“A Study on Small Business in Cloud Technology with reference to IT

Industry”

UNDER SUPERVISION OF
…………………………….

SUBMITTED BY
NAME: …………………………….
ROLL NUMBER: ………………….
in partial fulfillment of the requirements
for the award of the degree
Of
MBA

1
 DECLARATION

I hereby declare that the Project entitled “A study on Small business in cloud with reference to
IT industry” developed and submitted by me for the partial fulfillment of the award of the degree
of “MBA (Master of Business Administration in ………………………….)” is my original work
and the project has not formed the basis for award of any other degree, diploma, associateship,
fellowship or any other similar titles or prizes.

Date: ………………..

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Registration No.: ………………

2
 BONAFIDE CERTIFICATE

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to IT industry” is the bonafide research work carried out by “your name” student of MBA (Master
of Business Administration in ……………………..) 4th Semester, of this institute, during the
session 2015-2017, in partial fulfillment of the requirements for the award of the Degree of MBA
(Master of Business Administration in ………………………..). The above said project is
approved and is acceptable in quality and form.

3
 GUIDE’S CERTIFICATE

This is to certify that the Project report entitled “A study on Small business in cloud with
reference to IT industry” is a bonafide record of independent research work done by ……………
YOUR NAME………., (Reg. No: ……………………..) under my guidance and supervision
during the year xxx submitted to the Sikkim Manipal University in partial fulfillment for the award
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previously formed the basis for the award of any other degree, diploma, and Associate ship,
Fellowship or other title

Date: …………………..

4
 ACKNOWLEDGEMENT

This report has been made possible due to invaluable support of a number of people to whom I owe
my heartfelt gratitude and without whose help, I may not have been able to complete this report.
With regard to my Project with on “A study on Small business in cloud with reference to IT
industry”, I would like to thank each and every one who offered help, guidelines, and support
whenever required.
I am extremely grateful to my Institute guide, ………..NAME OF GUIDE……….. and all the
faculty member of my college for their valuable suggestions and able guidance.
I acknowledge the help and cooperation received from all the faculty members of XXXX. Several
colleagues and students have contributed directly and indirectly to the contents this software, as
they had given me numerous ideas. Their criticism gave me the much-needed hints about the areas
that needed elaboration and amendments and also to present them with greater clarity.
Finally, I wish to express my sincere thanks to all my family members, especially my Parents for
their constant moral support and Encouragement. I would Welcome Constructive Suggestions to
improve this software, which can be implemented in my further attempts.

Thanking you!

…………….YOUR NAME………….
Enrollment No. ………………….

5
 TABLE OF CONTENTS

Chapter Title Page No

1 Introduction towards topic 08-14

Introduction to Cloud Computing 09

Cloud Computing basics 11

Services 11

2 Industry Profile 15-34

Introduction 16

Definition of SSI’s 17

Problems of SSI’s 21

Sickness in SSI’s 23

All India Institutions 24

SWOT Analysis of SSI’s 33

3 Conceptual Discussion 35-39

Review of literature 36

Statement of problem 39

Objectives of the study 39

4 Research Methodology 40-43

5 Data analysis and interpretation 44-64

Tabular Presentation 61

6 Suggestions and Recommendations 66

7 Findings and Conclusions 68

8 70
Bibiliography and Questionnaire

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 ABSTRACT

Cloud services characterize all variety of IT capability that is offered by the cloud service hosting
to cloud service consumers. Cloud Computing networks access to a shared pool of configurable
networks, servers, storage, applications, services, and other computing resources that can be
rapidly provisioned and released with least management effort or service provider interaction. In
modern era of Information Technology, the accesses to all information related to a business activity
in large scale manufacturing units can be made available at threshold, by certain checks and
balances. The maximum population of Indian manufacturing not only comes from small and
medium scale industry but also such companies contributes maximum share to Indian GDP. Large
scale industries and O.E.Ms are in a position to spend as well are spending the required budget on
IT(Information Technology) and control various costs and inventories on day–to-day basis by
incorporating latest system software ( For example ERP’s ,SAP, Sales Force)etc. The small and
medium scale industries lacks in using such software because it’s of high fixed, operating costs and
its privacy. Cloud computing is an emerging technology where serve is maintained by parent
software company and domains are to be shared. In case parent host company charges reasonably
affordable cost and encrypts the confidential data and stores it such that only authenticated users
can access the data and ensures the security, safety and confidentiality of data, it can revolutionize
the Medium and small scale industry users in enhancing the overall business performance. This
research paper has been aimed at exploring the possibilities for implementing the cloud computing
technology for improving the overall business performance for medium and small scale industries
in India.

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 CHAPTER 1

INTRODUCTION TOWARDS TOPIC

8
 INTRODUCTION

Industry experts have long known that, once information technology got to be fast and reliable
enough; the world's computing infrastructure would come to resemble the electricity infrastructure.
In organizational terms, the requirement for IT is now predominantly driven by business advantage
rather than technical novelty. The process of skirting unwanted expenses form business for
improving the bottom-line has been the main agenda of companies but not at the cost of quality.
Many business managers are always occupied in cost reduction programs for improving the
efficiency in operation more efficiently. The Information Technology sector contributed 7.5
percent to the Indian GDP in 2012 and remained underutilized. Indian manufacturing Industry,
maximum population comes from medium and small scale industries. Thought, O.E.M’s and Tier-
1 companies, being financially sound, have adopted ICT to a considerable extent yet it is not
predominant in Medium and small scale industries due to lack of resources for its implementation
and subsequent maintenance. The revolution in information systems are redefining the business
strategies and redesigning the new scientific methods contributing in improving the organizational
performance by fast transfer of decisive information. Having being played a significant role in
enhancing the bottom-line, still there exist big gaps between IT and its usage for better economics
in manufacturing industry. Till recent past, IT was in the hands of vertically integrated firm using
microprocessor for provisioning the solutions like IBM.
In present era post 2000, many smaller firms have positioned itself for providing IT solutions to
manufacturing industries which not only lessen the workloads but also contributes to cost reduction
and enhancing business performance. The prime benefits are being realized by large scale
industries and the IT is yet to enter the densely populated medium and small scale manufacturing
units. Cloud computing where server is at host company can be used by small scale manufacturing
units the performance of MSI(Medium Scale Industries)and SSI(Small Scale Industries), has to
play a pivotal role in improvement. It (cloud computing) represents a shift away from computing as
a product that is purchased, to computing as a service that is Delivered Faced with one of the worst
economic downturns in recent times, MSI’s and SSI’s are concentrating on cost reductions for
being into the market. The Credit Crunch is also affecting day today working for some time now.
Organizational budgets are being frozen and for making the liquidity available which is still a
problem. Almost all organizations have cost reduction programs in place to control their spending.
For doing these, average manufacturers are shifting to lean manufacturing exploiting the
advantages of R&D, putting spot solutions in place, and last, implementing product lifecycle
management, all duly supported by Information Technology can further make it irreversible. The
days of the dedicated machines are gone and bottom-line has to be created not made. Optimal
usage of cost reduced IT (cloud computing) can bring about the cultural changes and benefit the
9
organization in retracing ongoing business performances. We argue that by redefining the reach of
cloud computing to MSI and SSI can prove to be a transformation driver for the performance,
growth, efficiency and competitiveness of such firms contributing maximum to the GDP of Indian
Economy.
Finally, as the developments in IT itself, ambitious strategic agenda in terms of technology,
clouding, agility, usages and standards together with cultural change have created new
opportunities for Medium and Small Scale manufacturing companies. We place this study selected
for cloud computing within this context. . This paper is aimed at drawing the initiatives to be taken
so as to make cloud computing as friendly tool for improving the performances of manufacturing
units in MSI and SSI.

Introduction to Cloud Computing:

Cloud computing is a recently evolved computing terminology or metaphor based on utility and
consumption of computing resources. Cloud computing involves deploying groups of remote
servers and software networks that allow centralized data storage and online access to computer
services or resources. Clouds can be classified as public, private or hybrid.
Cloud computing relies on sharing of resources to achieve coherence and economies of scale,
similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing
is the broader concept of converged infrastructure and shared services.
Cloud computing, or in simpler shorthand just "the cloud", also focuses on maximizing the
effectiveness of the shared resources. Cloud resources are usually not only shared by multiple users
but are also dynamically reallocated per demand.

History

The Cloud is a metaphor for the Internet, derived from its common depiction in network diagrams
(or more generally components which are managed by others) as a cloud outline. The underlying
concept dates back to 1960 when John McCarthy opined that "computation may someday be
organized as a public utility" (indeed it shares characteristics with service bureaus which date back
to the 1960s) and the term The Cloud was already in commercial use around the turn of the 21st
century. Cloud computing solutions had started to appear on the market, though most of the focus
at this time was on Software as a service.
2007 saw increased activity, including Goggle, IBM and a number of universities embarking on a
large scale cloud computing research project, around the time the term started gaining popularity in
the mainstream press. It was a hot topic by mid-2008 and numerous cloud computing events had
been scheduled.

10
Cloud Computing Basics
Cloud computing is a paradigm of distributed computing to provide the customers on-demand,
utility based computing services. Cloud users can provide more reliable, available and updated
services to their clients in turn. Cloud itself consists of physical machines in the data centers of
cloud providers. Virtualization is provided on top of these physical machines. These virtual
machines are provided to the cloud users. Different cloud provider provides cloud services of
different abstraction level. E.g. Amazon EC2 enables the users to handle very low level details
where Google App-Engine provides a development platform for the developers to develop their
applications. So the cloud services are divided into many types like Software as a Service, Platform
as a Service or Infrastructure as a Service. These services are available over the Internet in the
whole world where the cloud acts as the single point of access for serving all customers. Cloud
computing architecture addresses difficulties of large scale data processing.

Types of Cloud
Cloud can be of three types.
1. Private Cloud: This type of cloud is maintained within an organization and used solely for their
internal purpose. So the utility model is not a big term in this scenario. Many companies are
moving towards this setting and experts consider this is the 1st step for an organization to move
into cloud. Security, network bandwidth are not critical issues for private cloud.
2. Public Cloud: In this type an organization rents cloud services from cloud providers on-demand
basis. Services provided to the users using utility computing model.
3. Hybrid Cloud: This type of cloud is composed of multiple internal or external cloud. This is the
scenario when an organization moves to public cloud computing domain from its internal private
cloud.

