Digital is the new normal. Globally, businesses are fast embracing digital technologies that bring a paradigm shift in their operations. In the last decade, digital disruption has renewed competition, placed innovation at the centre of business strategy, and opened up new markets.
Though mobile, cloud and Big Data are the buzz words today, a gamut of new-age digital tools including M2M, Internet of Things (IoT), Artificial Intelligence (AI) and analytics are set to be the next set of agility drivers. Together, these tools enable collaborative innovation, continual governance, consolidation of data systems, and upgraded billing and charging.
India's digital transition is gaining global recognition. While large-scale businesses have been the bellwether of digital transformation in the country, the SMEs (small and medium enterprises) are now aggressively pivoting towards digital adoption. The fact that SMEs in India show a 14% year-on-year rise in Information and Communication Technology (ICT) expenditures underscores their commitment towards digitisation. SMEs in India have realised that going digital will enable them to increase efficiency, add value to their offering, and lead to exponential growth in business.
The digital divide between SMEs and large corporations is now getting bridged with the steady advancement of the former towards digital adoption. A crucial factor in this transition are IT companies which not only help digital transition, but also drive SMEs towards double-digit growth. Take for instance, the jewellery industry in Kerala. Some of the most prominent business houses which commenced operations as small jewellery businesses have now effectively deployed ICT solutions and expanded their presence to explore the vast customer base across the country.
This is just the beginning for the country's SME sector, which is projected to grow by leaps and bounds. The growth of the SME sector will further accelerate the overall development of the nation. According to Ernst & Young, the Indian SME sector's contribution to the country's GDP is expected to increase to 22% in 2020. It makes immense business sense for the SMEs to go digital for they employ a significant portion of the country's workforce and contribute majorly to the manufacturing output.
Though SMEs are open to the idea of going digital, their usage and access to the latest quality technology solutions is limited. A recent report by KPMG says that 63% of SMEs still function offline, using traditional methods and legacy tools.
Major hurdles in SMEs' digital transition include budgetary constraint, and a lack of adequate understanding and guidance on the manner technology can be integrated in their businesses. Shortage of skilled manpower to manage technology setups is another constraint that needs attention. However, no barrier is big enough to stop innovation and dedication.
Smart interventions like deployment of scalable and reliable connectivity solutions can help SMEs easily tide over these barriers. Generally, the degree and complexity of the ICT requirement for each SME differ, depending upon the nature of their business. Therefore, SMEs need to adopt only those end-to-end ICT solutions which will help them achieve operational efficiency, reduce cost, provide seamless connectivity, improve productivity, and improve customer experience.
End-to-end ICT solutions ensure business can compete with any large organisation while offering quality services to its customers. Given the high growth rate and rising contribution to GDP, it is evident that the future belongs to SMEs. Being a part of the ongoing digital renaissance is the key for the SMEs to unlock immense opportunities and conquer unchartered territories. After all, the mantra today is 'go digital, or go home'.
(The writer is Vice President for Business Operations - South (SME) at Tata Docomo Business Services)