Why digital transformation has become necessary for MSMEs?

 

Digital revolution dates back to 1990s and currently, it has grown exponentially and transformed everything in its wake. Previously, digital technology used to be very costly and it was out of bounds for Micro, Small and Medium Enterprises (MSMEs). Now, things have changed and it is very much possible for anyone to adopt digital technology, be it small or medium or micro. The praise for making digital technology affordable goes to the Internet giants such as Google, Yahoo, Facebook, etc.

With business processes becoming automated, and less dependent on human beings, the technologies such as Cloud Computing, Internet of Things, SAAS, Machine Learning, Artificial Intelligence and are transforming the manner in which businesses are functioning.

What is Digital transformation?

A business can only achieve digital transformation by integrating digital technology into all aspect of its business. The digital transformation goes a long way in strengthening the workforce, streamline operations, alter products and engage customers for value addition.

Benefits of Digital Transformation for MSMEs

Increased customer service

With the help of AI, Chatbots, Machine Learning etc it is possible for Micro, Small, Medium Enterprises (MSMEs) to serve customers round-the-clock. This keeps customers happy and help in the growth of the businesses. Not to forget, all these things are happening without employing humans ie free of cost.

Cost Reduction

Machine Learning and Predictive Business Analytics are very much effective in finding out lacunae in the production and this leads to decrease in costs. For MSMEs a penny saved is like a penny earned as they work within tight budgets.

Accurate Decision making

The data is crucial for any business, irrespective of the size of the business. If you can easily access the data pertaining to current customers, prospective customers, competitors, then the same helps in taking correct calls in the field of marketing, production & sales through learning customer behavior, purchase pattern, current trends etc. The digital transformation makes this a reality.

Cut down human errors

Business Automation is another blessing by digital transformation. It brings down reliance on human beings to great extent and cut down the possibility of human error. This leads to enhanced productivity and efficiency.

High Profits

The digital transformation has many benefits and this is arguably the best. By making a transition to advanced technologies the quality and quantity of products increase, leading to enhanced profitability of the business.

Hurdles for MSMEs in transforming Digitally

High set up cost

Despite becoming affordable, certain digital technology can be a bit on the higher side for the comfort of certain businesses. This would act as a major spoiler for certain MSMEs to go for digital transformation.

Problems regarding integration

There are certain complexities as well. Some fields of the business where the human intervention is required can way lay your plans regarding digital transformation.

Traditional ones will be wary

There are certain traditional and old business might be reluctant for a change. They prefer status quo and will not show urgency in bring business to the digital realm.

Paucity of digitally trained workforce

To leverage digital revolution totally skilled workforce is required. If the current employees are not familiar with digital technology then the gap between digital knowledge and execution widens.

Digital transformation of small businesses in the times of COVID

The COVID 19 fear has thrown spanner into the strategies of many businesses. This pandemic has made several businesses to recast their current models to enhance value for the customers. So, the businesses should factor in the following areas prior to digital transformation:

1. Find new customers as the present ones are grappling with financial issues

2. The demand pertaining to a product diminished

3. Focus on creating new leads and products need customization in line with the demands

4. Make sure present customers are kept in touch via constant communications, courtesy and excellent customer support via digital medium

5. The properly organizing supply chain because most of the industries are afflicted by hurdles & broken supply chains. A future roadmap to be drawn to find an alternative as Covid shows no signs of abating.

6. Keep the motivation level of employees high at work by increasing engagement via collaboration, upgradation of skills and assigning new roles

Humongous scopes of digital transformation

The aspects that the digital transformation will aid MSMEs to concentrate better are:

Online Presence With consumers going virtual frequently for the last few years, it becomes imperative for companies to develop a website, mobile application or the e-commerce site for establishing their online presence.

Cloud-Based Solutions Companies have to explore cloud-based solutions such as Accounts, CRM, Team collaboration, etc. to smoothly on a daily basis.

Social Media Presence It has become mandatory to be on social media channels to expand to new horizons and explore new markets.

Data Tracking Through digital means you get backend support and analytics with which you can generate reports and gain knowledge about vital aspects. A huge amount of unused data is being wasted and it can be vital to generate business insights with which business can grow exponentially.

Concluding thoughts

So, it goes without saying that in the contemporary scenario small and medium enterprises are losing a lot by shying away from digital transformation. Going forward the SMEs will have to adopt digital technology to stay afloat in the market.