Types of services:

These services are broadly divided into three categories:

 Infrastructure-as-a-Service (IaaS)
 Platform-as-a-Service (PaaS)
 Software-as-a-Service (SaaS)

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  Infrastructure-as-a-Service (IaaS):
Infrastructure-as-a-Service (IaaS) like Amazon Web Services provides virtual servers with unique
IP addresses and blocks of storage on demand. Customers benefit from an API from which they
can control their servers. Because customers can pay for exactly the amount of service they use,
like for electricity or water, this service is also called utility computing.

 Platform-as-a-Service (PaaS):
Platform-as-a-Service (PaaS) is a set of software and development tools hosted on the provider's
servers. Developers can create applications using the provider's APIs. Google Apps is one of the
most famous Platform-as-a-Service providers. Developers should take notice that there aren't any
interoperability standards (yet), so some providers may not allow you to take your application and
put it on another platform.

 Software-as-a-Service (SaaS):
Software-as-a-Service (SaaS) is the broadest market. In this case the provider allows the customer
only to use its applications. The software interacts with the user through a user interface. These
applications can be anything from web based email, to applications like
Twitter or Last.fm.

Cloud Stakeholders
To know why cloud computing is used let's first concentrate on who use it. And then we would
discuss what advantages they get using cloud. There are three types of stakeholders cloud
providers, cloud users and the end users. Cloud providers provide cloud services to the cloud users.
These cloud services are of the form of utility computing i.e. the cloud users uses these services
pay-as-you-go model. The cloud users develop their product using these services and deliver the
product to the end users.

Advantages of using Cloud

The advantages for using cloud services can be of technical, architectural, business
etc.
1. Cloud Providers' point of view
(a) Most of the data centers today are under-utilized. They are mostly 15% utilized. These data
centers need spare capacity just to cope with the huge spikes that sometimes get in the server
usage. Large companies having those data centers can easily rent those computing power to other
organizations and get profit out of it and also make the resources needed for running data center
(like power) utilized properly.
12
(b) Companies having large data centers have already deployed the resources and to provide cloud
services they would need very little investment and the cost would be incremental.

2. Cloud Users' point of view

(a) Cloud users need not to take care about the hardware and software they use and also they don't
have to be worried about maintenance. The users are no longer tied to someone traditional system.
(b) Virtualization technology gives the illusion to the users that they are having all the resources
available.
(c) Cloud users can use the resources on demand basis and pay as much as they use. So the users
can plan well for reducing their usage to minimize their expenditure.
(d) Scalability is one of the major advantages to cloud users. Scalability is provided dynamically to
the users. Users get as much resources as they need. Thus this model perfectly fits in the
management of rare spikes in the demand.

Motivation towards Cloud in recent time

Cloud computing is not a new idea but it is an evolution of some old paradigm of distributed
computing. The advent of the enthusiasm about cloud computing in recent past is due to some
recent technology trend and business models.
1. High demand of interactive applications: Applications with real time response and with
capability of providing information either by other users or by nonhuman sensors gaining more and
more popularity today. These are generally attracted to cloud not only because of high availability
but also because these services are generally data intensive and require analysing data across
different sources.
2. Parallel batch processing: Cloud inherently supports batch-processing and analysing tera-bytes
of data very efficiently. Programming models like Google's map-reduce [18] and Yahoo!'s open
source counterpart Hadoop can be used to do these hiding operational complexity of parallel
processing of hundreds of cloud computing servers.
3. New trend in business world and scientific community: In recent times the business
enterprises are interested in discovering customer’s needs, buying patterns, supply chains to take
top management decisions. These require analysis of very large amount of online data. This can be
done with the help of cloud very easily. Yahoo! Homepage is a very good example of such thing.
In the homepage they show the hottest news in the country. And according to the users' interest
they change the ads and other sections in the page. Other than these many scientific experiments
need very time consuming data processing jobs like LHC (Large Hadron Collider). Those can be
done by cloud.

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4. Extensive desktop application: Some desktop applications like Matlab, Mathematica are
becoming so compute intensive that a single desktop machine is no longer enough to run them. So
they are developed to be capable of using cloud computing to perform extensive evaluations.

14
 CHAPTER 2

INDUSTRY PROFILE

15
 INTRODUCTION
There is a growing recognition worldwide that small and medium enterprises (SMEs) have an
important role to play in the present context given their greater resource-use efficiency, capacity
for employment generation, technological innovation, promoting inter-sectoral linkages, raising
exports and developing entrepreneurial skills. Their locational flexibility is an important advantage
in reducing regional imbalances. The future of SMEs is of major policy concern given their
strategic importance in any discussion of reshaping the industrial sector. This is more so in the case
of India, which has one of the longest histories of government support to the small-scale industrial
sector since independence compared to most developing countries.

Definitions of Micro, Small & Medium Enterprises

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED)
Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of

goods pertaining to any industry specified in the first schedule to the industries (Development and
regulation) Act, 1951). The Manufacturing Enterprise are defined in terms of investment in Plant &
Machinery.

(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are
defined in terms of investment in equipment.
The limit for investment in plant and machinery / equipment for manufacturing / service
enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under:

Manufacturing Sector

    Enterprises  Investment in plant & machinery

    Micro Enterprises  Does not exceed twenty five lakh rupees

    Small Enterprises  More than twenty five lakh rupees but does not
exceed five crore rupees

    Medium  More than five crore rupees but does not exceed
Enterprises ten  crore rupees

Service Sector

    Enterprises  Investment in equipments

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     Micro Enterprises  Does not exceed ten lakh rupees:

    Small Enterprises  More than  ten lakh rupees but does not exceed
two crore rupees

    Medium  More than two crore rupees but does not exceed
Enterprises five core rupees

Definition
In the Indian context, we have not so far defined medium enterprises clearly. What is neither small
nor large is being loosely defined as medium. Further, enterprise encompasses businesses, services
and industries. In the broadband of ' small', the discussion extends to medium as well. Another
possible connotation for the SMEs is the small manufacturing enterprises.
Small and medium enterprises, both in size and shape, are not uniform across the globe. This
asymmetry comes in the way of any effort of their integration. The way they are defined depends
on the stage of economic development and the broad policy purposes for which the definition is
used. According to a World Bank study, there are said to be more than 60 definitions of small and
medium industries used in 75 countries surveyed (cited in Kim Seung Jin and Suh Jang-Won,
1992, 9). The most commonly used definitions relate to either size of employment and/or quantum
of capital investment /fixed assets. As the process of economic development leads to changes in
industrial sector shares in GDP and the contribution of sub-sectors within industry, the definition is
extended to include not only manufacturing industries but all enterprises which fall within or below
the defined cut-off point. In the ASEAN countries in general, the definition is restricted to SMIs in
the manufacturing sector only, whereas in the OECD group, the definition is broadened to include
all Small and Medium Enterprises.
In India, small-scale industries (SSIs) were given due importance in the process of industrialization
as far back as 1951 when post-independence economic planning was initiated. The Industries
Development and Regulation Act legislated by the Centre in that year, became the framework for
the small-scale industrial sector's development. The Act determined licensing policies for the sector
and the reservation of products, among several other important provisions. The definition of small-
scale industries is mainly in terms of investment ceilings which have changed over the years to
keep pace with economic development. Though employment and turnover are also used to define
small industries, as these indicators are implicit in the requirement for registration under the
Factories Act, the core definition of SSIs in India remains based on investment limits - "historical
costs of plant and machinery."
17
Therefore, the contribution of SME sector to the GDP in different countries is not on comparable
parameters. Still, in both developed and developing economies, they were accorded special status,
specific dispensations and particular attention. Although the broad canvas of "enterprise" suggests
that we look at the contribution of both industry and trade, more particularly exports, in the growth
of GDP, lack of separate data on SME's contribution in the developed economies like the US,
Canada, Japan and Germany restricted the scope of this paper to having a look at some policy
interventions in ASEAN and OECD economies.

The Ministry of Micro, Small and Medium Enterprises is the nodal Ministry for formulation of
policies, programmes and schemes, their implementation and related co-ordination, for the
promotion and development of small scale industries in India. The role of the Ministry is to assist
the States in their efforts for the growth of the small scale sector, by enhancing their
competitiveness in an increasingly liberalised economy. It is assisted by an attached office and two
public sector enterprise, namely:-
 Micro, Small and Medium Enterprises Development Organisation (MSME-DO):- The
Office of the Development Commissioner (Micro, Small and Medium Enterprises) [earlier
known as the O/o the DC (SSI)] is also known as Micro, Small and Medium Enterprises-
Development Organisation (MSME-DO). It is the apex body for assisting the Government
in formulating, coordinating, implementing and monitoring policies and programmes for
micro, small and medium enterprises (MSMEs) in the country. MSME-DO provides a
comprehensive range of common facilities, technology support services, marketing
assistance, entrepreneurial development support, etc.
 National Small Industries Corporation Ltd (NSIC):- was established by the Government
with a view to promoting, aiding and fostering the growth of micro, small and medium
enterprises in the country, with a focus on commercial aspect of their operations. It
implements several schemes to help the MSMEs in the areas of raw material procurement,
product marketing, credit rating, acquisition of technologies, adoption of improved
management practices, etc.
 Khadi and Village Industries Commission (KVIC):- established under the Khadi and
Village Industries Commission Act, 1956, as a statutory organisation engaged in promotion
and development of khadi and village industries for providing employment opportunities in
the rural areas.
 Coir Board:- is a statutory body, established under the Coir Industry Act, 1953, for the
promotion and development of coir industry in India as well as for uplifting the living
conditions of the workers engaged in this industry.

