Overcoming the digital adoption challenge for MSMEs

Micro, Small, and Medium Enterprises are the backbone of the Indian economy. With a 63 million strong base, these enterprises are accounting for nearly 45% of the country’s exports and contributing to around 30% of the GDP. They are also credited for generating over 80% of the jobs in the country.On the other end of the spectrum, MSMEs are performing sluggishly when it comes to digital adoption, particularly in the production and supply chain space.On the broad spectrum, MSMEs are not averse to digital transformation. The adoption of digital systems for surveillance, security, attendance, accounting, web presence, virtual meetings, etc., makes this clear. Same is the case in production wherein they have embraced PLC, SCADA, and other digital control systems.

The major challenges faced by MSMEs while going digital are:

1)  The Dependency Challenge : Digital transformation components,are emerging, non-standardized, and enigmatic. This means that the MSMEs cannot pick and choose the best of available components. Also, scalability is a challenge. The same goes with Data and Security Management.

2) The Cost Factor : Unlike large organizations, who can afford to fail on some initiatives, pick up the threads, and run further programs, MSMEs are walking a tight rope. They cannot take the risk of going big on digital transformation and cope with failures.

3) Entry Barriers : The biggest entry-level barriers that are affecting MSME digital adoption are as                                        follows:

• Absence of a standardized framework that can guide the MSMEs through their digital journey.
• Lack of access to specialized partners who can help MSMEs to stay tuned with the latest digital framework.

Conclusion : Digital transformation is inevitable. It appears that it is in the phase of eCommerce excitement of 2000. It will not become a fabric in the industry overnight, but it will become in time. The benefits will be seen when the ecosystem matures to a point that flow of data becomes seamless and mandatory across the supply chain.

Digital transformation is a key component to drive the holistic growth of MSMEs and enable them to compete with the world by churning out better quality products efficiently. The transformation would be critical for our quest to become a $5 trillion economy, achieve the ambitious target of 25% manufacturing growth, and meet the job creation demand of an ever growing workforce.

Source : https://timesofindia.indiatimes.com/blogs/voices/overcoming-the-digital-adoption-challenge-for-msmes/