Digital transformation is not just using apps or social media, it has to be aligned to the business goals and business processes.
The SHEER NUMBER of digital technologies and the benefits derived by some of the trailblazing businesses by adopting these have prompted a number of companies to augment their operations or rethink their methods of functioning and embark on the digital transformation journey. However, so far, most of the success stories in India have been related to large companies or businesses born on the internet. The unprecedented changes that have taken place in the wake of Covid-19 are throwing up compelling reasons and opportunities for MSME segment to also rethink their customer requirements and their business models.
Digital transformation is not just using apps or social media, it has to be aligned to the business goals and business processes with clearly defined metrics to justify the efforts and the investment. There are four clear reasons for MSME segment to embrace digital transformation which are crucial specially in the context of Covid 19 and the resultant business climate. The first area of focus would be to identify new customers as existing customers may be cash-strapped, may have reduced demand or may have simply perished on account of Covid crisis.
Now the net has to be cast wide and this has to be done smartly with speed in order to ensure the revival of the business. Strategic digital support would enable the companies to help generate new leads and also customise the solutions based on the new demands that bubble up.
Second, adopting the digital journey can ensure that existing customers are serviced effectively, thus leading to farming of new opportunities. Several customers are seeking discounts and are renegotiating contracts due to constraints faced and will have to choose whom to work with in the demand challenged situation.
Businesses that can continue to retain the attention of the customers and use digital means to service them – via frequent communications, sharing analysis of the outcomes from previous engagements and providing proactive examples of how they could go the extra mile to service them using digital channels without enhanced costs would have a headstart in the next phase of business.
Third, streamlining the supply chain. Almost all industries are facing challenges due to broken supply chains and the bottlenecks thereof at multiple stages.
Suppliers would continue to face these challenges for quite sometime—even after the current restrictions are relaxed and in future customers would lay significant emphasis on having alternatives and ensuring business continuity plan is finetuned to deal with extreme situations.
The fourth reason is to manage its people and their motivation. Virtual offices and remote working are here to stay. This is the right time to create digital frameworks to foster higher levels of employee engagement through collaboration, upskilling and building a bridge between the roles and the new competencies required, thus establishing new benchmarks in productivity.
In order to seize the opportunity to remodel their businesses, the construct for the next incarnation of MSMEs should comprise levers for one or more trajectories of digital transformation as outlined. While the immediate need is to steady the ship and ensure it is able to sail in troubled seas, in the next phase of India growth story, amongst the MSME businesses, there are opportunities for some to move into the big boys’ club based on how well they are able to acquire the right ammunition and firepower to take on the rough seas ahead. Digital transformation could be that ammunition!
Originally appeared in Financial Express