Digitalization of SMEs can be helpful for SMEs (small-medium-enterprises)?
Small and medium enterprises (SMEs) are gradually making a significant contribution to India’s GDP. Despite being considered the backbone of our country’s economy, these companies face innumerable challenges, in large part due to traditional practices and a lack of digital influence. Whether it’s intense competition, persistent customer demand, or even financing challenges — they are often an obstacle to the growth of SMEs. The digitization of SMEs can help solve this problem and help small businesses reach more customers and generate more profits.
For small and medium enterprises to be successful, they must use the latest technology and tools to increase workforce efficiency, reduce human error, and measure the parameters of growth in a concrete way. SMEs need to be digitized so they can grow faster around the world without the need for large investments.
Challenges Faced by SMEs
Infrastructure Issues — Infrastructure often requires public or private intervention and is neglected because of insufficient funding. Many SMEs are not aware of the various funding options offered by NBFC and banks. Most of them do not have the digital knowledge to gather information online.
Low productivity — Digitalization increases productivity in progressive companies by eliminating manual processes and making them technology-based. Traditional SMEs have slow processes and employees often lack basic computer skills. This hinders productivity.
Insufficient Funds — Funds are needed to market or promote products offered by traditional SMEs. Lack of digitization leads to minimal cash flow monitoring and a lack of cost-benefit analysis. Digital marketing can be cheaper than physical marketing that traditional SMEs cannot use.
Lack of innovation — Due to a lack of digital literacy, conventional SMEs are unable to find new ways to attract customers. With a large proportion of buyers now shopping online using their tablets or smartphones, traditional SMEs cannot attract them. Sometimes they cannot accept online payments or send electronic invoices.
Risk factor- As traditional SMEs rely on manual operations to sell their products, there is a high probability of human error in terms of quantities sold, payments made, total sales, total costs, etc. This results in lower accuracy and higher risk.
Higher costs — operating costs, advertising costs, and expansion costs are always higher for traditional SMEs than for digitization.
Lack of Training and Skills — Lack of knowledge about computer use, digital marketing, websites, social media, and web analytics deters traditional SMEs and has a negative impact on productivity. Nobody monitors daily sales, profits, and competition this way.
Benefits of digitization for SMEs
Better customer acquisition — With digitization, SMEs can better connect with their target groups and reach customers in every country for better visibility. Customer relationships can be managed more effectively and they can use a variety of tools to get an idea of the customer. This will contribute to better product marketing and create new sales channels.
Operational efficiency — As a digital SME, technology can help automate core processes and make SMEs more efficient. This will help make better use of resources and better logistical control.
Workforce Enhancement — Using digital tools, SMEs can identify areas where skills need to be developed and identify gaps in the workforce. It’s easy to track employee productivity, train them, and keep them updated with the latest concepts in digitization.
Risk Management — With the development of digital technology, SMEs can protect sensitive information and financial data with security software. This allows for better protection of physical assets through advanced monitoring and makes logistics more efficient.
Increase Productivity — Embedding digital tools allows employees to work faster and more efficiently. You can work remotely or anytime to deal with business emergencies immediately.
Innovation — By using digital tools, SMEs can better evaluate their business based on indicators. Activity metrics such as web traffic, process metrics such as sales and acquisitions, knowledge metrics such as consumer insights, and people metrics such as employee satisfaction can all help improve various aspects of a business with ease.
Cost Savings — Digitalization can reduce operating costs by automating critical processes and optimizing everything. In addition, in any country in the world, SMEs can open a business without spending anything on advertising.
Reduced Manpower — As most business processes are automated through digital tools, the need for Manpower is reduced. Human error is less likely and fewer observations are required.
Digital marketing trends for SMEs in 2021
Influencer Marketing — Influencer Marketing is effective in beauty, fitness, fashion, sports, and other similar industries. You are greatly influenced by important people. This may not be affordable for a small business, but if you know a local influencer or someone on a small scale that appeals to your customers, try working with them or mentioning them.
Social Media Marketing — Social media is a very important marketing tool for digital marketers. This is because potential customers and audiences spend so much time on this network. Many small businesses are already targeting their target audience through social media marketing.
Voice Strategy — Speech communication is one of the simplest and most common forms of human interaction. So it’s no surprise that people also want to use speech when interacting with their favorite technology and devices. One voice strategy that SMEs can use is to create Alexa Skills or other search engine Actions that can be used to reach customers using the Alexa or Google Home voice assistant.
Innovative Content — Content is the digital marketing currency, and while there are some basic types of content that are likely to exist, new types emerge from time to time that has temporarily revolutionized the way people consume content. The current trend is interactive content that viewers can use to actively engage with brands.
Final conclusion
Digitalization in the service sector and manufacturing specifically for SMEs will help increase efficiency, profitability, and overall growth. This in turn benefits the economy and allows maximum benefits and customer satisfaction.
