By Subramaniam Ananthapadmanaban, Vice President, SAP Indian Subcontinent
Insulation against the pandemic’s blows has become the bedrock of success for Indian MSMEs. Business leaders across the nation have realised that the best bet for stability will be to transform processes with technology and automation. Using resilience as the guiding theme, enterprises have re-thought their business models, embraced digital for management, marketing, and payments, and strengthened customer relations. As the nation progresses towards a $5 trillion economy, these firms play a crucial role in attaining that goal. In the months to come, Indian MSMEs will rise to greater heights over the course of digital evolution, leading to enhanced business resiliency.
Contributing around 30% towards the GDP through its national and international trade and having a 50% share in the country’s exports, mid-market enterprises have been digging deeper into the area of ‘sustainable productivity’. Through the power of digitalisation and data analytics, these businesses are on their path of engagement beyond boundaries and intelligent business continuity. The industry continues to digitally ring-fence itself from further disruption. This has given rise to noticeable trends fostering the social, economic, and hyper-local aspects of the ‘middle’. Steered by top leadership, tech adoption in various facets of business will be beneficial with regard to finance, supply chain management, skill development, and engagement with stakeholders. This, in turn, would lead to sustained resiliency.
Reaching the Cloud
‘To cloud or not to cloud’ is no more the debate. Mid-market enterprises are allocating a substantial amount of their budget towards cloud-based applications, which would lead to agility, flexibility, and scalability. Workload migration to cloud (SaaS) enhances productivity, employee engagement, and satisfaction. According to a recent report conducted by IDC, The State of Midmarket Enterprises in India, 74% of enterprises will move more applications to the cloud. While industries like manufacturing and IT/ITeS will lean towards this approach, 46% of enterprises will adopt a hybrid cloud strategy.
Embracing cloud-based solutions are particularly in focus as cloud computing offers Software, Platforms, and Infrastructure as a Service basis a pay-per-use model. As a result, mid-market companies can adopt world-class technologies cost-effectively. While the power of digital has been leveraged in terms of payments, UPI, mobile wallets and Internet banking, the next ripple in this tech wave is undeniably cloud computing.
Automation to Bolster Engagement
Laser focus on retaining employees and customers will continue to trend among mid-market players in the form of advancement in automation. For customer retention, enterprises have already resorted to various touch points like chat-bots, CRM, and personalisation in services. Furthermore, survey findings in the MSME Digital Readiness Survey 2021 by PayPal India and Edelman Data and Intelligence show that unprecedented lockdowns affected consumer behaviour resulting in increased online purchase. MSMEs witnessed a 65% increase in online buying from customers. Digital methods like social media, company-owned platforms and third-party e-commerce platforms have helped 51% of MSMEs touch base with their customers.
With regard to internal operations, automation in payroll, leave, expense management and supply chain functions like invoicing and order fulfilment has led to better employee experience as it helped people stay protected, agile, and adaptive.
Growing in the threat landscape
Growing in the cyber-threat landscape would require enterprises to prioritise risk management services. While cloud vendors offer some of the most robust security in the IT space, it is interesting to observe mid-market enterprises increase or retain their spending for cybersecurity. According to the IDC report, investments in cybersecurity protection will increase by 60% in 2022 among mid-market players. A comprehensive risk management framework is invariably one of the main pillars for cloud vendors. However, educating business owners to identify and understand possible threats and increase their knowledge about cloud risk management will be a priority too. This can be fuelled by various large organisations and government institutions.
Mid-markets to skyrocket digitally
Today, mid-market players can be found in different stages of the digital curve. This proves that cutting-edge evolution is proliferating and ushering in a renewed vigour in India’s economic growth.
In our physical-first world, technology will reduce the operational expenditures and offer data-driven insights which will hasten decision-making. MSMEs will grow manifold through digital literacy programs, simplification of complex technologies such AI and ML, and introduction of favourable government schemes. This will enable them to compete with large corporations and help them flourish in the global supply chain map. Skilling small businesses to harness the power of digitalisation would help them absorb the recurring waves of the pandemic and also empower them to grow and thrive in this unpredictable ecosystem.
