- By Dr Pradeep Racherla & Dr Ram Nidumolu
Technology for MSMEs: Small and medium enterprises (SMEs) are the backbone of our economy and account for more than 30 per cent of the GDP and 45 per cent of all manufacturing activity. The pandemic has hit them really hard and also forced them to innovate and adapt. SMEs, which have been after used to the ‘physical’ model, now experiment with ‘digital’ techniques to run their corporations. A kirana store now utilizes Google Sheets to retain inventory and handle receivables. A plastic molds manufacturer has digitised his item brochures and utilizes Zoom to communicate with his shoppers. A fertilizer and pesticide distributor utilizes WhatsApp video and pictures to study farmers’ crop situations and recommend the proper merchandise.
SMEs have adapted to the predicament in some kind or the other but they now want to take a more extended-term method to digital transformation. Data across the globe shows that the good results price of digital transformation is nevertheless at the low 20 per cent. SMEs face incredibly distinct troubles when it comes to digitisation of their corporations. In our knowledge of working with various MNCs and compact corporations across the world, we see 5 distinct digital transformation challenges that SMEs face. This report explains the challenges and delivers options to program out the journey.
FOMO (Fear of missing out): The initially is ironically a social challenge. SME owners are components of company networks exactly where there is continuous chatter about digital. This creates substantial stress to go digital. However just since the world is going digital does not imply your company ought to go digital. It’s a fantastic thought to ask incredibly distinct concerns. What are the probabilities that your item or service can be delivered digitally? How digital are your shoppers in consuming or shopping for your merchandise more than digital channels? More importantly, are the shoppers prepared to spend for that extra worth that digital brings? If the answer to some or all of these concerns is ‘no’, then it is worth waiting out.
Go significant or go home: A well-liked notion amongst SMEs is that if you want to go digital, you invest significant and be complete. This creates troubles at each ends of the spectrum. Scared about the magnitude of work and investment, lots of do not even attempt. The other individuals invest as well a great deal and fail to reap the advantages. Going significant is a error. Digital transformation is an experimental exercising. One demands to attempt out various compact issues just before solidifying and adopting a distinct technique. Experiment with various digital tips, launch and gather information, and then subsequently figure out the greatest ones to maintain and invest.
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Where to start off? Not figuring out exactly where to start off is a widespread dilemma. Even even though company owners are completely convinced about digital, there is no distinct framework to inform them exactly where to start off and how to start off. Just as a kid goes by way of development phases, a digital technique also evolves by way of 3 common stages of maturity: stage 1 exactly where firms just sense digital as an chance. One can take compact actions. e.g., invest in Facebook or LinkedIn marketing with a concurrent reduction in standard marketing or make your sales help and client connect digital.
Stage 2 is exactly where firms use digital to connect stakeholders in the worth chain, e.g., automating a raw material ordering program to boost efficiency and minimize wastage. Stage 3 is exactly where firms are capable to definitely use digital to produce new company models or new merchandise/services. e.g., a subscription service or an e-commerce platform. SMEs need to map their present stage in this maturity ladder and define the distinct activities/sources necessary for experimentation.
Start compact but feel significant: A fantastic spot to start off is in two places: 1) To basically improve the present digital presence. For instance, how fantastic is your web page or do you even have a web page? Is the web page helpful adequate to allow company transactions and uncomplicated communication with your shoppers? 2) How a great deal are you spending on promoting and marketing? Is it probable to improve your present budgets in digital marketing and measure no matter whether it is delivering ROI? These are uncomplicated approaches to start off and provide you with compact wins that motivate your digital transformation progress.
Who will do digital? Most digital initiatives fail not since of technologies but the human element. The greatest error that compact company owners commit is to manage the procedure. This is a recipe for disaster. Identify and train at least two of your workers who can come to be your wingmen in the journey. Involve them in the selection-producing procedure, empower them to make choices based on information and feedback from the shoppers, and more importantly train them in utilizing and deploying the new technologies that you have adopted. You will see that in the end these essential workers will be the main drivers of good results.
Digital transformation is not uncomplicated for SMEs. Remember that digital transformation occurs if you are open to possibilities, capable to feel compact and experiment, have a laser-like focus on information associated to functionality and ROI, and are capable to empower your workers to drive the initiative. If accomplished proper, it has the energy to propel your SME into a sphere that is far above the competitors.
Dr Pradeep Racherla is Professor of Marketing at Mahindra University, and Dr Ram Nidumolu is Professor of Organizational Behavior at Indian School of Business. Views expressed are the authors’ personal.