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The service sector in India is emphatically booming with a current industry turnover of Rs. 30,000 crores. More importantly, even among the newly emerging enterprises, it has been seen that around 67% of SME’s in the country are engaged in the service sector, according to the annual report of the Ministry of Micro, Small and Medium Enterprises in India. Interestingly, an emerging global trend shows the inclination of SME’s to opt for providing services for niche markets, a trend that is also growing in India where enterprises are focusing on offering niche services like specialized IT services, financial advisory, technical consulting, mobile education and healthcare services, among others.
This trend was also supported by a study done by NASSCOM recently, which showed SME’s preferences to work for expert customized services rather than offering a wide range of services in a particular sector. This has to do with an emerging client demand for experts in niche domains; a client today prefers someone who has an expertise in one particular service rather than knowing a little of everything. This is good news for the smaller enterprises that may have some difficulty in expanding too much in their initial years. Quoting Reginald Alberto Nolido, who was chairing a recent forum for enterprises in Phillippines, “being an SME, you don’t really have the width or flexibility to get into different kinds of activities. Being the case you have to concentrate on what you are an expert in.” While bigger services firms will have constraints in cutting down the work they do, owing to their existing client base, smaller enterprises can work in the gap created for expertise and products in particular fields.
But being an SME service provider in a niche market has its own problems, especially if you are targeting too specific a client base. The need to intensify rather than diversify is very important, thus creating problems of visibility and also building a steady pipeline of clients and potential clients. It is important that the service being offered reaches the clients to need it the most. India lacks platforms that link the clients to the service providers directly, which often leads to more indirect and thus more inefficient channels. A second issue is a talent - in a study by NASSCOM the issue of talent sourcing for specialized skills was highlighted as the biggest challenge for niche service providers.
An interesting solution to both these challenges could be leveraging high-quality skills marketplaces. In the US, marketplaces for freelancers like Odesk and Elance are now also being used by niche services firms to find projects and assignments. In addition to helping source projects and/or talent, these platforms often also offer tools to help manage projects and time efficiently.
Closer home, platforms like Flexing It have launched recently to connect quality skill providers to organizations on a short-term, project and part-time basis. Such platforms can be an important tool to help niche service providers find clients by making their expertise and services visible. In addition, they could also help services firms identify specialized skills that they may need to deliver on specific projects! In fact, such platforms could help niche services and advisory firms build teams for ‘base-load vs peak-load’ and also round off their teams when very targeted skill sets are needed for certain assignments.