaining to the adoption and usage of information technology and communications (ICT) solutions. Products and services covered in these studies include Computing, Networking, Software, Internet, Services, Storage and Security. Further, the studies encompass detailed firmographics, critically important technology attitudes, and strategic planning priorities.

For more information about these studies, e-mail njalan@ami-partners.com.

For more information about our other studies, AMI-Partners, or our global SMB research, call 212-944-5100, e-mail ask_ami@ami-partners.com.