Why SMEs need a digital way for growth in today’s business ecosystem
In an increasingly digitised business landscape, it would only make sense for SMEs to go the digital way in order to achieve optimal levels of productivity and scalable growth in the near future.
The SME sector in India is the primary contributor to the country’s economy. Yet, given its size and scale, there is potential for much greater growth if these businesses strategically digitise their operations. As per a NASSCOM report, the contributions from SMEs account for a significant part of most economies around the world, constituting close to 60 percent of total employment and up to 40 percent of the GDP in emerging economies.
Additionally, while SMEs in India were earlier largely in the manufacturing sector, they are increasingly becoming more prominent in the Services sector today. According to a report by CII, MSMEs contribute to approximately 6.11 percent of the manufacturing GDP and a significantly larger 24.63 percent of the GDP comes from activities in the services sector.
The manufacturing industry requires businesses to invest heavily in machinery and tools. However, upgrading equipment is expensive and the space is limited, meaning production is also restricted to, and affected by such variables. Now, with the growth in the number of service sector SMEs, there is a greater need for these businesses to invest in tools for digital facilitation over equipment. Let us take a deeper look into the scope -
Facilitation through government and private sector digital initiatives
While disruptive technologies are rapidly changing the business ecosphere, the only way SMEs without an existing digital presence can tap into the new wave is to first start from the basics and then enhance these with advanced technologies.
Over the last few years, the government’s Digital India initiative, with applications such as Aadhaar services and UPI-based ‘BHIM’ for digital transactions have facilitated digital transformation across the country to a large extent. This has also opened up multiple avenues for SMEs to participate in digital-centric practices across industries, especially pertaining to the ICT space.
In this direction, tech giants in the private sector have also introduced a number of initiatives to digitally empower SMEs. Recent reports reveal that a majority of SMEs in India are still operating offline. To bridge this gap and encourage SMEs to hop on board the digital train, the company launched its ‘Digital Unlocked’ program.
Digital Unlocked comprises free online courses that helps SMEs to enhance their businesses through video tutorials on a number of topics relevant to the business landscape in India. These range from the basics like setting up a website, to the more complex such as introducing businesses to the fundamentals of emerging technologies. In this way, SMEs have a world of opportunity to take their businesses online and strategically customise them according to their specific goals.
Enhancing digital presence by implementing emerging technologies
Social media platforms such as Facebook, LinkedIn, Instagram, and Twitter have made it easier to target customers with advertising, marketing based on specific demographics, but the insights gathered from these channels require further analysis by human teams. However, with the advent of emerging technologies such as artificial intelligence (AI), big data and data analytics, businesses have been able to take their digital operations a notch above.
With these advanced tools, companies are able to automate several processes to gather instant and accurate insights that are often beyond the reach of human expertise. This helps free up time for organisations to automate the basic repetitive tasks, and shift the focus of human teams on building greater value for the business. Thus, to further enhance their digital transformation, SMEs will benefit greatly by implementing emerging technologies into their operations.
Improving customer engagement
Companies today are increasingly using AI-based tools to optimise processes across functions - be it internal processes or client and customer-facing ones. Backed by machine learning (ML), AI tools are able to process vast amounts of data to gather accurate insights that companies can use to gauge the effectiveness of their business strategies. Some of the benefits of incorporating AI tools are scope for personalised attention to consumers, tracking preferences and behaviour, and the ability to diversify business channels while streamlining operations to cut costs.
One of the simplest yet most effective tools that has emerged as a popular choice amongst businesses today is the use of chatbots on their websites and apps. Chatbots are conversational tools that can be programmed with predetermined data in order to instantly address basic queries and requests from clients and consumers. Powered by ML and natural language processing, they have the ability to hold human-like conversations, as well as become smarter with every interaction.
Moreover, they can track keywords to deliver insights on consumer behaviour and preferences. Based on this, they are able to independently send clients/consumers customised recommendations, offers and promotions, as well as follow up on conversations. This, in turn, leads to higher customer satisfaction and retention.
Businesses need to shell-out a fair sum to employ servicing agents to carry out the same tasks that chatbots can do in an instant with greater accuracy and abilities. Moreover, based on the insights gathered via chatbots, SMEs can take a deeper look into consumer/client needs and realign their processes and strategies to meet these needs more effectively for the long run.
The development of the SME sector is imperative to achieve goals such as financial inclusion, bridging gaps in the distribution of wealth, as well as generating a greater number of employment opportunities across both urban and rural parts of India. Additionally, the sector can play a major role in facilitating entrepreneurs to step in to create businesses that are at par with global standards. In an increasingly digitised business landscape, it would only make sense for SMEs to go the ‘digital way’ in order to achieve optimal levels of productivity and scalable growth in the near future.