3 MinsMar 15, 2023
The small, micro and medium-sized enterprise (MSME) sector in India is an important contributor to the overall growth of the economy. Digital transformation has touched almost every sector in India and the MSME sector is no different. In this
blog, we outline five areas where MSMEs can drive digital transformation, including digital MSME loans and other relevant products, to trigger growth.
This digital transformation guide outlines how small, micro and medium-sized businesses can leverage smart products such as Axis Bank Business Loan in a hassle-free
manner. This collateral-free loan can range between ₹50,000 and ₹75 lakh. Use it to give your business the much-needed boost.
Importance of Digitisation
The MSME sector faces various unique challenges and needs, making it one of the most under-served sectors. MSMEs have struggled to access key services such as credit, professional banking services, and marketing and communication tools that are
affordable and relevant to their needs. This is where digitisation is helping to bridge the gaps.
5 key areas for digitisation of MSMEs
By making early investments in digitisation, MSMEs can solve various challenges, scale their businesses, and increase profitability. Here are five key areas to focus on:
(1) Financial Transformation
A company’s fiscal health plays an important role in the overall sustainability of the business. Traditionally, MSMEs have faced many challenges in accessing business loans and current accounts with forex capabilities. However, contemporary banks offer digitised products, services and tools with a quicker turnaround time, real-time applicability, and tailor-made solutions for MSMEs. Businesses
can leverage the benefits of digitised banking services to meet all their real-time needs.
[Also Read: Complete guide to opening a Current Account]
(2) Marketing and Advertising
Traditionally, marketing has been an unaffordable function for MSMEs. However, today, they can leverage several digital tools that enhance marketing capabilities. These include platforms such as social media, messaging apps and video conferencing
tools to market products and services. Several applications are also available to automate all activities, thus reducing labour costs. They can also leverage data to enhance marketing decision-making.
(3) Efficient Operation
Continuing to run operations through manual processes results in errors, duplication and inefficiency. MSMEs can make early investments in digital tools that enhance efficiency. Supply chain management tracker platforms, customer relationship
management software, communication tools, and digital publishing suites are examples of such tools. Companies can shape their tech stack based on key functions and business goals. Proper integration will ensure that all software speaks to
each other, seamlessly.
(4) Data Security
With so much sensitive data being stored on the cloud, MSMEs must invest in building their cyber security capabilities. They can invest in several digital tools to completely outsource this function to a credible third party. The cost of not doing
so can have an adverse impact in the form of compromised data, financial losses and reduced customer trust.
(5) Customer Engagement and Interaction
As MSMEs scale their businesses, it becomes challenging to engage customers through human contact. Adopting tech-enabled solutions comes in handy. These include chatbots, contact forms, email marketing and social media customer service tools.
Such tools enable businesses to respond in real time and be accessible to customers 24x7. They can be leveraged to build a proactive customer engagement strategy.
With the help of digitisation, MSMEs can expand their businesses multifold. Technology can help not just those businesses operating in the new-age or tech-enabled sectors, but even those operating in traditional sectors to take their business
to the next level. For instance, MSMEs can leverage digital technology to expand operations, upgrade the technology stack, stock inventory for seasonal demands, or to meet the business's cash flow needs.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.