By Bhaskar Ganguli, Director, Marketing and Sales- Mass Software Solutions Pvt. Ltd.
For decades, large corporations and big businesses have been viewed as agents of change as they’re often credited for accelerating the economic growth of a country. While they indeed make up a significant portion as contributors, the role of Small and Medium Enterprises (SMEs) cannot be overlooked. According to the World Bank, SMEs in developing countries are responsible for creating numerous job opportunities, which remain key to gradual economic development. And the situation in India is no different.
In a fast-growing nation like India, SMEs account for a prominent proportion of the country’s GDP. Taking note of the emerging markets, the Indian government also introduced several schemes such as ‘Credit Guarantee Fund Scheme’ and ‘Mudra Yojana’ with campaigns like ‘Vocal for Local’ and ‘Make in India’ to promote the growth of SMEs. And the budget allocation for SMEs has reached Rs 15700 crores in FY 2022, which is more than double the amount dispensed in FY 2021, which is a testimony to the surge in SMEs in the country.
But, like other entities, SMEs also witnessed numerous challenges amid the ever-changing market situations. While the need to innovate and adapt to change is imperative for any firm, the SMEs were faced with a new set of challenges during the global pandemic that accelerated the need for reinvigorating the way they carried out business operations.
Challenges faced by SMEs
Due to their substantial contribution to a country’s economic growth, SMEs have always been the priority of policymakers and governments. Initially, these enterprises worked on a physical model with manual control over the labour, employees, operations and marketing. But the recent pandemic drained the cash flow of these companies with a sudden decline in sales. Many small businesses had to shut down their operations due to a lack of contingency plans and emergency funds. Although the authorities implemented swift measures to tackle the situation globally, many SMEs still struggled to take a giant leap forward.
Liquidity issues arrived with a lack of talented workforce, leading to a grim situation for the enterprises. Large industries had sufficient CapEx with the OpEx to transform and adapt, but smaller scale enterprises working on the bootstrap investments lost many reserves. The pandemic-infused challenges, including the impactful lockdowns, proved catastrophic for the SMEs, especially instead of their archaic physical model that failed to keep the business steady. Adding to that, the needs of the consumers were also under rapid transformation. The increasing usage of the internet and demand for a short delivery time made it imperative for SMEs to adopt technology and embrace the digital approach.
Digital Transformation: A complete solution
Digital transformation includes adapting to tools and technology for various business operations to meet desired goals and customer expectations. The primary need for digital transformation was to support business continuity disrupted during the pandemic. Therefore, following in the footsteps of industry giants, SMEs underwent a complete digital transformation that gave them better access to their business operations, generated better leads and helped in brand recognition sans any lags and interruptions. The World Economic Forum predicts that the societal and industrial digital transformation market will reach 100 trillion USD by 2025. The statistics indicate that this transformation is not only a phase but a crucial business strategy for every SME to incorporate.
With digital transformation, companies can improve their management by having better access to information, appropriate communication with vendors and faster networking. With digitalization comes automation that can be combined with several operations to do menial and repetitive tasks, saving time and costs for the organizations. Similarly, procuring financial support and human resources can be more streamlined and expedited on the back of a digital presence. With the digital approach at the forefront, training the workforce can become seamless and more effective. Moreover, SMEs can track and log their employees’ progress while preparing in advance to tackle future challenges on the back of valuable insights.
To reach their customers significantly, SMEs can opt to go digital with the help of web development for brand introduction and establishment. Also, with a growing dependency on smartphones and other mobile devices, SMEs can rope in software firms to create applications with interacting user interfaces (UI) for better customer engagement and customer experience (CX). As physical documents tend to get damaged, SMEs can also opt for cloud services for better data management, security and interoperability.
Future of SMEs is Digital
While large companies continue to run away with the limelight, the SMEs are working silently to revolutionize development by being a vital cog in the country’s economic wheel. Regardless of the size, modern-day businesses have embraced digital transformation to procure long-term benefits. When it comes to SMEs, owing to their small size, they can undergo the transformation process more readily than large-cap enterprises.
On the other hand, SMEs can also rope in a credible partner to help them set up their IT infrastructure, among other requirements needed to fulfil their digital transformation. And with the rise of entrepreneurs in India, the digital process will not only get streamlined but also become more manageable. Newer technologies have always paved the way for industries to solve issues that traditional methods could not. It is precisely for this reason that, in the coming years, digital transformation will be integrated into all aspects of a company to meet the needs of industry and consumers.
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