Digital empowerment of SMEs Is The Need Of The Hour

India has approximately 6.3 crore MSMEs in 2022. The Indian MSMEs sector contributes about 29% of the GDP through its national and international trades. This MSME segment is only slated to grow, with enterprises across India scaling to take advantage of digitization. However, while India has grown beyond metros long ago, specific services expertise is still primarily available only in metro cities. Also, the challenges of MSMEs are very different from larger companies. Hence, they require a partner who understands their niche requirement, strategizes a solution, and helps see it to implementation and execution. Strategix passionately delivers its Advisory and Implementation Services in Management Consulting to clients varying from MSME sectors to large Conglomerates. Mukul Goyal, the co-founder of Stratefix Consulting, speaks exclusively on the challenges faced by MSMEs, especially in the smaller cities.

Q1. How has the Indian SME landscape changed in the last one year?

Ans. India is one of the fastest-growing economies in the world. In the last one year, the economic growth has steadily accelerated and, most importantly, remained remarkably stable. This growth has been driven by robust socio-economic policies of the government, an influx in domestic and foreign capital, and a rise in disposable income and consumption, among many other positive attributes. One other major factor that is being touted as the backbone of India’s economy is the Small and Medium Enterprises (SME) sector. Whether it is agriculture, manufacturing, or service industry, SMEs are mushrooming in a myriad of sectors across the country. As a result, the working methodology has completely transformed, be it HR, IT, and Accounts.

Q2. What are the key mistakes MSMEs & SMEs make in terms of implementing Technology?

Ans. SMEs have adapted to the situation in some form or the other, but they now need to take a more long-term approach to digital transformation. Data across the globe shows that the success rate of digital transformation is still at the low 20 percent. The majority of the challenges come from

  • No buying from the existing team
  • Unclear Requirements
  • Not setting the right priorities
  • Being looked at as a cost but not an investment
  • Lack of patience
  • Lack of responsible people to own the project
  • Tech partners are selected based on cost but not quality

Q3. Which division in an SME organization (HR/Sales/accounting) needs digital-first initiatives, and how do you rate Indian SMEs in that aspect?

Ans. The need of the hour is for industry stakeholders, government policymakers, and enterprises to work together to enable the digital empowerment of SMEs, which have been left behind. Big tech companies have realized the opportunity as they are actively helping Indian SMEs adopt newer technologies like cloud computing, AI, process automation, IoT, and data analytics to make enterprise processes like accounting, inventory management, sales, marketing, HR, customer service, etc., more efficient and at par with their extensive global counterparts. For example, the accounts team in SMEs is usually digital as it is compliance-driven. HR and Sales both need to be transformed digitally immediately as the entire landscape is transitioning from the requirement of good manpower to smart manpower.

Q4. You have consulted various SMEs which are thriving today. What are the critical tech initiatives that have transformed their business?

Ans. In a perfect setting, a company’s digital transformation is led by the CEO in partnership with the CIOs, CHROs, and the rest of its senior leaders. However, digital transformation requires tremendous cross-departmental cooperation within a company to pair rapid application development models with business-focused philosophies effectively.

Usually, sweeping changes in customer expectations regarding products and services or a company’s desire to pursue new business models and new revenue streams inspire a company to undertake a digital transformation. Apart from these, some other points are:

  • Early adoptions made their tech and data-based decision making better
  • A clear understanding of reports and accountability with hierarchy
  • Strategy-driven professional-approach help to grow easily
  • Involving experts from outside the company to meet the goals.

Q5. Which Indian industries are utilizing the right technologies to transform their business, and what are the industries that lack using Technology?

Ans. Futuristic businesses and start-ups are exploring new avenues of re-inventing their business activities and industries altogether to compete with and dislodge incumbents. The last decade alone has witnessed exponential progress in technological disruption – think Airbnb, Paytm, Netflix and Uber.

And this disruption is gradually influencing every industry, including banking, healthcare, hospitality, construction, manufacturing, packaging, logistics, and insurance. The most digitally disrupted industries are:

  • Media and Entertainment
  • Technology products and services
  • Financial services
  • Retail
  • Telecommunications
  • Education

Q6. What suggestion would you like to provide for start-ups and MSMEs who are scaling up to the next level?

Ans: I would suggest to

  1. Be a friend of Technology in every sense.
  2. Learn about the usage of Technology in your sector and adopt it ASAP. A basic understanding of tech and the jargon used in the tech world is a must.
  3. Have people adopt data-based discussion and data-driven decision making.