18
Also, a National Commission on Enterprises in the Unorganised Sector (NCEUS) has been set up
for addressing the wide range of issues affecting the productive potential of the unorganised micro
and small productive units.
Besides, there are three national level 'Entrepreneurship Development Institutes (EDIs)' for the
development of training modules, undertaking research and providing consultancy services for
entrepreneurship development in the small scale sector. These include:-
 National Institute of Small Industry Extension Training (NISIET) renamed as the National
Institute for Micro, small and Medium Enterprises (NIMSME) at Hyderabad
 National Institute of Entrepreneurship and Small Business Development (NIESBUD) at
Noida
 Indian Institute of Entrepreneurship (IIE) at Guwahati.
The “Micro, Small and Medium Enterprises Development (MSMED) Act, 2006” is the first single
comprehensive legislation in India, covering micro, small and medium enterprises. Under the Act,
the terms "medium sector" and "micro enterprises" have been defined for the first time. Also, the
concept of ‘Industries’ has been widened to that of ‘Enterprises’. Enterprises have been classified
broadly into two categories, namely, enterprises engaged in the manufacture/production of goods
pertaining to any industry; and enterprises engaged in providing/rendering of services. The term
"enterprise" has been defined in terms of investment in plant and machinery/ equipment (excluding
land & building). Accordingly, the definition of micro, small and medium enterprise is:-

Investment in plant and machinery/ equipment (excluding

 
land and building)

  Manufacturing Enterprises Service Enterprises

Micro Up to Rs. 25 lakh Up to Rs. 10 lakh

More than Rs. 25 lakh and up More than Rs. 10 lakh and up
Small
to Rs. 5 crore to Rs 2 crore

More than Rs. 5 crore and up to More than Rs. 2 crore and up
Medium
Rs. 10 crore to Rs. 5 crore

In order to protect, support and promote small enterprises as also to help them become self-
supporting, a number of protective and promotional policy measures have been undertaken by the
Government. The promotional measures cover:- (i) industrial extension services; (ii) institutional
support in respect of credit facilities; (iii) provision of training facilities; (iv) supply of machinery
on hire-purchase terms; (v) assistance for domestic marketing as well as exports; (vi) technical
consultancy and financial assistance for technological upgradation; etc.

19
The Reservation Policy is the most important policy of the Government for the sector. It has the
twin objectives of ensuring increased production of consumer goods in the small scale sector; and
expanding employment opportunities through setting up of small scale industries. Reservation of
items for exclusive manufacture in SSI sector is statutorily provided for in the Industries
(Development and Regulation) Act, 1951. The overwhelming consideration for reservation of an
item is its suitability and feasibility for being made in the small scale sector without compromising
the quality aspect. But, with a view to providing to the sector, opportunities for technological
upgradation, promotion of exports and economies of scale, items so reserved have been de-
reserved from time to time. The issue of reservation/de-reservation of product is examined on a
continual basis by an Advisory Committee on Reservation constituted under the Act. During the
year 2006-07, 180 items reserved for manufacture in small scale industries have been de-reserved.
As on 13th March, 2007, 125 items were de-reserved and as on 8th February, 2008, 79 more were
de-reserved. At present, the total number of items reserved for exclusive manufacture in the micro
and small scale sector are 35.
Recognising the role of credit for the small scale sector, a focused credit policy has been in place
since the early days. Priority sector lending is its most important component. Under it, banks are
compulsorily required to ensure that defined percentage of their overall lending is made to the
priority sectors, which includes small industries. As a part of the institutional arrangement, Small
Industries Development Bank of India (SIDBI) has been set up as the apex refinance bank. Term
loans are provided by State Financial Corporations (SFCs) and Scheduled Banks.
The other important policies for the sector relate to:- (i) excise duty; (ii) foreign direct
investment approval and labour laws.
Besides, several schemes and programmes have been undertaken by the Government with the aim
of facilitating access to:- (i) adequate credit from financial institutions; (ii) funds for technology
upgradation and modernisation; (iii) integrated infrastructural facilities; (iv) modern testing
facilities and quality certification laboratories; (v) modern management practices, entrepreneurship
development and skill upgradation through appropriate training facilities; etc. The schemes so
announced include:-
 Tax Holiday Scheme
 Composite Loan Scheme
 Industrial Estate Scheme
 Scheme for International Cooperation
 Scheme of Surveys, Studies and Policy Research
 Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
 Scheme of Product Development, Design Intervention and Packaging (PRODIP)
 Scheme of Khadi Karigar Janashree Bima Yojana for Khadi Artisans
20
  Scheme of Interest Subsidy Eligibility Certification (ISEC)
Small Industry Development Organisation also operates a number of schemes for the sector:-
 Credit Linked Capital Subsidy Scheme for Technology Upgradation
 Credit Guarantee Fund Scheme for Small Industries
 ISO 9000/ISO 14001 Certification Reimbursement Scheme
 Scheme for reimbursement of fees to adopt barcoding
 Integrated Infrastructure Development (IID Scheme)
 Scheme for setting up of Mini Tool Rooms
 Scheme for setting up of testing centres
 Scheme for Market Development Assistance (MDA) for SSI exporters
 Assistance for Strengthening of Training Infrastructure of existing and new
Entrepreneurship Development Institutions
 Scheme of Micro Finance Programme
National Small Industries Corporation Ltd (NSIC) schemes for small scale industries relate to:-
 Bill Financing
 Working Capital Finance
 Export Development Finance
 Equipment Leasing Scheme
 Raw Materials Procurement Support
 Marketing Assistance Programme and Exports Assistance;
 Stores Purchase Programme
 Single Point Registration Scheme and other services.

Problems of SSIs
Small-scale industries in India could not progress satisfactorily due to various problems that they
are confronted with while running enterprises. In spite of having huge potentialities, the major
problems, small industries face are given below.
1. Problem of skilled manpower:
The success of a small enterprise revolves around the entrepreneur and its employees, provided the
employees are skilled and efficient. Because inefficient human factor and unskilled manpower
create innumerable problems for the survival of small industries. Non-availability of adequate
skilled manpower in the rural sector poses problem to small-scale industries.
2. Inadequate credit assistance:

21
Adequate and timely supply of credit facilities is an important problem faced by small-scale
industries. This is partly due to scarcity of capital and partly due to weak creditworthiness of the
small units in the country.
3. Irregular supply of raw material:
Small units face severe problems in procuring the raw materials whether they use locally available
raw materials or imported raw materials. The problems arise due to faulty and irregular supply of
raw materials. Non-availability of sufficient quantity of raw materials, sometimes poor quality of
raw materials, increased cost of raw materials, foreign exchange crisis and above all lack of
knowledge of entrepreneurs regarding government policy are other few hindrances for small-scale
sector.
4. Absence of organised marketing:
Another important problem faced by small-scale units is the absence of organised marketing
system. In the absence of organised marketing, their products compare unfavourably with the
quality of the product of large- scale units. They also fail to get adequate information about
consumer's choice, taste and preferences of the type of product. The above problems do not allow
them to stay in the market.
5. Lack of machinery and equipment:
Small-scale units are striving hard to employ modern machineries and equipment in their process
of production in order to compete with large industries. Most of the small units employ outdated
and traditional technology and equipment. Lack of appropriate technology and equipment create a
major stumbling block for the growth of small-scale industries.
6. Absence of adequate infrastructure:
Indian economy is characterized by inadequate infrastructure which is a major problems for small
units to grow. Most of the small units and industrial estates found in towns and cities are having
one or more problems like lack of of power supply, water and drainage problem, poor roads, raw
materials and marketing problem.
Thus absence of adequate infrastructure adversely affect the quality, quantity and production
schedule of the enterprises which ultimately results in under-utilization of capacity.
7. Competition from large-scale units and imported articles:
Small-scale units find it very difficult to compete with the product of large-scale units and
imported articles which are comparatively very cheap and of better quality than small units
product.
8. Other problems:
Besides the above problems, small-scale units have been of constrained by a number of other
problems also. They include poor project planning, managerial inadequacies, old and orthodox

22
designs, high degree of obsolescence and huge number of bogus concerns. Due to all these
problems the development of small-scale industries could not reach a prestigious stage.

Sickness in SSIs
Sickness in the industrial units is not a new phenomenon as is evident in the developing countries.
Even in the industrially advanced countries of the world, varying degrees of sickness are found to
occur. An industrial unit may face a number of odds during its implementation and operation stage
because of a number of factors in the environment – internal and external. If the problems
perpetuate & does not permit the unit to pursue the normal course of operations leading to
reasonable utilization of capacity, generation of surplus, debt servicing, etc, it can be presumed that
some kind of sickness has engulfed the unit and if this trend grows unchecked, it would adversely
affect production and employment in the country besides other socio-economic repercussions.
However, it is also recognised that in a market economy, the survival of the fittest and weeding out
of inefficient industrial units is a natural outcome which is considered useful as well. Because the
exit of the non-competitive and loss-incurring units should not pose difficulty to any society. But
sickness assuming an epidemic shape creates concerns to the policy makers and stakeholders.
Experience suggests that small scale industries are more prone to sickness as compared to medium
and large scale industries. In this context, sickness in small industry should not be left only to the
market forces. Creation of objective conditions and enabling environment through suitable policy
support are essential for sustained growth of the small industry sector in the developing economies.
It is, therefore, imperative to diagnose the causes of sickness so that preventive measures are
suggested. Even if a small unit turns sick despite taking all possible precautionary measures, efforts
should be made to find out the possibility of its revival. This warrants appropriate package of
restructuring and rehabilitation strategies. If the unit’s survival is still under threat, it should be
better allowed to die a natural death.
Though the Small Scale industries in India have been growing constantly over the years there has
been a gradual increase in the incidence of sickness in Small Scale Industries.
The definition of sick industries has been undergoing changes. The Reserve Bank of India (RBI)
was instrumental in appointing commities from time to time to look into the issues of sickness
affecting the sector. The latest definition of sickness given by the working group on rehabilitation
of sick units set up by the RBI ( Kohli comitte) is given below:-
“A small scale industrial is considered sick when
(a) If any of the borrowal accounts of the unit remains substandard for more than six months, i.e.,
the principal or interest, in respect of any of its borrowal accounts has remained overdue for a
period of exceding one year will remain unchanged even if the present period for classification of
an account as an substandard is reduced in due course;

23
 OR
(b) There is erosion in the net worth due to accumulated losses to the extent of 30% of its net worth
during the previous accounting year, and
(c) The unit has been in commercial production for atleast two years.”

