Increasing trend of digitalization aiding SMEs businesses

Digitalization has positively impacted the various aspects of businesses and benefitted organizations with increased efficiency, improved customer satisfaction, more profits, more employee satisfaction, and enhanced cyber security.

The crucial role of digitalization in driving business growth is evident from the insights gathered through a survey of SMEs by Capterra India. The majority of respondents emphasized the utmost importance of digitalization, highlighting its transformative impact on their businesses.

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With the success of e-commerce enterprises in India, it has been proven that digital presence is now a necessity. Demonetization in November 2016 had been a turning point for digital payments. Later, the Covid-19 pandemic further accelerated the process of digitalization in the country. The need to adopt digital solutions to sustain business was realized by organizations irrespective of their size.

Digitalization refers to the use of digital technologies to change a business model. It involves leveraging digital tools, technologies, and data to streamline processes, improve decision-making, and create new business opportunities. Digitalization leads to new revenue and value-producing opportunities. 

Technologies such as blockchain, IoT (Internet of Things), 5G, cloud computing, AI (Artificial Intelligence) and Data Science are transforming the world economy. By leveraging these advanced technologies, organizations can streamline operations, improve decision-making, increase productivity, and better connect with their customers. 

‘Digitalization of Indian SMEs’ 

Capterra India, the world’s leading software reviews and selection platform has recently released a report on its “Digitalization of Indian SMEs survey”. The report highlights the ongoing transformation in the SME sector in the country. The process of transformation is being driven by the enormous influence of technology, the shifting landscape of the new digital economy, and the growing influence of SaaS (Software as a Service) on businesses.  

The survey had collected and analyzed responses from about 435 participants. In the survey, it was found that 88% of the respondents already have a digitalization strategy indicating that there is a growing awareness of the significance of digitalization in business. Indian SMEs recognize the importance of adopting and embedding digital technologies to remain competitive, be more efficient, and meet the growing demands/preferences of customers. 

About 82% of SMEs in the survey also informed that digitalization is very important/critical for the growth of their business. Digitalization was ‘moderately important’, for 17% of the respondents. Whereas for 1% of respondents, it was ‘minimally important’. 

Most of the respondents were reported to have an operational digitalization plan. Having an operational digitalization plan suggests that they are actively implementing digital solutions and initiatives, as part of their comprehensive business strategy. The rising adoption of digitalization strategies by Indian businesses indicates a positive trend. 

The report highlights the significance of digitalization in improving customer service. The Chatbot is cited as an example of how businesses are leveraging AI-driven tools to effectively cater to the mounting customer queries. Chatbots enhance the customer service experience in aggregate, as they provide automated and instant responses to customer queries.

The AI tools facilitate a ‘sophisticated and contextually’ relevant interaction with customers through chat windows. This form of interaction transcends traditional customer service methods. 

The key benefits accruing from the digitalization processes, as reported by respondents include increased efficiency, improved customer satisfaction, more profits, more employee satisfaction, and enhanced cyber security.

About 42% of respondents in the survey said that digitalization has resulted in raising operational efficiency. Digitalization has enabled businesses to streamline processes and reduce manual intervention. Improved productivity and resource optimization are the resulting benefits, being enjoyed by companies.

By providing more efficient and personalized services businesses are able to effectively cater to customer needs which further strengthens their relationship with customers. Around 41% of the respondents are reported to have related digitalization to improved customer satisfaction.

Improved operational efficiency, enhanced customer experiences, and access to data-driven insights may collectively contribute to increased revenue generation and profitability. Nearly 34% of the respondents in the survey report are said to have registered higher profits as a result of digitalization.

By automating repetitive tasks and providing employees with modern digital tools, organizations are able to provide a more engaging, rewarding and satisfying work environment. In the survey, around 33% of the respondents acknowledged that digitalization has resulted in greater employee satisfaction.

Digitalization has also enhanced cyber security. As reported by 32% of the participants in the survey, by adopting secure digital technologies and best practices businesses are well placed to curb potential cyber threats and safeguard sensitive data effectively.

Digitalization, a helping hand to growing businesses 

Businesses in India have realized the need and urgency to digitalize their business models. They are instilling digitalization not only as a response to changing customer expectations and demands but also as a strategic approach to remain competitive and resilient in the technology-driven business environment. 

The digitalization process is likely to advance by leaps and bounds as technology advancements continue to progress, which will enable organizations to adapt to the changing consumer preferences, improve efficiency, augment customer experiences, and stay competitive in the highly competitive technology-driven market.