Adopting Digital Practices: How SMEs can succeed by taking their businesses online in post-COVID world
SMEs have remained a critical part of India’s growth engine and their role will be extremely crucial in the post-COVID-world. However, the bigger question now is: how will they survive the pandemic?
Challenges faced by SMEs
The vibrant sector that employs 40% of the country’s workforce and contributes 30% to its GDP is one of the biggest victims of the viral outbreak. Companies under this segment are significantly facing a slowdown in their operations mainly in the form of low liquidity and lack of workforce. To ensure sustainability, unfortunately, many players have strictly started taking survival measures like layoffs and salary deductions.
To help SME players sustain their businesses during this hour of crisis, the government has come forward with some much-needed measures. For instance, Long Term Repo Operations (LTRO) worth Rs 100,000 crore rolled out by the Reserve Bank of India has enabled banks to increase their lending to SMEs at cheaper rates.
Along similar lines, the incumbent government has also come out with an economic package of Rs 1.70 lakh crore under the Pradhan Mantri Garib Kalyan Yojana. This aims to help migrant workers and those below the poverty line by providing them with free foodgrain and cooking gas for the next three months.
The government has also extended the income tax return filing date for FY 2018-19 to June 30, 2020, from March 31, 2020. Moreover, it has even extended the deadline for GST returns filing for March, April, and May to June 30, 2020.
However, the SME segment calls for more concrete initiatives; perhaps a digital push to revive from the current crisis and become future-ready at all times.
The need for a digital push
By taking their businesses online, SMEs can add efficiency, innovation, and accuracy to their existing operations and eventually reduce the turnaround time of their servicing process. However, due to factors like lack of awareness, skilled labor, financial assistance, and low IT infrastructure, among others, a large number of businesses in this segment are unable to tap the maximum potential of digital solutions. Currently, 68% of SMEs in India still operate offline with no digital presence while completely relying on traditional methods.
Digital SMEs, on the other hand, are successfully taking their businesses to new heights with increasing revenues and profits. By investing in digital practices, be it customer relationship management (CRM), selling on e-commerce platforms, or online payments, small players can ramp up productivity levels, add agility, and even enter new markets. For instance, by using CRM tools, companies can streamline tasks and prioritize them as per their deadlines. This results in efficient task allotment as well as ensures timely completion, eventually simplifying and augmenting the company’s overall way of doing business.
Given the uncertainty in the current scenario, the right adoption of technologies and investment in digital tools will help companies better connect with and service their customers at every step of their operations, without any hassles. For instance, they can start by building a user-friendly website to mark their online presence. Through this, they can showcase their products and service customers online while ensuring compliance with social distancing.
Similarly, they should also consider cloud accounting software or SaaS. Since this software is hosted by a service provider, it eliminates the problem of installation and maintenance. By leveraging this tool, companies can communicate, delegate, and monitor key tasks while they are working from home. Moreover, the software can enable companies to view and maintain sensible data in real-time while ensuring that it is only accessed by authorized people. It can, therefore, be a great solution for SMEs to keep their accounting and compliance-related matters updated without any physical intervention.
Not only will these solutions help companies sail through the economic storm engendered by COVID-19, but will also keep them prepared to face more such outcomes, if any, in the future.
As more and more players acclimatize to the new world order and move towards a digital economy, they will learn to embrace the ability of connected ecosystems and add value to their business operations. This transition will, however, be an uphill task for many, but those who will quickly adapt to it will certainly shine in the days to come. After all, innovators always lead the change, irrespective of its nature!
This article is written by Sandip Chhettri, COO, TradeIndia.