Digital transformation for MSMEs has largely been viewed as a customer acquisition tool.
How AI adoption can help MSMEs close the digital transformation gap
Accounting for 70 per cent of all employment, 99 per cent of companies, and nearly 50 per cent of global GDP, MSMEs are a key economic artery for almost every nation on the planet. However, the small size and limited resources of most MSMEs have traditionally made it difficult for them to access enterprise technology and implement digital transformation at scale. In fact, less than 20 per cent of MSME digital transformation initiatives are successful. But all that is quickly changing.
In the past, digital transformation for MSMEs has largely been viewed as a customer acquisition tool that helped them scale faster and access new markets. But now the rapid acceleration towards digital during the pandemic has helped even the smallest retailers transform their businesses. They can access analytics dashboards for critical insights into customer behaviour, inventory management, supply chain metrics, and more, via new offerings in AI and predictive algorithms by digital service aggregators. The real-time insights they offer have allowed MSMEs to deliver increased personalization and tailor their portfolios to the needs of the quickly evolving consumer. Lest they be left out, IT vendors are also showing renewed interest in the MSME market, launching low-cost service and product tiers tailored to the needs of emerging businesses.
Source: Uniserve IT Solutions
MSMEs now have on-demand access to business software without the expensive licensing costs. Launching a new customer acquisition channel, integrating a digital payment gateway, implementing a fraud detection system, or adopting a CRM(Customer Relationship Management) has become a matter of a few clicks and a relatively minimal monthly investment.
The result? Small businesses can now unlock new operational efficiencies, evolve new stakeholder experiences, and accelerate go-to-market cycles. AI and data science tools have been exceptionally useful in enabling firms to quickly derive insights from previously cluttered and unstructured customer data pools. Unshackled by legacy systems and business rules, technologically savvy MSMEs are increasingly being viewed as innovation pioneers, pushing the experimental edge ahead of larger enterprises.
The future of AI adoption across MSMEs
From sentiment analysis, customer onboarding, and smarter chatbots to automated cybersecurity, content management, and credit and risk assessments – the number of use cases for AI in MSMEs is growing. Across industries ranging from retail and banking to healthcare and insurance and AI technologies are rapidly driving up efficiency, productivity, and customer satisfaction. In FinTech, for example, AI and alternative data are being used to create new credit models and deliver personalized financial products. MSMEs that have a clear AI and data science strategy are likely to thrive and drive better outcomes with their innovation initiatives.
With AI becoming all-pervasive in the rapidly growing and competitive MSME market, the future of AI adoption seems promising. MSMEs will have to think deeper about what AI can offer them and their customers in a saturated world. The real differentiator will be in making AI human-centric in design across touchpoints. Factoring in explainability and bias will help MSMEs build hyper-personalized offerings and gain the trust of the customer, now and in the future.
Source: An article by Soumendra Mohanty from Financial Express