Why Indian SMEs are ripe for digital transformation

15th Jan 2019
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Every second, three Indians experience the Internet for the first time. By 2020, India is likely to have about 730 million people using the Internet, and by 2022, there will be more than 700 million smartphone users in the country.

What do these statistics mean for business? Simply that the new Indian consumer is online, connected and accustomed to an ease of use and instant access that traditional business models just cannot deliver. From my interactions with Small and Medium Enterprises (SMEs), I can say that most of them understand modern customers and realise their expectations cannot be met without sweeping transformation if they are to retain their competitive edge. The writing is on the wall – transform digitally or be ready to be edged out by nimbler competitors.

The SME sector in India has always been a key growth driver for its economy. According to a report by Ernst & Young (EY), the sector is expected to contribute up to 22 percent to the nation’s GDP by 2020. SMEs account for 45 percent of the country’s manufacturing output and employ 40 percent of its workforce. This is a thriving sector and new enterprises join the fray every day adding to the competition. These are digital natives with business models that are born in the cloud.

For example, BookMyShow uses technology to deliver its business premise – online ticketing for movies, plays and sports events. A digital news aggregator curates news articles on an online platform. These require agility and flexibility that only software defined strategies can deliver. Digital transformation for them lies in leveraging new technologies to ensure scalability and elasticity demanded by customers.

For BookMyShow, this means the ability to handle thousands of customer bookings simultaneously after a big release or before a big match without any glitches. For the online news curator, this means the ability to handle huge volumes of traffic on breaking news without compromising the customer experience.

While new age companies are looking to strengthen their technology-based products and services, older and more traditional SMEs want to transform their legacy infrastructure to keep pace with increasing competition. In a world of agile tech-based companies, older companies must modernise and transition to be a software defined business if they want to retain their competitive edge.

This is especially true of those organisations with a B2C business proposition. Modern customers are used to seamless on demand access and will not stick to a business that does not deliver just that. B2B enterprises cannot lag far behind either because competition is not far behind and digital transformation will mean improved profitability and revenues.

In this current environment of digitisation and transformation, it is interesting to note how traditional small businesses are adopting cloud first models. The best example I can give is of Chitale Dairies. One doesn’t normally associate dairy farming with cloud computing, but that’s exactly what they have implemented. RFID tags on the cows collect vital information on the animals’ health, nutrition, and more. The data is virtualised, interpreted and intelligible insights are sent to the farmers via SMS. They can then look after their animals better and substantially increase their earnings by guaranteeing high yields of the best quality milk.

New technologies have changed every aspect of the world we live in, and I cannot think of a single sector or industry that has not benefitted from it. From software defined infrastructure and multi cloud environments to digital workspaces and device management, Indian SMEs are keen to leverage all in their quest to push ahead. Of course, security remains the main concern for organisations across the board, and SMEs are rapidly moving away from a bolted-on approach to security, to more intrinsic strategies.

I am often asked if India’s digital transformation journey is at par with the rest of the world. And I always answer that it is ahead than the rest of the world by virtue of the tremendous opportunity it presents. This massive country of a billion plus people is still going online with more people discovering the Internet or operating a smartphone for the first time every second. The scale of digital transformation this country presents is tremendous and the Indian SME sector is well poised to take advantage of it.

There is significant interest in new technologies, including Artificial Intelligence and Internet of Things, but from what I see, cloud and mobility with a focus on security are the primary harbingers of change at the moment. 

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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