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Unless the Economic Package Reaches to SMEs, Many may not survive

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The new normal has brought about a need for digital transformation (DX) in Small and Medium-sized enterprises (SMEs) and has made it one of the top investment priorities for them. Digitalization – a mere good-to-have process for Indian SMEs – has now become the most critical requirement. The introduction of smart phones, and smart devices has created a tectonic shift in the way content is consumed today. The rise of Generation Z along with the advancement in technologies and global connectivity has caused SMEs to adapt and invest in these technologies to enhance their reach, revenue, resilience, and have a competitive advantage.

 

SMEs have been contributing significantly to the expansion of entrepreneurial endeavours through business innovations. With the use of emerging technologies, SMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets. Having said that, some SMEs have already started testing the waters. The current landscape of SMEs digital transformation journey ranges from new players entering the game with just a website and an email id, to advanced players with online marketing, ERP applications, and ecommerce tools at their disposal.

 

Secondly, the micro, small and medium enterprises (MSMEs) are faced with an existential crisis due to contraction in the economy in financial year (FY) 2021 amid the Covid-19 outbreak, revealed a report by Crisil. The 5% contraction in the Indian economy expected by CRISIL this fiscal — wrought by the Covid-19 pandemic — will significantly hurt MSMEs across sectors.

 

Transformation is, however, a continuous process. It is a journey where businesses move away from their orthodox business models and legacy architectures, and adapt to the current technological landscape and environment to create new markets that support innovation and growth. SMEs have been contributing significantly to the expansion of entrepreneurial endeavours through business innovations. With the help of emerging technologies, SMEs are widening their domain across sectors of the economy, producing diverse range of products and services to meet demands of domestic as well as global markets.

Most of the SMEs business processes are offline, physical, and hence, manual. The only digital properties they possess are enterprise email and website. The email IDs are used for internal as well as external communication whereas the website is used as an information sharing portal. They do not fully utilize the capabilities of their digital properties. However, they have some level of social media presence, and also get involved in a bit of digital marketing. Some of the sales is through online marketing. They use ERP and CRM software for their internal business processes.

Digital Transformation is here to stay. SMEs will have to make room for digital transformation in their overall business strategy. SMEs need to embrace the technological advancements to become completely agile and flexible in order to scale, and meet increasing customer demands.

 

 

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