MSME Day: How can digital support help SMBs during COVID-19

The Small and Medium Businesses (SMB) sector in India employs more than six crore people, generates 45 percent of industrial production, and processes over 40 percent of all exports.

However, this significant and promising sector is experiencing some severe issues since the Covid-19 pandemic took over the world.

Frequent lockdowns across the nation have interrupted crucial operations, and the uncertainty of business continuity in the short and medium-term has weakened the bottom line of most of the enterprises in this sector.

Between March and June 2020 alone, an estimated three crore people had lost their jobs. Although the situation did marginally improve towards the end of 2020, the fierce second wave in the first few months of 2021 has further had an unexpectedly adverse impact on the situation.

Disruptions have led to discontinuity in business - long spells of lockdowns mean zero income, while expenses have not been under control, impacted supply chains mean diminishing opportunities, mass migrations of workforce mean lesser bandwidth - all the while faced with a health hazard of the pandemic. 

Adoption of technology  

Understandably, the circumstances were largely unavoidable. However, it should be noted that the severity of the situation faced by the SMBs could have been lowered by the timely adoption of technological advancements, especially the digitisation of day-to-day operations.

A vast majority of SMBs in India still rely on age-old methods. Maintaining accounts manually, meticulously checking for pending payments from each client, penning down all payables, taking business decisions from intuition or back of the envelope calculations, etc., are all still widely in practice.

Businesses need to understand that to combat the effects of the pandemic, they need digital support. It can help them in numerous ways, including but not limited to: 

• Digitising paperwork - invoices, quotations, delivery challans, etc.
• Staying up to date with inventory levels
• Tracking payables and receivables in real-time
• Taking preemptive data-driven decisions based on business intelligence

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Advantages of digital support 

It comes as no surprise that the pandemic supercharged the growth of digital payments in the nation. It also boosted the use of web-based platforms to market the services and offerings.

At the intersection of increasing consumer adoption of digital payments and the availability of easy-to-use tools for SMBs to take their business digital sits massive opportunities for rapid growth.

In today's competitive world, staying ahead of the curve is imperative, which can be ensured with digital transformation in business. Moreover, digital adoption will streamline daily operations, reduce inefficiencies, avoid erroneous decisions making, improve cash flows and most importantly, enhance the eligibility for accessing better financial products to further grow the business.

Today, India has one of the world's most vibrant and thriving confluence of advancements in technology, financial engineering, and business-friendly policies, which SMBs can leverage to skyrocket their enterprises.

A report by Cisco in 2020 clearly suggests that the digitisation of SMBs could add up to $216 billion to India’s GDP by 2024. As one of the fastest growing economies, India needs to continue to promote technological adoption at the policy level, create financial assistance programs and embrace new innovations from startups into mainstream domains of business.

It is also going to be critical for the SMBs themselves to be more open to availing these services and consume the growing educational material available online.

For tech companies, the biggest challenge would continue to be able to design simple and intuitive products that could bring the millions of uninitiated SMBs under the digital fabric. With such steps in the right direction, the future for our SMBs looks really promising.