Institutional Support: Government has recognized the important role of entrepreneurs in the
industrial development of the country, especially through the small scale industries (SSIs). SSIs are
essential for Indian economy in terms of employment generation, foreign exchange earnings, its
share in industrial output, and contribution to national income. The government of India and state
governments provides a number of
special facilities and incentives. The incentives not only motivate entrepreneurs to set up industries
in the small scale sector, but also strengthen the entrepreneurial base in the economy. The new
entrepreneurs face a number of problems on account of inadequate infrastructure facilities and
other support services.
The government offers a package of services through its specialized institutions and motivates
entrepreneurs to take advantage of the various facilities and establish enterprises and flourish. This
package includes assistance in obtaining finance, help in marketing, technical guidance, training,
and technology up gradation etc. It is hoped that institutional incentives would play a key role in
the promotion of small enterprises and ensure their self-sustained growth.

In order to facilitate the growth of small scale sector, the central and state
governments have created an elaborate institutional framework in the country. The institutions
providing assistance to small scale industries are broadly classified as “ All India Institutions “, “
State Level Institutions” and “Fund-Based Institutions”.

1. All India Institutions

(i) Small scale industries Board: SSI Board is the apex non-statutory advisory body
constituted by the Government of India to render advice on all issues pertaining to the
SSI sector. It provides a forum to its members for interaction to facilitate co-operation
and inter-institutional linkages and to render advice to the Government on various
policy matters, for the development of the sector.
The Board was first constituted in 1954. Its term is for two years. The Board was last
constituted on 18th January 2003, with 101 members and held its 48th meeting on 17
January, 2004.
24
 (ii) Ministry of Small Scale Industries. The process of liberalization and market reforms
has created wide-ranging opportunities of the development of small scale industries. At
the same time, changing world scenario has thrown up new challenges to the very
existence of this sector. The need of the hour is to suitably strengthen the sector so that
it could adapt itself to the changed environment and face the challenges boldly and
effectively.
The implementation of policies and various programmes/schemes for providing
infrastructure and support services to small enterprises is undertaken through its
attached office, namely the Small Industries Development Organization (SIDO),
statutory bodies/other organizations like Khadi and Village Industries Commission
(KVIC) & Coir Board, National Small Industries Corporation (NSIC) and three training
institutes- National Institute of Small Industry Extension Training (NISIET),
Hyderabad, Indian Institute for Entrepreneurship (IIE), National Institute for
Entrepreneurship and Small Business Development (NIESBUD)
(iii) Small Industries development organization (SIDO): The Office of the Development
Commissioner (Small Scale Industries) is also known as the Small Industry
Development Organization (SIDO). It is an apex body, established in 1954, for assisting
the Ministry in formulating, coordinating, implementing and monitoring policies and
programmes for the promotion and development of small scale industries. It has over 60
offices and 21 autonomous bodies under its management, including Tool Rooms,
Training Institutions and Project-cum-Process Development Centres etc.

Functions of such main bodies are as follows:-

a) Small Industries Service Institutes (SISIs) are operational one in each state. They provide
technical support and consultancy services, conduct entrepreneurship development programmes,
and export promotion and liaison activities Emphasizes is also placed on implementation of
programmes on modernization, energy conservation, quality control /upgradation and pollution
control for the benefit of entrepreneurs.
b) Regional Testing Center (RTC) provides Testing facilities for product
quality upgradation.
c) Tool Rooms/Tool Design Institutes (TRs/TDI) assist SSIs in technical
upgradation, and provide good quality tooling by designing and producing
tools, moulds, jigs & fixtures, components, etc.
d) Product-cum-Process Development Centres (PPDCs) look into their
specific problems and render technical service.

25
e) Central Footwear Training Institutes (CFTIs) develop footwear designing to promote exports.
f) Sub-Contract Exchanges for Ancillary Development (SCXs) register and create database of the
spare manufacturing/service capacity of SSI; create database of requirements of large/medium
units and match the requirements with the spare capacity available with small units; and arrange
Buyer-Seller Meets, organise vendor exhibitions, seminar, workshops for large-small units
coordination, quality upgradation, export promotion, etc and facilitate flow of data on vendor
development.

Thus, the main services rendered by DC SSI office are:

a) Advising the Government in policy formulation for the promotion and development of small
scale industries.
b) Providing techno-economic and managerial consultancy, common facilities to small scale units.
c) Providing facilities for technology upgradation, modernisation, quality improvement and
infrastructure.
d) Developing Human Resources through training and skill upgradation.
e) Providing economic information services.
f) Maintaining a close liaison with the Central Ministries, Planning Commission, State
Governments, Financial Institutions and other Organisations concerned with development of Small
Scale Industries.
g) Evolving and coordinating policies and programmes for development of Small Scale Industries
as ancillaries to large and medium scale industries.
h) Monitoring of Prime Minister Rozgar Yojna (PMRY) Scheme.

(iv) National Small Industries Corporation:

The National Small Industries Corporation Ltd. was set up in 1955 with a view to promoting,
aiding and fostering the growth of small scale industries in the country with focus on
commercial aspects of these functions. NSIC continues to implement its various programmes
and projects throughout the country to assist the SSI units.

The Corporation has been assisting the sector through the following schemes and activities:
a) Composite Term Loan Scheme
To promote small-scale sector, NSIC has launched a Composite Term Loan Scheme for the benefit
of existing and prospective entrepreneurs to acquire land and building, machinery and equipment
and working capital under one roof to the tiny units.

26
b) Hire Purchase Scheme:
Supply of indigenous and imported machinery and equipment on easy financial terms with special
focus on women entrepreneurs, weaker sections, handicapped and ex-servicemen and SC/ST
entrepreneurs.
c) Equipment leasing
It is done mainly to facilitate SMEs to expand their capacities or diversify and/or upgrade their
technology according to the needs of the market.
d) Working Capital Finance
This Scheme aims at augmenting working capital of viable and well managed units, on selective
basis in case of emergent requirements to enable them to pay-off their purchase of consumable
stores, spares and production related overheads particularly electricity bills, statutory dues.

e) Raw Material Assistance

It facilitates availability of scarce raw material either through the domestic market or by importing.
f) Marketing Support Programme
NSIC has been trying to act as a major agency to bring SMEs closer to various Governmental
purchasing agencies, with the intention of creating confidence in the purchasing agencies about
SMEs, and their capabilities to supply goods and services of requisite quality, economic prices and
adherence to agreed delivery schedules.
g) Tender Marketing
It participates in bulk local/global tender on behalf of Small Scale Industries/Enterprises. It is
aimed at assisting SSIs with the ability to manufacture quality products but which lack brand
equity & credibility or have limited financial capabilities.
h) Integrated Marketing Support
NSIC has been operating an Integrated Marketing Support Programme in which bills pertaining to
supplies made by small scale units to eligible purchasers are discounted by NSIC up to a certain
specified limit.
i) Government Stores Purchase Programme
The units registered with the Corporation for participation in government purchase programme are
considered at or with individual purchase organisations and derive all the benefits like free supply
of tender forms, exemption from payment of earnest money, security deposits, etc.
j) Technology Upgradation
Excellent technical support is provided to SSIs/SMEs through five NSIC Technical Service
Centres. These centres have been recognised by Council of Scientific and Industrial Research for

27
in-house R&D. NSIC has set up a Technology Transfer Centre. The latest information is provided
to on-line connections and networks of computers on matching technology seekers and technology
providers are arranged through the Technology Transfer Centre.
k) Software Technology Parks
NSIC has set up a NSIC-STP Complex under Software Technology Parks of India (STPI).
Software Technology Parks facilitates small scale units to establish their units for the 100% export
of software and also act as the major point to activate software exports directly through NSIC.
NSIC-STP Complex at Okhla, New Delhi is one of such Parks set up by the National Small
Industries Corporation under the Software Technology Parks of India to promote small
entrepreneurs in software development.
NSIC-STP provides high speed better communication facilities through VSNL/SATCOM
networks, built-up office space, and uninterrupted power supply, back-up power through DG sets, a
modern business centre and other administrative support.
l) Exports
NSIC is providing a complete package of export assistance, testing facilities, pre-shipment credit
facility, export incentives etc. apart from exposure to the products of SSEs in trade fairs, buyer and
seller meets etc. The Corporation has been endeavoring to increase share of Indian industries in
purchases to United Nations Organization, it being the largest single buyer in the world.

(5) The Khadi and Village Industries Comission (KVIC):

The Khadi and Village Industries Commission (KVIC) is a statutory body created by an Act of
Parliament in April 1957. The KVIC is supposed to do the planning, promotion, organisation and
implementation of programmes for the development of khadi and other village industries in the
rural areas in coordination with other agencies engaged in rural development wherever necessary.

(6) Coir Board:

Coir Board is a statutory body established by the Government of India under a legislation enacted
by the Parliament namely Coir Industry Act 1953 for the promotion and development of Coir
Industry in India as a whole.

(7) Training Institutes:

There are three National Level Training Institutes. These are:
National Institute of Small Industry Extension Training (NISIET), Hyderabad, which
undertakes operations ranging from training, consultancy, research and education, to extension and
information services.
National Institute for Entrepreneurship and Small Business Development
28
(NIESBUD), New Delhi, which conducts national and international level training programmes in
different fields and disciplines.
Indian Institute of Entrepreneurship (IIE), Guwahati was established to act as a channel for
entrepreneurship development with its focus on the North East.

2. State Level Institutions

State Level Institutions execute different promotional and developmental projects/schemes and
provide a number of supporting incentives for development and promotion of small scale sector in
their respective States. These are executed through State Directorate of Industries, who has District
Industries Centres (DICs) under them to implement Central/State Level schemes. The State
Industrial Development Corporations also look after the needs of the small-scale sector.

