~As per a Google-KPMG 2017 report, 68% of SMEs in India are offline and operate with traditional methods and legacy tools, Only 2% are digitally engaged~
Small and Medium Enterprises (SME) form the backbone of the Indian economy and contribute immensely to the GDP numbers. As per the annual report of MSME ministry 2017-18, the sector, which has a vast network of 63.38 million enterprises, contributes more than 28% to the GDP and employs around 111 million people. In terms of volume, the SME sector stands next to the agriculture sector.
Thus, the role of the sector cannot be emphasised enough, and if given the right push, it has the potential to contribute even more. MSME Minister Nitin Gadkari said in the years to come, it will be his endeavour to raise the contribution of the MSME sector to the country’s GDP to 50%.
That said, one of the ways that SMEs can grow further is through a digital transformation where business owners are willing to use the latest technology in their daily operations to drive efficiency, accuracy, innovation and reduce turnaround time. Although SMEs have started realizing the benefits of the digital mode, still, the adoption is extremely low.
As per a Google-KPMG 2017 report, 68% of SMEs in India are offline, have no digital presence and continue to operate with traditional methods and legacy tools, and just 2% are digital engaged.
The numbers show that SMEs are still engaged in old practices and there is no digital uptake, which can be due to various reasons such as lack of awareness, lack of skilled labour, funds, low IT infrastructure, etc.
But, there’s no denying the fact that digital opens up many avenues for SMEs. As per the report, digital SMEs grow revenues and profits up to twice as fast as offline counterparts, capture greater efficiencies, communicate effectively, reduce lead time, and more.
Moreover, by adopting digital practices such as CRM, online payments, selling on e-commerce platforms, the latest machines at manufacturing units, etc., SMEs can meet client expectations and bring in innovation. By upgrading their IT infrastructure, business owners can reduce losses, improve employee productivity, enter new markets and make their companies agile.
In a bid to support the SME sector for digital initiatives, the Indian government has taken several initiatives such as online filing of taxes (GST), a scheme for promotion of innovation, rural industries and entrepreneurship (ASPIRE), MSE-CDP platform, technology development centres providing skilling on cutting edge technology to MSME and more.
Moneycontrol has also kickstarted an initiative to help SMEs to digitise their operations through Easybiz. Under Easybiz, SMEs can use tools and services such as customer management, invoicing, online collections, payment reconciliation, payment reminders and GST filing to simplify business operations and increase efficiency.
The strong push from the government and private sector can help SMEs to digitalize, increase its contribution to the Indian economy and flourish further.
Article by Moneycontrol.com