Digital Transformation Initiatives for SME’s
The major challenge that today’s world is facing is digitization. SMEs are favorable for the heterogeneous group. In the digitization, there are two types of runners one who are developing new technologies and other who have already adapted to advance technologies. If we look forth for internal capacity and resource then, SMEs do act as a homogeneous option for micro enterprises and medium sized companies. So, it can be assumed that business challenges differ on industry level and every SME requires different support when it comes to being digitally active.
Small and medium sized enterprises are considered quite important for creating jobs as well as promoting the economic growth of the countries that are developed or developing. The impact of SMEs in the ICT (Information and Communication Technology) and mobile world plays a significant role in addressing the developmental challenges like sustainability and service delivery.
Covid-19 is believed to be a global epidemic which is sure to persist for long till we find the cure for it. Fear of contamination has led to cancellation of travel and booked events all across the world. This fear has finally caused disruption in the supply chain which is sure to cause significant change in the 2nd quarter earning all around the world even if it ends in the month of May. To face digitalization in this deadly situation where Covid-19 is ready for war, SMEs enable a legal framework that needs to be flexible for neo-technology and future proven result orienting. Moreover, it needs to offer transparency, fair deals, well operational level, functional from home for different companies, as per business specific requirements.
The vendors related to such technology and infrastructure have assumed capitalization of power that is accompanied with incredible technologies such as Cloud, Mobile, Social, Big Data, Sensors, etc. These technologies provide next generation solution aided with the use of nexus applicable forces. Digital transformation aims for the evolution of new technology that as per the demand of the customers offers scalability and elasticity.
Below are the statistics that display the IT expenditure of SMEs across the globe in 2017, 2018 and 2019. As per the forecast, it has been revealed that IT hardware, software and other business services may involve expenditure of 684 billion US dollars.
IT Expenditure from Small-To-Medium-Sized Businesses (SMB) Worldwide in 2017, 2018 And 2019 (In Billion U.S. Dollars)
As per the changing trend, everything is becoming digital and therefore small businesses are aiming to get adapted to digitization. For example, India based company, Chitale Dairies used cloud computing to regulate good yield of quality milk. This technology implemented RFID (radio frequency identifications) tags on the cows to collect the information of the animal’s health and nutritional requirements. These tags record the data which was followed with visualization, interpretation and forecasting of the insights. The insight report was further conveyed to farmers in the form of SMS.
How can digitalization assist in business survival and growth amidst corona pandemic?
- Digital infrastructure -
In the current scenario, world has witnessed constant rise of epidemics such as SARS, Ebola, Zika virus and Covid-19. All across the cities, one may notice infrastructure innovation to safeguard the physical system that helps to be safe during natural disaster. But, currently digital infrastructure needs to get strengthened to fight back the public health crisis. Digital infrastructure is worthier with the addition of artificial intelligence in public health response. Analysis of larger data in relation to citizen movement and health is needed to be monitored to prevent the spreading of epidemic Covid-19.
- Banking sector -
According to the current requirement, it has been expected that huge change would gear movement of banking from traditional to digital banking. The traditional banking is going to create a dynamic change in the banking technologies with the trail of digital transformation. In the Indian scenario, it has been reported that 27 PSU banks are on the path of consolidation to other larger banks. This has been done in favor to receive better technology and customer adaptation services. With the passage of Covid-19 situation, banks are sure to adapt new technologies and focus majorly on renewing of 4 major areas of banking such as:
- Opening hands for neo-technology to reduce costing and speed-up transactions,
- Adapting to channels of digitization to cause a shift in customer priority from visiting nearby branch to use of digital channel that helps the users to interact over multi-automated digital channels,
- Customer’s security, trust and privacy are the priority of banks. It has been reported in 2018 that near about $13.7 million has been pegged as loss due to cyber-crime. During this phase of cashless and digital economy banks needed to implement secured frameworks for transactions that is far away from financial fraud, data loss, money laundering, identify theft and privacy breaches. This is only possible with the strengthening of KYC, SCA (strong customer authentication), APIs, smart networking, Firewalls, etc. that is sure to foster secure and seamless transaction. To have robust banking solution, it is required to avail a cyber-security service that helps to safeguard malicious deed.
- Policies and compliance's should be more inclined toward increment in the use of digital payment infrastructure. From the security point of view, introduction of personal data protection bill (PDP) is of importance as it helps in the protection against personal information of consumers and implementation of penalties on erring entities upon violation of bills.
- Digital media -
With the introduction to new life caused due to Covid-19, a new trend has been observed in the world digital media consumption. Consumers sitting without work at home have to face the changed lifestyle such as social distancing, work from home, closed school, cancelled travel and event has lead disrupt daily activities. This has finally resulted into significant change on media and advertisement industry across the world. In few cases rapid hike has been observed in the consumption of sites offering news, business/financial, government aided, online games, healthcare and healthcare retail. Whereas, few sites are witnessing decrease in the information consumption such as sports, airlines, travel, hotel and car transportation.
It has been proved that profit margin of online businesses is growing on yearly basis by 19% whereas the profit of offline businesses is increasing by 10% yearly according to a research conducted by KPMG. It clearly indicates that digital transformation acts as an incentive for SMEs in terms of the revenue.