(i). State Industrial Development Corporations: Incorporated under the companies Act 1956
SIDC’s were set up in different states as wholly owned companies for promoting industrial
development in their respective states. The main functions of SIDC’s are as follows:
a) Providing term finance to all small, medium and large industrial enterprises set up in state.
b) Underwriting and directly subscribing to shares, and debentures of debentures of industrial
enterprises being set up in the state.
c) Preparing feasibility studies, conducting market surveys and motivating private entrepreneurs to
set up their industrial ventures in the state.
d) Collaborating with private entrepreneurs to set up industrial ventures in joint and assisted sector.
e) Implementing scheme of ‘Industrial Development Bank of India’ of seed capital in the state.

(ii) State Directorate of Industries: Under the constitution of India promotion and development
of small scale industries is a State subject. Therefore, the primary responsibility for implementation
of policies and programmes of assistance rests with the Directorate of Industries in each State. It
acts under the overall guidance of SIDO and concerned Central institutions. It performs both
regulatory and developmental functions. It functions through a network of District Industries
offices, industries offices and extension offices at district sub-division and block level respectively.

The main functions of Directorate of Industries are as follows:

a) Registration of small scale units
b) Providing financial assistance
c) Distributing scare and indigenous raw materials to industrial units
d) Granting essentiality certificates for import of raw material
e) Establishing industrial estates and industrial co-operatives
29
f) Developing industrial infrastructure
g) Undertaking industrial surveys and collecting information
h) Arranging concessions and incentives for industries.
i) Overall administration of village and small scale industries.
j) Maintaining liaison with other agencies for industrial development.

(iii) District Industries Centre: The District Industries Centers programme was launched in 1978
for effective promotion of cottage and small scale industries widely dispersed in rural areas and
small towns. These centers are the focal points providing all the services and support required by
small scale and village entrepreneurs under one roof. These serves as an integrated administrative
framework at the district level for industrial development.

The main functions of DIC’s are as follows:

a) It conducts surveys to know industrial potential of a district keeping in view the availability of
raw material, human skills, infrastructure, demand, etc.
b) It prepares an action plan for industrial development.
c) It appraises the various investment proposals received from entrepreneurs.
d) It guides and assists entrepreneurs in buying appropriate machinery and equipment and raw
material.
e) It suggests appropriate marketing strategies to entrepreneurs.
f) It maintains links with research and development institutions for upgradation of technology,
quality improvement, industrial training etc.
g) It conducts artisans training programmes.
h) It has been assigned operation responsibility for special schemes to provide self-employment to
educated unemployement

3. Fund Based Institutions

Of all the elements that go into a business, credit is perhaps the most crucial. The best of plans can
come to naught if adequate finance is not available at the right time. SSIs need credit support not
only for running the enterprise & operational requirements but also for diversification,
modernisation/ upgradation of facilities, capacity expansion etc. In respect of SSIs, the problem of
credit becomes all the more critical whenever any episodic event occurs such as a large order,
rejection of consignment, inordinate delay in payment etc. In general, SSIs operate on tight
budgets, often financed through owner's own contribution, loans from friends and relatives and
some bank credit.
30
Government of India recognised the need for a focused credit policy for SSIs in the early days of
promotion of SSIs and RBI has been instrumental in devising a multi-stage approach/financial
system for credit dispensation to different sectors of the economy, for example, agriculture,
industry, exports, SSIs etc.

(I) Small Industries Development Bank of India (SIDBI). The SIDBI was established in
1990 as the apex refinance bank. The SIDBI is operating different programmes and
schemes through 5 Regional Offices and 33 Branch Offices. The financial assistance of
SIDBI to the small scale sector is channelised through the two routes – direct and
indirect.
Indirect assistance
a) SIDBI’s financial assistance to small sector is primarily channelized through the existing credit
delivery system, which consists of state level institutions, rural and commercial banks.
b) SIDBI provides refinance to and discounts bills of Primarily Lending Institutions (PLI).
c) The assistance is available for
i. Marketing of SSI product
ii. Setting up of new ventures
iii. Availability of working capital
iv. Expansion
v. Modernisation
vi. Human resource development
vii. Diversification of existing units for all activities
Direct assistance
a) The loans are available for new ventures, diversification technology upgradation, modernization
and expansion of well-run small scale enterprises. Assistance is also available for private sector.
b) Small scale sector is eligible for maximum debt-equity ratio of 3:1
c) Foreign currency loan for import of equipment are also available to export oriented small scale
enterprises.
d) SIDBI also provide venture capital assistance to the entrepreneurs for their innovative ventures
if they have a sound management team, long term competitive advantage and a potential for above
average profitability leading to attractive return on investment.

New Initiatives of SIDBI

a) Two Subsidiaries viz. SIDBI Venture Capital Limited and SIDBI Trustee
Company Limited formed to oversee Venture Capital.

31
b) Technology Bureau for Small Enterprise formed to oversee Technology Transfer, Match making
Services, Finance Syndication and facilitating Joint Ventures.
c) SIDBI Foundation for Micro Credit has been launched to provide financial assistance to the poor
and to meet emerging needs of the micro finance sector especially in rural areas.

(ii) Commercial Banks: Credit requirement of SSIs is basically of two types – long term loans and
working capital. Commercial banks with their extensive network of branches operating nationwide
are primary channel for working capital requirement.
Banks are required to compulsory ensure that defined percentage (currently 40%) of their overall
lending is made to priority sectors as classified by RBI. These sectors include agriculture, small
industries, export etc. The inclusion of small industries in this list makes them eligible for this
earmarked credit. With the liberalisation of the Indian economy, greater emphasis was placed on
meeting the credit needs of SSIs. This was manifest through the following initiatives taken by RBI.
a) Credit for tiny sector has been earmarked within overall lending to small industries. In order to
ensure that credit is available to all segments of SSI sector, RBI has issued instructions that out of
the funds normally available to SSI sector, 40% be given to units with investment in plant and
machinery up to Rs.5 lakhs, 20% for units with investment between Rs.5 lakhs to Rs.25 lakhs and
remaining 40% for other units.
b) Public sector banks have been advised to operationalize more specialized SSI branches at
centres where there is a potential for financing many SSI borrowers. As on March 2002, 391
specialised SSI branches are working in the country.
c) 'Single Window Scheme' was extended to all districts to meet the financial requirements (both
term loan & working capital) of SSIs.
d) Laghu Udyami Credit Card (LUCC) Scheme was launched by Public Sector Banks for
providing simplified & borrower friendly Credit facilities to SSI, tiny enterprises retail traders &
artisans.
e) Composite loan limit was enhanced to Rs.30 lakhs from Rs.25 lakhs.
f) Limit on collateral free loans was increased to Rs.25 lakhs in deserving cases.

(iii) State Financial Corporations (SFCs): State Financial Corporation Act 1951 was brought
into force to enable all the state governments (except Jammu and Kashmir) to set up State
Financial Corporations as regional development banks. Presently following assistance is provided
to small scale and medium scale entrepreneurs or units:
a) Providing long term finance to industrial enterprises having sole proprietary, partnership,
company and co-operative society form of business organization.
b) Subscribing equity and debentures of industrial enterprises.

32
c) Providing financial assistance to small and medium enterprises engaged in service sector.
d) Provide working capital loans and meeting various short-term needs of their clients.

SWOT Analysis of the Small Scale Industry

After the detailed study of small scale sector, a SWOT analysis of this sector reveals its strengths
and weaknesses to meet the challenges thrown open by liberalization and globalization as well as
the opportunities available and threats faced by the sector in the new millennium.
a) STRENGTHS
• Flexible manufacturing systems.
• Lower cost of production.
• Low level of capital investment per unit of output and employment.
• Operational flexibility.
• High contribution to domestic production.
• Knowledge about internal markets.
• Ability to make adjustment in changing economic and trading scenario.
• Inherent ability to invent and innovate.
• Utilization of local resources.
• Location wise mobility
• Import substitution
b) WEAKNESSES
• Inadequate capital for investment/expansion.
• Inadequate working capital
• Expensive bank loans.
• Technologically weak.
• Absence of brand equity for made in India labels.
• Lack of development policy framework; relook at reservation policy.
• Lack of infrastructural facilities.
• Lack of professionalism.
• Lack of well-developed information system.
• Inability to face impact of WTO regime.

c) OPPORTUNITIES

33
• Untapped export potential in sectors such as computer software, leather and leather
products, light engineering products, hand tools and implements, auto components and ancillaries,
garments including hosiery, etc.
• Growing service sector.
• Security and stability of access under the WTO regime.
• Tariff reduction by all countries.
• Establish ‘Backward Forward Linkages’, both nationally and inter-nationally.
• Joint ventures.
• Technology up gradation.

d) THREATS
• Slow adoption of quality culture.
• Poor infrastructure support.
• Technological obsolescence.
• Inadequate use of information and communication technologies.
• International environmental agenda which is in stark contrast to low emphasis laid by
Indian firms.
• Non-compliance with non-tariff barriers particularly environmental, health and safety
standards.
• Growth of cheap imports.
• High cost of funds.

