What digital tools must MSMEs embrace to survive and scale

Digital transformation does not mean using digital tools like cloud-based business applications, leveraging Industry 4.0, etc., it is about analysing and using relevant data generated from business activity to optimise business operations and processes.

What digital tools must MSMEs embrace to survive and scale

Friday August 20, 2021,

6 min Read

Digitisation of micro, small, and medium enterprises (MSMEs) can add $156-$216 billion to India’s GDP by 2024.

Digital tools can avoid complete business disruption for MSMEs during a crisis as we are seeing now. Many small businesses, which demonstrated their willingness and ability to transform their business, survived while others perished.


Whatever be the size or industry of the MSME, going digital has proven to be advantageous by way of cost reduction, standardisation and automation of business processes, minimising the reliance on manpower, and enhancing competitiveness by gaining insight into consumer behaviours and experiences, among many other benefits. 

For digital transformation to be effective and successful, technology adoption by companies, including MSMEs, must be integrated into all areas of the business. 

What’s digital transformation means for MSMEs?

For MSMEs, digitalisation and digital tools have proven to be beneficial as they helped increase their value and productivity before the COVID-19 pandemic. After it hit the world, its importance only increased.

While some MSMEs could not catch up owing to cash flow crunch, lack of leadership and expertise, and lethargic approach, the pandemic opened the eyes of the MSME leadership to the reality of the need for digitalisation as a choice between survival and death.

In general, the contemporary digital transformation initiatives have shifted the business and process online; leveraging digital tools to automate workflows, reduce cost, and gain business insight; using social media platforms for marketing, sales, and recruiting; moving systems to cloud ecosystem and availing of SaaS applications, and taking advantage of data analytics for risk assessment, insight into business trends, and drive sales growth.

The implementation of new technologies has facilitated or resulted in the way organisations manage their operation — remote working, online selling, virtual customer service and support, self-service models, and access to SaaS applications. 

Digital tools, of course, differ from sector to sector and region to region. While some digital tools are generic to all organisations, many are specific to the industry and/or the individual organisation. 

What digital tools must MSMEs embrace?

For SMEs to stay afloat and successful in the new world, especially in the post-COVID-19 future, they need to make investments in skills, market development, technologies, and managing change. 

Surprisingly, it doesn’t need huge financial investment in technology, as most digital tools required are either free or incredibly cheap, vis-a-vis the benefits they provide. Also, with the cloud computing and SaaS environment, organisations don’t have to make huge capital investments, unlike before. 

Digital transformation involves changes to the way you operate and deliver value to your customers. It is not just a superfluous change of digitalising the existing unproductive processes it is a cultural change that calls for organisations to continually challenge the status quo, experiment, and be ready to accept failure. 

How far the leadership takes up this challenge is what will make the difference for MSMEs.

At present, you can find a wide range of digital solutions that can support and accelerate the continuity and scale-up of your business. 

Let us take a look at what digital tools can help MSMEs in their growth trajectory:

Connectivity and collaboration

Today, connectivity facilitates the availability of access to information quickly on any device, which can be easily shared among all stakeholders. 

Connectivity tools help organisations, including MSMEs, to become more agile because new team members have instant access to the platform to perform their tasks. It also promotes the flexibility of remote working when social distancing is in force. 

While digital technologies help enterprises manage continuity, they could continue as it is or selectively choose what they need even when the situation gets normal, leading to achieving efficiency, productivity, and cost reduction. 

This could help organisations transition a chunk of their fixed labour cost to variable costs by way of availing of freelance or on-demand human resources. 

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Technologies to adapt to and address lockdown

Smart manufacturing in factories can help companies tide over the difficulties of lockdowns. Emerging technologies like AI, IoT, Robotics, AR, ML, etc., can be leveraged by enterprises, including MSMEs, to take over the works that were hitherto done by human resources manually.  

These technologies help automate and control remotely many of the processes in manufacturing factories, whether it be scheduling production lines, monitoring inventory movements within the shop floor, managing procurement and distribution in the supply chain, and supporting customers and field services. 

This trend would continue and improve upon in future by bringing in productivity and value to the customers. 

Effective remote work monitoring

The COVID-19 pandemic and work-from-home have made it imperative for employers to find the right tools to monitor the productivity of their employees. Many of these tools have been designed to provide insights about business processes and completed tasks to employers. 

For many employers, time tracking is critical to figure out how productive employees are when working remotely. The availability of data is vital for both managers and employees to get optimal results. 

With the right technology and software in place, businesses can maximise their employee’s ability to work remotely, efficiently with minimal supervision. This is one important element that helps organisations scale to grow.

Data management and analytics

It is a foregone conclusion that MSMEs need business applications like ERP and CRM to capture data to analyse them from various internal and external sources. 

In recent years, the volume of data has increased faster than most companies’ ability to process it. Today, there are many tools and apps to help you to process relevant data, which can help in making informed decisions from further analysis, study, and research. 

Many data capturing and analytical tools are available in the market at cheap fees on the subscription models. Most of these tools don’t need any technical knowledge or training to use. 

In fact, users without any coding skills can use the no-code application development tools to develop apps quickly at a low cost.  

Cloud and SaaS makes it easy for MSMEs

Cloud and SaaS ecosystems have made it easier for MSMEs to implement the digital tools required for their sustainability and growth. 

Business applications, like ERP, CRM, and Data Analytics; Industry 4.0 tools for advanced adoption in manufacturing and supply chain; customer experience or virtual remote communication; and office tools or no-code app development platforms — are available in the cloud environment on a pay as you use — on-demand subscription model — at cheap fees.

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Edited by Suman Singh