How to Transform SMEs into Digitally Empowered Businesses?
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Had commanding Alexa to make calls or book flight tickets been an option a few years back? Certainly not. With the technology taking a front seat into our lives making it easier to fill the gap between thoughts and implementation of ideas into reality, its adoption by businesses for smooth functioning has become a necessity.
Our forefathers never knew what computers could have done for their work efficiency but we do. While recording data on excel sheets might not be anything unusual for us today, it was an unheard activity before the 2000s. Some traditional businesses are still stuck in that era and hence, are fighting for survival.
In order to scale operations and maintain a transparent work culture, it is vital for organizations to adopt technology. The emergence of artificial intelligence, blockchain, internet of things and more has been leading the startup culture. Usage of emerging tech could become game-changer for Small and Micro Enterprises (SMEs) too.
Government has played a significant role in the transformational shift of Indian SMEs into digitally-empowered enterprises. Jandhan Yojana led Banking penetration, Aadhar stack, UPI, GST and E-commerce boom have been the key factors for these seismic positive changes, provides Manish Lunia, Co-founder, Flexiloans.com.
“Today, SMEs can get good visibility for themselves by a) Transacting digitally via bank accounts, POS machines etc. b) Filing returns on time c) Registering the business online and building digital profile and d) Building credit scores by using credit facilities and maintaining good payment track record,” he further shared, adding that these will also make an SME a funding-worthy unit for Banking institutions.
Video KYC – The New Mantra
The lack of technical know-how has left MSMEs vulnerable to digital frauds. The misuse of biometric data and the limitations of low-cost KYC equipment have made the process of identity verification difficult for these enterprises. In a bid to dish out the probability of such frauds, the expert committee on MSMEs has suggested an alternative to the existing electronic KYC (e-KYC) methods.
The committee has recommended a nine-step “video KYC (know-your-customer)” process which would require the MSME customers to sign up on the entity’s mobile app or website, schedule an appointment, share an identity proof, based on which the app would offer the available date and time for verification. The customer can also pay a physical visit if not comfortable with the digital process.
Raising Funds – An Issue
To sustain in the present competitive marketplace and to compete with big businesses, SMEs need to have an effective marketing presence, which can help them stand out and make a brand of themselves but SMEs lack access to technology due to financial constraints and their risk-averse nature which reduces their chances of catching a consumer's interest without proper advertising, shares Pravin Daryani, Chairman and Managing Director of A&A Business Consulting Pvt Ltd.
Being unprepared to leverage digital platforms, SMEs face serious issues while raising funds. All investors today want to fund companies that tech-driven. “We see a serious disconnect there (in thought implementation). What is planned and what it turns out to be in reality differs which also eventually changes the mindset of the investors,” shares Vidushi Daga, Founder & Director of Clone Futura.