34
 CHAPTER 3

LITERATURE REVIEW

35
 REVIEW OF LITERATURE

For business decisions, availability of prompt and relevant information has always been the most
desirable. In this context, Jensen (1992), informational variables are pivotal for the structure of
organizations because the quality of decisions is determined by the quality of information available
to the decision maker Lewis (1996) argues: “professional and personal survival in modern society
clearly depends on our ability to take on board vast amounts of new information. Yet that
information is growing at an exponential rate”. Following Brynjyolfsson et al. (1994), coordination
costs can be further differentiated in to internal and external coordination costs. The former is
generated by the need to support the coordination mechanism in the hierarchical structure. Cloud
computing predominantly provides information economically.
Cloud computing, as concluded by (Zhang, 2010) has recently emerged as a new paradigm for
hosting and delivering services over the Internet. Cloud computing is attractive to business owners
as it eliminates the requirement for users to plan ahead for provisioning, and allows enterprises to
start from the small and increase resources only when there is a rise in service demand.
The recent evolution of cloud computing has borrowed its basics from several other computing
areas and systems engineering concepts. Cluster and Grid Computing on one hand, and
virtualization on the other hand are perhaps the most obvious predecessor technologies that enabled
the inception of cloud computing (Androutsellis, 2004)
The cloud application layer is the most visible layer to the end-users of the cloud. Normally, the
users access the services provided by this layer through web-portals, and are sometimes required to
pay fees to use them is normally referred to as Software as a Service (SaaS).Sales force Customer
Relationships Management (CRM) system and Google Apps are two examples of SaaS.
Information Technology automates and dramatically reduces the cost of inventory management of
IT assets such as computers, servers and data tapes enables highly cost-effective and automated
real-time IT asset tracking with a full audit trail from ‘cradle to grave’. Large enterprise data
centers can easily contain thousands of servers and tens of thousands of data tapes in
geographically dispersed locations. The advancement of mature RFID platforms paves the way for
highly scalable RFID applications that can virtually automate IT asset management tracking,
dramatically reducing IT time and costs as well as providing the real-time IT asset visibility
required to ensure security and compliance.”Hasbe (2004)

36
Companies can slash costs by improving the design process at its beginning. Design for
manufacturing and assembly (DFMA) software includes a design-for manufacture module, with
which engineers obtain early cost estimates on parts or products, and a design-for-assembly
module, which they employ to determine the best methods to manufacture products. During this
process, the software draws from its large database, containing thousands of manufacturing
processes, materials, and machinery, which was developed over many years in conjunction with
companies such as GM and Ford. The improved inspection process accuracy and efficiency
supports lean manufacturing, thereby lowering programming labor and cutting costs, Kluserner
(2004).As per (Antonio, 2001), Emerging technologies, such as agents and ERP, can provide the
technical support for realizing the strategy proposed in this paper, such as the support for new
instantiations of traditional activities, such as managing incoming information to reduce the
amount of information processed There are several trends in Information Technology, but few tend
to impact the overall business as significantly as virtualization. Virtualization optimizes the use of
the existing resources; simplifies the area of infrastructure and software administration,
maintenance, and deployment; and reduces hardware needs, resulting in less power consumption,
less space required, and lower cooling costs. Such a technology may be brought in the reach of
manufacturing units in MSI and SSI Sectors for profit-realization and getting organized.
Cloud computing is a new term, which is defined now after dozens of years of the research in
different concepts of computing such as software and web services, utilized and distributed
computing which includes virtualization and networking concepts. In cloud computing we get a
number of advantages which are impossible to get in the old technologies such as by using cloud
computing the end-users information overhead is much reduced now, its ownership cost is much
lower than old technologies, it is more flexible than other technologies, it use a service oriented
architecture which means it provides on demand services and includes many other things. (Mladen
A. Vouk)
Cloud computing introduced as a latest computing parameter which provides several services and
features better than other technologies. Cloud computing is consider as a hot topic in these days
because it provides more reliability, such software services which are configurable, it guaranteed
The Quality of Service (QoS) for computing environment for the end users, it also provide the
dynamic information technology architecture which is very flexible.
Cloud computing emerged as a new computing platform which has a key feature of sharing
resources that includes processes of the businesses, software, applications and more important
infrastructures. The core feature which enable cloud computing to share the resources is
virtualization. The most important feature the cloud computing has, is the service oriented
architecture (SOA) however most of the cloud computing platforms have not adopted this

37
architecture formally but when these platforms fully adopted this architecture then the cloud
computing will have more flexibility and reusability. (Zhang; Zhou)
Cloud computing is introduced as a new word in the Information Technology community and now
everyone believe that cloud computing will reshape our IT world as a revolution. Cloud computing
is a model of easy access and on-demand resource sharing which can be configure. These resources
may include computing services, our networks, servers, storage and applications. And we can
provide these resources very easily and with minimum amount of efforts of management and
interaction between service provider and the end user (Dillon; ChenWu; Chang)
Cloud computing is a new buzz word but it is related with the old technology known as Grid
computing, this is not the only computing technology to which the cloud computing is related there
are several other technologies like cluster computing, utility computing and distributed systems as
we talk about all of these computing technologies. Cloud computing is very large scale computing
parameter which is distributed means it differs from the traditional ones and have a key feature of
economies of scale in which on demand services (which are different levels) provide to the
customers over the internet along with storage, computing power, platforms which are dynamically
scalable. (Foster; Zhao; Raicu; Lu)
There have been considerable advances in the Information and Communication Technology (ICT)
for last some decades we started to think that the computer will be our fifth utility including water,
electricity, gas and telephones. So computing will be provided to everybody like other utilities no
matter where all these services are hosted or who is responsible of providing them. To deliver this
utility several computing parameters are responsible including cluster computing, grid computing
and a very latest concept called cloud computing. This word “Cloud” is like a infrastructure which
provide on demand access of applications to businesses and customers all over the world. (R.
Buyya)
Cloud computing is a computing utility which has a potential to transform our Information
Technology industry, it has made our software more attractive and fully changed the design of our
hardware. Developers who have new ideas don’t need large capital in hardware to deploy their
services over the internet. (Armbrust; Fox; Griffith; Joseph)
Our computing world is becoming very large and complex and cloud computing emerged as a
model which can process very large volumetric data. The cloud computing can handle massive data
as we demand. The cloud computing is next evolutionary step of distributed computing. It uses the
resources to handle large scale computational problems.

The literature identifies three different broad service models for cloud computing: a) Software as a
Service (SaaS), where applications are hosted and delivered online via a web browser offering
traditional desktop functionality for example Google Docs, Gmail and MySAP. b)Platform as a

38
Service (PaaS), where the cloud provides the software platform for systems (as opposed to just
software), the best current example being the Google App Engine. c) Infrastructure as a Service
(IaaS), where a set of virtualized computing resources, such as storage and computing capacity, are
hosted in the cloud; customers deploy and run their own software stacks to obtain services.
Current examples are Amazon Elastic Compute Cloud (EC2), Simple Storage Service (S3) and
Simple DB. The literature also differentiates cloud computing offerings by scope. In private
clouds; services are provided exclusively to trusted users via a single-tenant operating
environment. Essentially, an organization’s data centre delivers cloud computing services to clients
who may or may not be in the premises. Public clouds are the opposite: services are offered to
individuals and organizations who want to retain elasticity and accountability without absorbing
the full costs of in-house infrastructures. Public cloud users are by default treated as untrustworthy.
There are also hybrid clouds combining both private and public cloud service offerings.

STATEMENT OF PROBLEM
Cloud technology can bring a remotely placed business to a huge global market and increases its
prospects. To contribute to a more commercially secure business environment; identify and create
awareness about the security, regulatory and legal considerations in relation to the uptake of cloud
computing; and enhance small business’s confidence in using cloud computing specifically, and
the digital economy more generally

Objectives of the project:

The project study deals with the following objectives:
1. Internationalization of small business in the age of cloud services.
2. To study the benefits of cloud technology for small business
3. To identify the criminal, regulatory and legal risks to small business posed by cloud
computing.

39
 CHAPTER 4

RESEARCH METHODOLOGY

40
 RESEARCH

Research is defined as human activity based on intellectual application in the investigation of

matter. The primary aim for applied research is discovering, interpreting, and the development of
methods and systems for the advancement of human knowledge on a wide variety of scientific
matters of our world and the universe. It is exploratory and often driven by the researcher’s
curiosity, interest, and intuition. It is conducted without any practical end in mind, although it may
have unexpected results pointing to practical applications.
“Research means search for knowledge” sometimes it may refer to a scientific and systematic
search for pertinent information on a specific topic. In fact research is an art of scientific
investigation.

Red men and man define research as a

“Systematized effort to gain knowledge”.

Type of Research Method

The proposed study is a qualitative and descriptive type of study. The major purpose of using such
a design is description of the state of affairs as it exists at present.

Sampling:
Sampling may be defined as the selection of an aggregate or totally on the basis of which a
judgment of reference about the aggregate of totally is made. “Sampling is used in conducting
surveys and in studying various problems concerning production management, time and motion
studies, market research, various areas of accounting and finance and the like.
Sampling technique
The method of sampling, which selected, is “non-probability convenience sampling”. In this
method the sample insights are chosen primarily on basis of my convenience.
Random sampling will be adopted for collecting the information from the employees

41
Target group
Employees working in small IT companies would be selected as target group.

The Sample size

A sample of 30 employees of small businesses will be selected and analysis would be done by
questionnaire.

Sources of data collection

Both primary and secondary methods are used for this project

Primary data:
Primary data refers to the data which is collected by the researcher o the first time. Primary data
will be collected through face to face interview and questionnaire method. A brief structured
questionnaire is prepared for the same.

Secondary data: Secondary data reefers to the data which is already collected by someone. The
data will be collected from the Magazines, Annual reports, and Internet and Text books.

Method of Data collection

Data collection
Data will be collected through face to face interview and questionnaire method
Advantages of data collection:
1. In-depth information of customer needs.
2. Very precise data from the customer.
3. Feedback for development
4. Ascertaining source of the problem.

Data Analysis method

The information presented will be represented in the form of tables, so that interpretation and
tabulation of data will be precise. Data will be analyzed through percentage method. Various
statistical tools will be used to arrive at precise, reliable and applicable result. The major tools that

42
will be used are averages, standard deviation for finding out deviations from the benchmarks,
correlation to know about the relationship between different variables under study.
Data will be analysed by using excel 2007and using graphs, charts and percentages.

STATISTICALTOOLS / TECHNIQUES TO BE USED FOR DATA ANALYSIS:

I. Percentage, Mean: Percentage refers to special kind of ratio. This method is used as
making comparison between two or more services of data. Percentage is used to decidable
relationship. Percentage can also be used to compare the relative terries, the distribution of two or
more services of data
II. Charts and graphs: Bar charts and pie charts are used to get a clear look at the tabulated
data.

43
 CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

44
 DATA ANALYSIS AND INTERPRETATIONS

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Quality of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 19 64%

Good 8 26%

Fair 3 10%

Poor - -

Total No. of Respondents 30 100%

Analysis:

From the above it can be observed that

64% of the customers are feeling that the quality is Excellent,

26% of the customers feel that the quality is good,

10% of the customers feel that the quality is fair,

None of them are there to say Quality is not good.

