MSME Pump up – Digital Transformation for Growth

The era of digitalization has been changing leaps and bounds, reaching newer heights every day. Initially, the cost of digital technology was quite high & could only be afforded by big fat companies. Today, it’s not at all costly & can be used at both small & large scale levels. And the biggest contribution made has been by Internet Giants like Facebook, Google, Yahoo, etc to expand the reach of digitalization.

Within a digitized world, we often hear of terms like the internet of things, Cloud computing, SAAS, Artificial Intelligence and Machine learning. These are gradually eliminating human intervention & building more credibility. All business processes are ready to get automated and changing the way business is done.

What is Digital transformation?

Digital transformation is a condition when all the digital technology is integrated into all the operations of the business which to assist in empowering employees, optimizing functions, upgrading products and engaging with customers so that the best of everything can be delivered.

Benefits of Digital Transformation for MSMEs

Digital transformation for MSMEs can be advantageous in numerous ways. These are improved customer experience, 24*7 availability to serve the customer using AI, machine learning and chatbots. Customer satisfaction charts higher to build the trust & loyalty of the organization.

• Cost Reduction – Predictive analysis helps in the figuring of loopholes in the production system which reduces cost.
• Intelligent Decision making– it’s important to keep a close tab on the customer base including existing & potential customers, competitors. The information retrieved can help to make strong decisions in areas like marketing, production & sales by reading customer behaviour, in-stock decisions, market trends etc.
• Increased efficiency– Automation of the business process reduces the human intervention and eliminate the chance of human error resulting in higher productivity and efficiency
• Increased Profitability– Adaptable to the advanced technologies results in improved and upgraded products resulting in the profitability of the business.

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What is the barrier to the Digital Transformation for MSMEs?

High set up cost – Transforming the existing business set up from physical to digital attracts high initial cost that the firms shy away to implement.

Complexity in integration – Certain areas of the business where the human interaction or the manpower is required.

Not urgent – Those businesses which are traditional and defy change, do not feel an urgency in bringing their business in the digital platform.

Lack of digitally skilled workforce – Businesses cannot take the advantage of the digital revolution completely if there is need gap between the digital knowledge and the digital execution, hence the existing workforce does not have the expertise of transitioning into the digital world smoothly.

How can digital transformation help small businesses during COVID?

The pandemic caused by the COVID 19 has resulted in the unprecedented changes that have made the businesses to rethink their existing business models and new ways to create value for the customers. The businesses need to focus on the following areas before digital transformation:

• Need to identify new customers as the existing customers have cash constraints or the demand for the product reduced – all the efforts need to be focussed in generating leads and should be customised as per the demands.
• Need to ensure that the existing customer is serviced effectively through frequent communications, politeness and hassle-free customer support through digital channels which will help them to upsell in the future.
• The supply chain needs to be streamlined as the majority of the industries are suffering from bottlenecks & broken supply chain. There has to be some long term alternative to the current supply chain as the effects of COVID 19 is here to stay.
• Maintain the motivation of the people to work – employees should be motivated by ensuring a higher level of engagement through collaboration, upskilling and new roles establishing benchmarks for the productivity

What are the various possibilities that the digital transformation offers?

The segments that the digital transformation will help MSMEs to focus on are:

• Online Presence –As the virtual footprints of the consumers have increased multi-fold in the last few years, a company needs to have a robust website, mobile application or the e-commerce site for the strong online presence
• Cloud-Based Solutions –Various cloud-based solutions need to be explored like Accounts, CRM, Team collaboration, etc. for efficient and hassle-free functioning
• Social Media Presence –Presence in social network channels will help capture new markets and expand existing markets
• Data Tracking –Digital process has backend supports and analytics that helps generate reports and broaden the scope of knowledge through access to the important data.