Small and medium-sized enterprises (SMEs) serve as the backbone of our country accounting for a significant share of its GDP and manufacturing activity.
The sector has been heavily impacted by the pandemic, which has pushed businesses to innovate and adapt. SMEs that were earlier dependent on the physical paradigm are increasingly experimenting with digital means of operation. For instance, to keep track of inventory and manage receivables, a grocery shop now utilises Google Sheets.
A fertiliser and pesticide distributor examines farmers’ crop conditions using WhatsApp video and photographs to suggest the best products.
SMEs have modified in some way to the circumstances, but they now need to implement a more long-term strategy for digital transformation. SMEs confront unique challenges when it comes to digitisation and in this article by India Technology News, we will analyse the key challenges SMEs face to embark on the journey of digital transformation.
Who will be in charge of digital?
A number of digital endeavours fall due to the human factor and not the technology. The most common blunder made by small business entrepreneurs is trying to manage the process. This is a tragedy waiting to happen. Recognize and train at least three employees who can accompany you on your digital transformation journey.
Incorporate them in the decision-making process, provide them with the authority to make decisions based on data and customer feedback, and most importantly, train them to utilise and deploy the new technology you have implemented. Gradually you will observe that these employees will be the primary driver of your digital transformation success.
Getting involved in a rat race
SME owners are part of business networks where digital is frequently discussed. This puts a lot of pressure on individuals to go digital. However, just because the rest of the world is going digital doesn’t imply your firm should, too. Asking elaborate questions is a wonderful idea. Is it possible for your product or service to be delivered digitally? How digitally savvy are your customers when it comes to consuming or purchasing your products? More importantly, are customers ready to shell out a premium for the added value that digital furnishes? If your answer is no to any or all of these questions then it is better to wait than to make decisions in haste.
Where to begin with?
Another common challenge in this regard is not knowing where to begin. Even if business owners are confident that digital is the way to go, there is no formal structure that tells them where to begin or how to begin. A digital strategy, like a child, progresses through different stages of maturation: In the first stage, businesses notice digital as an opportunity. They can begin with small steps like investing in Twitter or LinkedIn advertising while cutting back on conventional advertising or turning their sales assistance and customer service into a digital experience.
Firms using digital tools to connect to stakeholders in the value chain come under Stage 2, for example, automating a raw material ordering system to bolster efficiency and eliminate waste. Finally, stage 3 is when businesses can truly leverage technology to create new business models or products and services.
SMEs must evaluate their current maturity level on this maturity ladder and identify the relevant activities and resources required for taking the next step.
The notion of a hefty investment
Many SMEs believe that if they want to go digital, they must invest heavily and comprehensively. This results in issues on both ends of the scale. Many individuals are afraid to try because of the amount of work and investment required. Others put in too much money and don’t notice any returns. Digital transformation is a learning experience. Before deciding on and implementing a specific approach, it is essential to try out a few modest things. Experiment with a variety of digital ideas, launch them, gather data, and then decide which ones to preserve and invest in.
Begin small yet dream big
SME owners can begin with focussing on two areas-:
1)Improving their current online presence. For instance, how excellent is their website, if they have one at all? Is their website useful enough to facilitate commercial transactions and customer communication?
2) What percentage of their revenue is spent on marketing and advertising? Is it possible to improve their present digital advertising expenses while also defining whether they are producing a return on investment? These are simple ways to get started, and they will offer them small successes that will help them stay motivated as their digital transformation advances.
For SMEs, digital transformation is challenging. It is important to remember that digital transformation occurs when you are open to new ideas, ready to experiment and think small and able to empower your people to lead the endeavour. If done rightly, it has the potential to catapult your small business and carve a distinctive niche in the industry.