Inference:

The above analysis depicts that the majority of the customers feel that the quality of SSI’s Products

is Excellent.

45
 No of respondents

CHART ANALYSIS:

Excellent Good Fair Poor

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents

No’ of respondents.

Inference:

The above analysis depicts that the majority of the customers feel that the quality of SSI’s Products

is Excellent.

Conclusion:

As most of the customers of the firm perceive the quality of the products to be excellent, the firm

should ensure to maintain the same standards. This action will increase the loyalty of the customers

towards the firm and its products

46
1. CUSTOMERS OPINION ON FEATURES OF PRODUCTS.

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Features of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 19 62%

Very Good 7 22%

Good 4 16%

Poor - -

Total No. of Respondents 30 100%

Analysis:

From the above it can be observed that,

62% of the custmers are feeling that the features of Insulators is Excellenet,

22% of customers are feeling that the features of Insulators is very good, and

16% of them are the opinion that the features of Products is good. However, there are no

respondents to quote the features of Products are poor.

Inference:

The above analysis depicts that majority of the customers feel that the overall efficiency of SSI’s

Products is satisfactory.

47
 No of respondents
CHART ANALYSIS:

Excellent Good Fair Poor

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that majority of the customers feel that the overall efficiency of SSI’s

Products is satisfactory.

Conclusion:

As most the customers are of the opinion that the efficiency of the firms products is good, the

company should ensure to continue the same standards of efficiency further.

48
2. OPINION OF CUSTOMERS ON PACKAGING OF PRODUCTS.

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Packing of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 11 36%

Good 13 42%

Satisfaction 4 18%

Dissatisfaction 2 4%

Total No. of Respondents 30 100%

Analysis:

From the above we can be observed that,

36% are feeling that SSI’s products packaging is Excellent,

42% are feeling that the SSIS’s product packing is good,

18% are feeling that the SSIS’s product Packaging is Satisfactory and

4% of the customers are dissatisfied with the packing.

Inference:

The above analysis depicts that the majority of customers feel that the packaging of SSI’s Products

is good.

49
 No of respondents
CHART ANALYSIS:

Excellent Good Satisfaction Dissatisfaction

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that the majority of customers feel that the packaging of SSI’s Products

is good.

Conclusion:

The firm should take certain necessary steps to give even better packaging than the existing one to

completely wipe out the dissatisfied customers. However by giving better packaging to products

customers will be satisfied to the hilt.

50
3. AWARENESS ON ALL PRODUCTS OF PRODUCTS.

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Awareness of all SSIS’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Well aware 13 44%

More aware 10 32%

Few known 7 24%

Don’t know - -

Total No. of Respondents 30 100%

Analysis:

From the above we can be observed that,

44% are well aware about the SSI’s products,

32% are more aware about the SSI’s products,

18% are few known about the SSI’s products, and

No one has in the list of Don’t about HCL products.

Inference:

The above analysis depicts that the majority of customers aware about the SSI’s Products.

51
 No of respondents
CHART ANALYSIS:

Well aware More aware Few known Don’t know

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that the majority of customers awre about the SSI’s Products.

Conclusion:

Firm should aware the people about our products. This will improves the firms credibility as well

as it will changes the most known customers to well known customers. Then automaticlly it will

leads to sales promotion.

52
4. WHAT IS OUR RANKING COMPARED WITH THE SIMILAR PRODUCTS ON THE

MARKET

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Ranking of SSI’s Products on the market.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 13 44%

Good 9 32%

Satisfaction 6 20%

Dissatisfaction 2 4%

Total No. of Respondents 30 100%

Analysis:

From the above we can observed that,

44% are feeling that SSI’s Ranking in market is Excellent,

32% are feeling that the SSI’s Ranking in market is good,

20% are feeling that SSI’s Ranking in market is Satisfactory and

4% of the customers are dissatisfied with the Ranking in market.

Inference:

The above analysis depicts that the majority of customers feel that the Ranking of SSI’s Products is

Excellent.

53
 No of respondents
CHART ANALYSIS:

Excellent Good Satisfaction Dissatisfaction

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that the majority of customers feel that the Ranking of SSI’s Products is

Excellent.

Conclusion:

The firm should take certain necessary steps to give even better Ranking than the existing one to

completely wipe out the Market standards. However by giving better Ranking to products

customers will be satisfied to the hilt.

54
5. HOW ABOUT THE RELIABILITY TO OUR PRODUCTS？

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Reliability of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 12 40%

Good 12 40%

Satisfaction 4 16%

Dissatisfaction 2 4%

Total No. of Respondents 30 100%

Analysis:

From the above we can be observed that,

36% are feeling that Reliability on SSI’s products are Excellent,

42% are feeling that Reliability on SSI’s products are good,

18% are feeling that Reliability on SSI’s products are fair, and

4% of the customers are dissatisfied with the Reliability.

Inference:

The above analysis depicts that the majority of customers feel that the packaging of SSI’s Products

is good.

55
 No of respondents
CHART ANALYSIS:

Excellent Good Satisfaction Dissatisfaction

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that the majority are feel that the Reliability of SSI’s Products is

Excellent & Good.

Conclusion:

The firm should take certain necessary steps to give even better Reliability than the existing one to

completely wipe out the dissatisfied customers. However by giving better Reliability to products

customers will be satisfied to the hilt.

56
6. WHAT ABOUT THE COMPATIBILI OF OUR PRODUCTS？

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Compatibility of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Excellent 14 44%

Good 13 40%

Satisfaction 3 10%

Dissatisfaction 0 0%

Total No. of Respondents 30 100%

Analysis:

From the above we can observe that,

36% are feeling that SSI’s Compatibility is Excellent,

42% are feeling that the SSI’s Compatibility is good,

18% are feeling that the SSI’s Compatibility is Satisfactory and

4% of the customers are dissatisfied with the Compatibility.

Inference:

The above analysis depicts that the majority of customers feel that the Compatibility of SSI’s

Products is Excellent.

CHART ANALYSIS:

57
 No of respondents

Excellent Good Satisfaction Dissatisfaction

Opinion of the respondents

In the above graph, X-axis represents opinion and Y-axis represents No. of respondents.

Inference:

The above analysis depicts that the majority of customers feel that the Compatibility of SSI’s

Products is good.

Conclusion:

The firm should take certain necessary steps to give even better Compatibility than the existing one

to completely wipe out the dissatisfied customers. However by giving better Compatibility to

products customers will be satisfied to the hilt.

7. OPINION OF CUSTOMERS ON PRICE OF THE PRODUCT

PERCENTAGE ANALYSIS:

This table shows the customer opinion concerning the Pricing of SSI’s Products.

OPINION NO. Of RESPONDENTS PERCENTAGE

Very High 14 46%

High 9 30%

Reasonable 7 24%

Low - -

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Total No. of Respondents 30 100%

Findings:

From the above graph we can be observed that,

46% of the custmers are feeling that product price is very high,

30% of them feel that the price of the product is high,

24% of them feel that the price is reasoable &

None of them are of the opinion that the price is low.

Inference:

The above analysis depicts that majority of the customers feel that price of the product is abnormal

or very high.
No .of Respondents

CHART ANALYSIS:

Very High High Reasonable Low

Opinion of the respondents

In the above graph, x-axis represents opinion and y-axis represents No. Of respondents.

Inference:

The above analysis depicts that majority of the customers feel that price of the product is abnormal

or very high.

59
 TABULAR PRESENTATION

Table-1, describes the sample of manufacturing unit in medium and small scale industry. Twenty
six respondent companies have been classified as per its business activity like Engineering units,
Forging units, Metal Casting units and sheet metal units.

TABLE-1: SAMPLE OF MANUFACTURING UNITS

S.No. MANUFACTURING ACTIVITY OF UNIT MSI SSI TOTAL
1 Engineering Units 2 5 7(30)†
2 Forging Shops 3 2 5(21) †
3 Metal Casting Units and Foundries 5 3 8(33) †
4 Sheet Metal Units 2 2 4(6) †
TOTAL 12 12 24(100)†

Table-1 shows that 30% units are engineering goods manufacture, 21% are forged component
manufacturers, 33% are metal component castings manufacturers and six percent population
belongs to sheet metal component manufacturing units.

60
 Table-2, highlights the comments given by the respondent companies regarding understanding the
concept of cloud computing for benefit of the company.

TABLE-2: UNDERSTANDING OF CLOUD COMPUTING BY RESPONDANTS

S.No. UNDERSTANDING OF CLOUD COMPUTING MSI SSI TOTAL

Y (%) N (%) Y(%) N (%) Y (%) N(%)

1 Familiarity with cloud computing 20 80 (%)

0 100 10 90
2 Company uses cloud computing 0 100 0 100 0 100
3 Familiarity with ERP software 80 20 50 50 65 35
4 Usage of ERP only 40 60 15 85 22 88
5 Cost of in-house ERP is more than Cloud computing 70 30 100 0 90 10
6 IT Companies visit you for product selling 80 20 40 60 60 40
7 Does your customer press you for IT-Usage 90 10 40 60 65 35
8 Are you connected with customer online 15 85 0 100 8 92
9 Your customer is a large scale industry 60 40 30 70 45 55
10 IT can improve your company’s performance 80 20 30 70 55 45
11 Fixed cost of IT solutions is more 70 30 90 10 80 20
OVERALL(PERCENTAGE) 55 45 36 64 45 55

The above Table-2 exhibits that usage and familiarity to cloud computing is very low in both types
of industries. 80% of MSI respondents are familiar with ERPs and 40% really use it compared to
that of 50% familiarity in case of SSI’s and 15% are using it.90% of MSI customers asks the
suppliers to go for IT-Solution as 60% customers are large scale industries while in case of SSI, the

61
 asking rate is 40% and 30% customers are large scale industries. 80% of MSI believes that usage
of IT-Solution increases performance but this concept is 30% effective in case of SSI’s. Regarding
the fixed investment, both types of companies have similar opinion but 20% of SSI assess this cost
still higher.
Overall, it can be said that sum total of all respondents is favourable by 55% which is slightly
above the mean while in case of MSI, it is falling very short of simple average by 14%.

