India SMEs embracing the digital age
Almost nine in 10 of Indian SMEs have a digitalisation strategy in place, according to a new survey carried out by software consultancy Capterra.
Its research discovered that 88% of the participants confirmed they have implemented or are implementing digitalisation. “This trend underscores the growing awareness of the benefits of digital transformation and explains the widespread adoption of operational digitalisation plans among businesses,” Capterra said in its analysis of the results.
Sukanya Awasthi, Content Analyst for Capterra India and the ‘Digitalisation of Indian SMEs’ survey, said: “The Covid-19 pandemic has led to a shift in consumer sentiment and behaviour across the world. Technologies such as blockchain, the Internet of Things (IoT), 5G, cloud computing, AI and data science have changed the global economy, and being a cornerstone of this economic development, SMEs have also realized the need to digitalise their business models.”
The survey found that an 82% of SME decision-makers consider digitalisation to be either “very important” or “critical” for their business growth. An additional 17% view it as “moderately important,” while only 1% see it as “minimally important”.
The areas on which SME decision-makers are focusing their digital effort are:
- Accounting (43%)
- Marketing (42%)
- Customer service (41%)
- Project management (40%)
- Staff training (40%)
Capterra said: “Accounting is an area that is possibly prone to manual error, and such errors can have serious impacts on the finances of the company. Digitalisation in the accounting sector can enable accountants to analyse massive volumes of data potentially quickly, spot instances of fraud, and offer financial insights.
“Similarly, marketing is another area where digitalisation can help marketers automate marketing initiatives like sending recurring emails, messages, and notifications. It can also help marketing teams increase awareness about their brand using software such as brand management software and marketing automation software.”
Among the key motivations for digitalisation reported by respondents were:
- Improving customer service and satisfaction (46%)
- Simplifying operations and workflows (40%)
- Exploring new business models and revenue streams (36%)
- Minimising human errors (32%)
- Ensuring compliance with data security regulations (32%)
The survey also highlighted some examples of successful digitalisation initiatives. One notable example was the introduction of chatbots to improve customer service and satisfaction. The adoption of generative AI tools was also identified as a potential game-changer in catering to customer queries through chat windows driven by artificial intelligence.
In response to improved or implemented digitalised processes, respondents reported various benefits, including increased efficiency (42%), improved customer satisfaction (41%), higher profits (34%), improved employee satisfaction (33%) and enhanced cybersecurity (32%).
Capterra’s report said: “This survey offers valuable insights into the current state of digitalisation among SMEs and enterprises, revealing its growing importance as a critical factor for business growth, efficiency, and customer-centricity. As the world continues to embrace digital transformation, businesses are recognising the value of leveraging innovative technologies to remain competitive and meet evolving customer demands.”
The 2023 Digitalisation of SMEs survey was launched between 25 May and 7 June 2023 to managers, senior managers, or CEO/founders who are full-time employees. It was undertaken by 435 respondents, of which 341 are SMEs, and 94 are enterprises (with more than 250 employees).
A separate report carried out for the Indian Council for Research on International Economic Relations (ICRIER) found that 80% of small businesses in India surveyed said their company’s sales and turnover increased as a result of integrating with eCommerce platforms.
“This could indicate that adopting digital tools and processes may be beneficial for businesses as they enable them to efficiently collaborate and access all the information, resources, and systems they require from various devices and locations,” according to ICRIER.