An attempt was made to check what the users think about the confidentiality of their data being
stored beyond the physical boundaries of the manufacturing company. The responses on this have
been summarized in Table-3.

TABLE-3: RESPONSES REGARDING COFIDENTIALITY AND SECURITY

S.No. UNDERSTANDING OF CLOUD COMPUTING MSI SSI TOTAL

Y (%) N (%) Y (%) N (%) Y (%) N (%)

1 Familiarity with cloud computing 20 80 0 100 10 90
2 Company uses cloud computing 0 100 0 100 0 100
3 Familiarity with ERP software 80 20 50 50 65 35
4 Usage of ERP only 40 60 15 85 22 88
5 Cost of in-house ERP is more than Cloud computing 70 30 100 0 90 10
6 IT Companies visit you for product selling 80 20 40 60 60 40
7 Does your customer press you for IT-Usage 90 10 40 60 65 35
8 Are you connected with customer online 15 85 0 100 8 92
9 Your customer is a large scale industry 60 40 30 70 45 55
10 IT can improve your company’s performance 80 20 30 70 55 45
11 Fixed cost of IT solutions is more 70 30 90 10 80 20
OVERALL(PERCENTAGE) 55 45 36 64 45 55

It is surprising to note that both types of industries resemble in thinking negative about the
confidentiality of data in server at a distant place. Comparatively, SSI’s are more afraid of data
storage at different location. Overall, 59% of MSI doubts the confidentiality of data stored in cloud
62
computing while this negative faith is of the tune up to 64% in case of SSI’s. Average negative
voting about confidentiality and security of data has been reported at 59% by both types of
industries. Further investigation was done on type of IT-Solution used and its preferred brand and
its method of its implementation. Views about legality of cloud computing was also explored.

Table 4 highlights the responses on various aspects of branding.

TABLE-4: RESPONSES WITH REGARD TO BRAND OF IT-SOLUTIONS

Table-4 summarises that 40% MSI preferred branded ERP’s compared to cloud computing while
this concept has been negatively reported at 20% by SSI.The aspect of legality in implementing
cloud computing has been demanded at very high rate by both companies, almost cent percent.50%
of MSI respondents feel that ERP and cloud computing increase cost while 80% of SSIs have
opined the same. Both types of industries identically resembles in thinking that cloud computing is
preferred v type of quality service at better economics. Overall, both companies’ views cloud
computing superior at 62%.

63
 CHAPTER 6

SUGGSTIONS AND RECOMMENDATIONS

64
SUGGSTIONS AND RECOMMENDATIONS

Cloud computing being low cost revolutionary concept for enriching the business performances of
medium and small scale industry; its introduction, penetration, implementation need to be
strengthened for growth of National GDP. Following suggestions may further act in positive
direction for increasing the effectiveness of Clousteer-IT.
 Companies in cloud computing need to make the concept properly understood by medium
and small scale industries. Formal training sessions to industry clusters will popularize the
plurality of this concept.
 Host companies have to guarantee all types of safety, security and legality about misuse of
client company’s data.
 Government and Industrial Departments need to float certain incentive schemes for making
Information Technology within the reach of small scale industry.
 Large scale companies to whom Medium and small scale industries are linked, need to
bargain the cloud hosts for its clients as well arrange certain training sessions by experts
for its implementation.

FUTURE SCOPE OF THE STUDY

Present study was limited to a small geographical region and further sample was also limited
to manufacturing units. Wider scope, especially for smaller businesses, can bring about
amazing potential in enhancing the performance of small scale industries. In parallel studies on

65
cloud computing providers may also be done for removing barriers and making a bridge
between service providers and end-users for mutual growth and benefit.

CHAPTER 7

FINDINGS AND CONCLUSIONS

66
FINDINGS AND CONCLUSIONS

Based upon the discussion of responses received by respondent companies, following

conclusions can be drawn as under:
 It can be inferred that the companies are not well aware of usage of cloud computing
but some of the companies do use local and branded ERP’s .The concept of cloud
computing being new for India has not gained momentum so far.
 Server of Cloud Company being at different location, confidentiality and securities of
data are taken as big threat by both types of manufacturing industries.
 Legal action on leakages of data by host Company and its uninterrupted accesses are
grey areas to be addressed by the cloud steers.
 It has been accepted by manufacturing companies that cloud applications are cheaper
than ERP’s installed at works and quality of service by cloud steers are understood
superior. Surprisingly, SSI have interpreted that the implementation of IT-Solutions
increases the cost.
 Majority of Medium scale industry has voted in favour of Clousteer-IT does improve
the overall business performance and enrich the bottom-line while Small scale industry
respondents have opposed this revolutionary step.

67
 CHAPTER 8

QESTIONNAIRE AND BIBILIOGRAPHY

68
Questionnaire

Medium and Small Scale Industries

Name:-

Address:-

Mobile no.:-

E-mail address:-

1. Occupation:-
 Government Employee
 Private Employee
 Businessman
 Retired

2. Age Group
 20 - 40
 40 – 60
 Above 60

3. Education

69
  Illiterate (uneducated)
 Metric/Senior Secondary
 Graduation
 Post-graduation
 Doctorate

Part 1 – General Knowledge/Perception in Cloud Computing

Please answer the questions that follow by ticking only one answer in each question.

Q1. Do you know what “Cloud Computing” is?

[ ] Yes
[ ] No

Q2. Do you know how it works?

[ ] Yes
[ ] No

Q3. Is cloud computing beneficial for doing a business nowadays?

[ ] Yes
[ ] No

Q4. Do you have idea about working of cloud computing?

[ ] Yes
[ ] No

Q5. Do you know how cloud deployment models establish?

70
 [ ] Yes
[ ] No

Part 2 – E-Marketing services

*For Users (Entrepreneurs, Marketers, and Consumers)
Please review the statements below and indicate the degree of e-Marketing services from B2B e-
Marketplace in your organization.

Scale:
1 Very Important 4 Somewhat Unimportant
2 Somewhat Important 5 Very Unimportant
3 Neither Important nor Unimportant

Q6. E-Marketing resources (e.g. E-mail and Web Site) enable us to communicate more effectively
with our customers. (Please tick one box)
1 2 3 4 5
□ □ □ □ □
Q7. E-Marketing enables us to reduce operational costs (e.g. Online Customer Service). (Please
tick one box)
1 2 3 4 5
□ □ □ □ □
Q8. The adoption of e-Marketing has improved our sales and developed more effective marketing
services. (Please tick one box)
1 2 3 4 5
□ □ □ □ □

Q9. E-Marketing resources (e.g. data mining) enable us to identify customers’ characteristics’ and
their purchase behaviors. (Please tick one box)
1 2 3 4 5
□ □ □ □ □

Part 3 – SME Viewpoints on Cloud Computing

71
This part aims to identify the reason behind a possible engagement of an SME in the Cloud
Computing, the most suitable cloud model, the type of cloud service an SME will likely use, and so
on.

Q10. What is the size of the enterprise you represent?

[ ] 1 – 9 Employees
[ ] 10 – 50 Employees
[ ] 50 – 250 Employees
[ ] Over 250 Employees

Q11. What are the reasons behind your possible engagement in the Cloud Computing?
[ ] Remove economic/expertise barriers impeding to modernize business processes by the
introduction of Information Technology.
[ ] Avoiding capital expenditure in hardware, software, IT support, Information Security
by outsourcing infrastructure/platforms/services
[ ] Increasing computing capacity and business performance
[ ] Diversification of IT systems
[ ] Business Continuity and Disaster recovery capabilities
[ ] Local and global optimization of IT infrastructure through automated management of
virtual machines
[ ] Adding redundancy to increase availability and resilience
[ ] Controlling marginal profit and marginal costs
[ ] Other (please specify) _______________________________________________

Q12. Which solution do you see as the most suitable for an SME, according to this possible Cloud
Computing taxonomy?
[ ] Public Clud (owned and managed by unrelated business)
[ ] Private Cloud (owned and managed internally)
[ ] Partner Cloud (owned and managed by a trusted partner) 
[ ] A federation of clouds provided by various sources (partner, private, etc)
[ ] Others (Please specify)__________________________
Q13. Which “layer” of the Cloud would you be most likely to approach?
[ ] Individual software packages (SaaS)
[ ] Complete operating system and software package available via cloud services (PaaS)
[ ] Just infrastructure services such as storage, network, etc (IaaS) 
[ ] Security services in the cloud

72
 [ ] Others (Please specify)__________________________

BIBILIOGRAPHY

References:
 Janakiram MSV Cloud Computing Strategist; (2010), “Demystifying the Cloud An
introduction to Cloud Computing”, Version 1.0 – March.
 Adamov, A ; Erguvan, M.; (2009),“The Truth about Cloud Computing as new Paradigm in
IT”,IEEE International Conference on Application of Information and communication
Technologies, AICT 2009.
 Dikaiakos, M.D; Katsaros, D.; Mehra, P.; Pallis, G.; Vakali, A.; (2010), “Cloud Computing
Distributed Internet Computing for IT and Scientific Research”.Vol.13 ,pp 10, Sept.-Oct.
2009.
 Shuai Z; Shufen Z; Xuebin C; Xiuzhen H; (2010), “Cloud Computing Research and
Development Trend”, 2nd International conference on Future Networks, 2010. ICFN ' 10.
pp 23, 22-24 Jan 2010.
 Chang, L, Ti ; Chin L; Chang, A.Y.; Chun J, C;(2010), “ Information security issue of
enterprises adopting the application of cloud computing”, IEEE 2010 Sixth International
Conference on Networked Computing and Advanced Information Management (NCM),pp
645, 16-18 Aug. 2010.
 “GOOGLE Apps,” http://www.google.com/apps/business/index.html.
73
 5. http://www.ht2.org/conference/pdf/84.pdf)
 6. http://www.esri.com/news/arcnews/spring09articles/reduce-costs.html)
 7. Jensen, M. and Meckling, W. Knowledge (1992), Control and Organizational Structure
Parts I and II. In Lars, Werin and Hijkander (Eds.), Contract Economics (pp.251-274).
Cambridge, MA: Basil Blackwell ll.)

74